A disguised sale is the IRS’s way of saying, “You didn’t really contribute that asset, you sold it and owe tax on the gain.” Its purpose is to stop partners from hiding a taxable sale inside what appears to be a tax‑free contribution.
Craft steers clear of that label with two guardrails:
Five‑year lock‑up. You can’t pull cash or securities out for five years, so any payout lands well beyond the IRS’s two‑year safe‑harbor.
Real business risk. Your return rises or falls with the Pod’s actual profits. There are no guaranteed pay‑backs tied to what you put in.
Because both timing and risk are genuine, the IRS treats your contribution as an investment, not a sale.