Dec 19
posted by Carl L. Jones in
Gift Tax, Estate Planning
| 0 Comments
There are two main considerations when deciding when to make a gift of property. The first is estate tax, and the second is property basis.
Mar 8
posted by Carl L. Jones in
Gift Tax, Estate Planning
| 0 Comments
A self-canceling installment note (SCIN) is a note that includes a clause that cancels the remaining balance upon the death of the original holder. There are advantages for both the seller and the buyer of a SCIN. The seller is able to freeze the value of the sold property at the face value of the note and may be able to avoid the inclusion of the note in his gross estate. The seller can also spread the payment of taxes on gain on appreciated property over the life of the note.
Nov 27
posted by Carl L. Jones in
Estate Planning
| 0 Comments
Unfortunately, the answer is no. Notes that are canceled by a decedent's will are to be included in the decedent's gross estate. (Estate of Buckwalter v. C. I. R. (T.C. 1966) 46 T.C. 805.) In Buckwalter, the decedent's son was indebted to a bank. The decedent proposed a deal whereby he would pay off this debt. The son would then make the monthly payment he would have otherwise made to the bank to the decedent, but at a lower interest rate. The agreement was outlined in two separate letters (agreement letters). However, the agreement was to be kept a secret as to avoid paying personal property taxes each year. The decedent indicated that the loan would be totally forgiven should the decedent die before the loan was paid in full.
