CCA 201330033: IRS Redetermines Value of Self-Canceling Installment Notes Issued to Decedent in Exchange For Property Transferred to Grantor Trusts

A "self-canceling installment note" -- or SCIN -- is an installment obligation issued in exchange for property that is cancelable upon the occurrence of some future event, usually the death of the holder. If, however, the value of the SCIN issued in ex- change for the property is not subst...

Full description

Saved in:
Bibliographic Details
Published in:Tax Management Estates, Gifts and Trusts Journal Gifts and Trusts Journal, 2013-11, Vol.38 (6), p.337
Main Author: Beers, Deborah M
Format: Article
Language:English
Subjects:
Estate planning
Fair market value
Fair value
Gift taxes
Grantor retained annuity trusts
Grantor trusts
Income taxes
Installment sales
Interest rates
Life expectancy
Mortality
Promissory notes
Property transfers
Risk premiums
Tax courts
Tax returns
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:A "self-canceling installment note" -- or SCIN -- is an installment obligation issued in exchange for property that is cancelable upon the occurrence of some future event, usually the death of the holder. If, however, the value of the SCIN issued in ex- change for the property is not substantially equal to the value of the property, a gift may arise. In recent CCA 201330033, the IRS Chief Counsel's Office indicated that it found the "willing buyer/willing seller" test of Regs. §25.2512-8 to be the appropriate measure of value, at least in situations where the taxpayer's health may be at issue. The Chief Counsel's Office found that Decedent should have paid gift (but not estate) tax on the difference between the value of the SCINs and the (higher) value of the property for which they were issued.
ISSN:0886-3547
1543-9852