In addition, unless the note arose from a sale that occurred within 12 months of formally adopting a liquidation plan (and only if the corporation is actually liquidated in that 12-month period), the shareholder receiving the installment note
is taxed on its full fair market value (FMV) in the year the note is distributed.
Early payoff of the note: The buyer of your property may decide to pay off the installment note
early or sell the property, in which case your installment plan would be defeated and the balance of the taxable portion would be taxable in the year the note is paid off early or the property is sold, unless the new buyer assumes the note.
Since Bill had not prepared an exit plan, and his son had no funds with which to purchase his ownership interest (which is usually the case), a long-term installment note
seemed to be the only answer.
An installment sale of property involves a cash down payment and an installment note
issued for the balance of the purchase price.
The use of succession planning tools such as grantor retained annuity trust, a sale to an intentionally defective grantor trust or sale in exchange for a self-canceling installment note
may also be effective in reducing the value of the business for estate tax or gift tax purposes.
Deferred income on most installment sales made after 1987 can be accelerated by pledging the installment note
for a loan.
the sales proceeds traceable to the life insurance proceeds) and B receives an installment note
For estate tax purposes, under Alter native 1, the FMV of the installment note
receivable would be an asset of the decedent's gross estate.
First: The client, after owning the land in a partnership for more than one year, sells the land to a controlled subchapter S corp in exchange for an installment note
An asset valued at $1,000,000 that is sold in August 2003, for a 20-year balloon installment note
, will require a minimum interest rate of 4.
The trust issues a deferred payment obligation, such as an installment note
or private annuity with a value equal to the assets received for tax purposes.
TRS will use a portion of the net proceeds of the offering to repay a portion of the indebtedness outstanding under its credit facility, repay a portion of an installment note
due December 31, 2009 and make a distribution, in one or more dividend transactions, to Rayonier.