installment note


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installment note

A promissory note requiring payments over some period of time. Contrast with a single-pay loan,in which all principal and interest are due at maturity.

References in periodicals archive ?
Mobiquity Technologies agrees to assume a USD 7.5m installment note between the former owners of Advangelists and GEA.
Examples of such options include (a) use of funds not from the proceeds of the sale to redeem such partners' interests, including funds, raised from new investors; (b) use of proceeds from the sale to redeem the interests of liquidating partners resulting in the partnership performing a partial, as opposed to full, exchange; (c) using a partnership installment note to pay liquidating investors what is due to them; and (d) performing a partial drop down to liquidating investors of their interests in the property.
The grantor will then sell certain high value, appreciating assets to the IDGT in exchange for cash and an installment note. This transaction must be structured to be defensible as a legally valid sale.
Two years later, the practice was not doing well and the remaining doctor defaulted on the installment note. The retired doctor brought a claim against the CPA asserting he had provided inadequate advice regarding the drawbacks of an installment sale.
A self-cancelling installment note (SCIN) should also be avoided until future guidance is clarified.
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.
Subsequently, the trust buys the business from the parent for an interest-bearing installment note. Our historically low interest rates make it easier for the trust to have enough income from the business to pay the notes.
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.
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.
An immediate issue arises if AS estate receives cash (e.g., the sales proceeds traceable to the life insurance proceeds) and B receives an installment note. Regardless of whether the transaction is an asset purchase followed by an actual dissolution or a stock purchase followed by a deemed dissolution, the stockholders receive different consideration, which might violate the subchapter S single class of stock requirement.
A self-cancelling installment note (SCIN) is an excellent way to structure intra-family transfers, as nothing is included in the estate of the seller (typically the senior generation) since the obligation is cancelled at death.