Frane v. Commissioner

JOHN R. GIBSON, Circuit Judge.

In this case we examine the income tax consequences of an estate planning device known as the “death-terminating installment note.”1 Janet Frane and the estate of Robert Frane, her late husband, appeal from a Tax Court decision holding that they were required to report income resulting from the cancellation of notes from the Franes’ children upon Robert Frane’s death. On appeal the Franes argue that no one should have to recognize income from the cancellation of the notes or, in the alternative, that if anyone does, it should be the estate and not Mr. Frane…