Estate of Frane v. Commissioner
United States Tax Court
In 1982, D sold to his four children equal amounts of common stock in his wholly owned corporation, S. The purchase agreement stated that the purchase price for the S stock was equal to the stock's fair market value, which was determined by appraisal to equal $ 141,050 for each block of stock sold.
Read the full summary
In 1982, D sold to his four children equal amounts of common stock in his wholly owned corporation, S. The purchase agreement stated that the purchase price for the S stock was equal to the stock's fair market value, which was determined by appraisal to equal $ 141,050 for each block of stock sold. Pursuant to the purchase agreement, D and each of his children executed a promissory note in the principal amount of $ 141,050, payable in 20 annual installments, with interest payable annually at a rate of 12 percent on any unpaid principal. Each promissory note contained a provision that unless…
1DissentHalpern, J.
Apparently sensing some abuse that it must address (but does not identify), the majority concludes that an obligation that never came into being was somehow canceled. That conclusion is based on an interpretation of the word “canceled” that comports neither with common usage nor with the intent of Congress. Therefore, I dissent.
As the majority has stated, the type of transaction under consideration is commonly referred to as either a “death-terminating installment sale” or “self-canceling installment note” (SCIN). For convenience only, I will hereinafter identify the transaction by the…
2Cases cited16 opinions
- Bruning v. United StatesSupreme Court of the United States · 1964
- Lucas v. CommissionerUnited States Tax Court · 1972
- Graf v. CommissionerUnited States Tax Court · 1983
- Denver & Rio Grande Western Railroad v. United StatesUnited States Court of Claims · 1974
- Peterson Machine Tool, Inc. v. CommissionerUnited States Tax Court · 1982
11 more not listed; retrieve them via the Exa API.