Krabbenhoft v. Commissioner
United States Tax Court
Ps sold land to their sons on June 29, 1981, pursuant to an installment sale agreement, with interest on the remaining balance to be paid at the interest rate set by sec. 1.483-1(d)(1)(ii)(B), Income Tax Regs. R used a higher market interest rate to discount the installment payments in determining the value of the gift on the sale. Held, R used the proper interest rate to discount the installment payments as sec. 483 does not apply to gift tax valuation.
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Ps sold land to their sons on June 29, 1981, pursuant to an installment sale agreement, with interest on the remaining balance to be paid at the interest rate set by sec. 1.483-1(d)(1)(ii)(B), Income Tax Regs. R used a higher market interest rate to discount the installment payments in determining the value of the gift on the sale. Held, R used the proper interest rate to discount the installment payments as sec. 483 does not apply to gift tax valuation. Ballard v. Commissioner, 854 F.2d 185 (7th Cir. 1988), revg. T.C. Memo. 1987-128, not followed on this issue.
1Opinion of the Court
OPINION
CLAPP, Judge:
Respondent determined a $26,444 deficiency in petitioners’ Federal gift tax for the calendar quarter ending June 30, 1981. Following concessions, the issues Eire (1) whether petitioners’ sale of land to a family member at the interest rate set by section 1.483-l(d)(l)(ii)(B), Income Tax Regs., prevents respondent from using a higher market interest rate for gift tax purposes, and (2) if not, whether respondent correctly determined the amount of the gift. All section references are to the Internal Revenue Code of 1954 for the quarter in issue. All Rule references are to the…
2Cases cited5 opinions
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Eleanor M. Ballard v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1988
- Blackburn v. CommissionerUnited States Tax Court · 1953
- Cohen v. CommissionerUnited States Tax Court · 1989
- Ballard v. CommissionerUnited States Tax Court · 1987
3Cited by8 opinions
- Frazee v. CommissionerUnited States Tax Court · 1992
- Charles Schusterman and Lynn N. Schusterman v. United StatesCourt of Appeals for the Tenth Circuit · 1995
- Lester H. Krabbenhoft Anna Krabbenhoft v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1991
- Frazee v. CommissionerUnited States Tax Court · 1992
- Krabbenhoft v. CommissionerUnited States Tax Court · 1990
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