Estate of Duilio Costanza - Page 7

                                        - 7 -                                         
          is not a bona fide sale and because full and adequate                       
          consideration was not received”.  Through an amendment to answer,           
          respondent asserted that the sale transaction, if valid, was a              
          bargain sale and that decedent's adjusted taxable gifts should be           
          increased under section 2001(b)(1)(B) by the amount of the                  
          bargain component.                                                          
               Section 2512(b) provides that where property is transferred            
          for less than an adequate or full consideration in money or                 
          money’s worth, then the amount by which the value of the property           
          exceeds the value of the consideration shall be deemed a gift and           
          shall be included in computing the amount of gifts made during              
          the calendar year.  Section 2001(b) provides that the value of a            
          decedent’s lifetime adjusted taxable gifts (other than gifts                
          includible in the gross estate of the decedent) shall enter into            
          the computation of the Federal estate tax.                                  
               We must decide whether decedent’s gross estate, or                     
          adjustable taxable gifts, includes any or all of the value of the           
          Latina restaurant and Bristol West retail/office properties that            
          were conveyed by decedent’s trust in exchange for the SCIN.  A              
          SCIN is a debt obligation that by its terms is extinguished at              
          the death of the seller-creditor, with the remaining note balance           
          canceled automatically.  The asserted advantage of a SCIN over an           
          ordinary installment sale is that if the seller dies before the             

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011