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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.
OPINION
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
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Last modified: May 25, 2011