Should the estate planning tool used by Detroit Pistons owner, Bill Davidson, to transfer property to his grandchildren be classified as an annuity or debt? According to law professor Jerome M. Hesch, the self-cancelling installment notes (SCINs) that Davidson used to transfer shares of a company he owned into trusts that would benefit his grandchildren are to be classified are not annuities. Instead, these SCINs should be classified as installment debt instruments under Internal Revenue Service (IRS) regulations.
See Daily Tax Report, Estate-Planning Tool Used by NBA Owner Likely Taxable Gift, Not Annuity, July 7, 2015.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
