This article is Part 3 of a 4-part series exploring various tax issues related to disregarded and regarded intra-family installment sale transactions for estate and income tax planning. Part 1 focused on loans and debt transactions between trusts and their beneficiaries. Part 2 reviewed the income tax rules associated with reportable installment sale transactions under IRC Section 453, including dispositions of reportable installment obligations during life and the rules under Section 691 governing dispositions of reportable installment obligations as a result of death. Part 3 reviews post-mortem tax considerations involving loans between a grantor and their grantor trust that remain outstanding at the time of the grantor’s death when the grantor trust converts to a non-grantor trust.
Please click here to read Part 3.
Please click here to review Part 2.
Please click here to review Part 1.