Despite prior ruling, Service states that loan guarantee was not taxable gift

Article Abstract:

The IRS implies in a 1991 letter that loan guarantees do not result in disallowance of the marital deduction and that such guarantees might no longer be treated as taxable gifts. This would contradict Letter Ruling 9113009. It must be noted, however, that the factual circumstances in the two cases were different. In the case of the letter ruling, a parent guaranteed a loan made to his children. In the case of the 1991 letter, a commercial loan to his own business was guaranteed by a business owner.

Loans, Suretyship and guaranty, Guarantees, Sureties

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Settlement in estate dispute held not to be taxable income

Article Abstract:

The settlement proceeds in the Vincent case represented payment for any interest in the real estate the petitioner may have received from its gratuitous transfer by his father in accordance with a 1978 deed. The settlement was thus made in lieu of a gift by the petitioner's father and was excludable from income under IRC 102(a). The test the court used for deciding how a settlement payment should be taxed was to ask what the settlement was made in lieu of.

Tax exclusion

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Premium kickback from insurance agents creates taxable income

Article Abstract:

The Tax Court ruled in Wentz that the amount of insurance premiums rebated to the purchaser of a policy by the insurance agent that sold the policy were includable in taxable income. The rebate was given as an incentive to buy the policy, but the agent had no authority to change policy pricing, forcing the court to treat the rebate as a kickback.

United States, Cases, Life insurance, Insurance agents, Rebates

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