Law Commons^™

Got Premium? Costanza V. C.I.R. And The Tax Treatment Of Intrafamily Scins Cancelled By Death, Gadi Zohar

Gadi Zohar

In 2003, the Sixth Circuit Court of Appeals overturned a Tax Court determination that the self-canceling installment note (SCIN) created by Duilio Costanza and his son, Michael, was a gift because it lacked the features of an arms-length transaction. It is the author's assertion that 1) the Sixth Circuit Court of Appeals overstepped its standard of review, and 2) both courts were lacking in an analysis of the most important evidence of a bona fide transaction: the consideration. Consideration for the transaction should have included a premium accounting for the risk that Duilio would die before the term of the …