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Interest-Free Demand Loans Now Subject To Gift Tax - Dickman V. Commissioner, William T. Sharpe

Campbell Law Review

One day, Mr. Jones walks into your office and tells you that he wants to help junior start his own business, but he does not want to incur any gift tax. "No problem," you say, and you proceed to tell him about the advantages of an interest-free demand loan to junior. You tell him that based on Johnson v. United States and Crown v. Commissioner, an interest-free demand loan will not result in a taxable gift. So junior can get the money to start his new business, Mr. Jones can transfer some of his wealth without adverse gift tax …