Self-Cancelling Installment Notes
A Self-Cancelling Installment Note (SCIN) is an installment sale where the buyer, usually a family member buys business interests, real estate, stocks, or other assets in installments rather than paying in full. With an installment sale you can partially delay capital gains until later taxation years. You should consult with The Law Offices of Deborah Azar, P.C. to see if a Self-Cancelling Installment Note is right for you.
When you use a Self-Cancelling Installment Note, the seller receives the installment note, usually with a term shorter that the seller’s life expectancy. The note and any remaining balance owed are cancelled once the seller dies.
Self-Cancelling Installment Notes avoid gift tax on the transfer and exclude any unpaid balance on the note from the seller’s estate, reducing the estate taxes and allowing them to leave more money to their beneficiaries.
You need expert advice from an attorney in order to set up a Self-Cancelling Installment Note. You will need help determining whether a Self-Cancelling Installment Note is right for your circumstances, assets and plans. You also want expert advice and guidance throughout the process so that you end up with a document that reflects your vision and achieves your goals.