Partnership transfer to liquidating trust

The most significant of these benefits is to "freeze" the value of a closely-held business interest or real estate owned by the grantor.

The President in the past year has proposed tax law changes in an effort to prevent taxpayer's use of some of these tax planning techniques.The IDGT works best if the sold assets are subject to discounts in determining their fair market value and if it is expected that the sold assets The installment note should be for a term of years (i.e., 10 or 15 years) may be self liquidating or payable in installments with a balloon or an interest only note with a balloon payment on the due date.If the IDGT purchases life insurance on the grantor's life, then the note should be an interest only with a balloon payment and, if possible, the note should be renewed and kept outstanding until death.When the grantor dies, only the fair market value of the note is included in the grantor's estate.That value will be less than the outstanding principal of the note depending on several factors, including the payout of the note, the interest rate, The IDGT technique freezes the value of the note in the grantor's estate.