Estate-Planning Tool Used by NBA Owner Likely Taxable Gift, Not Annuity

For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

July 7 — The estate-planning instrument used by former Detroit Pistons' owner Bill Davidson to transfer shares in his privately held company to his grandchildren likely would be debt, not the claimed annuity.

Law professor Jerome M. Hesch told Bloomberg BNA July 7 that the self-canceling installment notes (SCINs)—which Davidson used to transfer shares in Guardian Industries Corp. to trusts for the benefit of his grandchildren—were installment debt instruments under applicable Internal Revenue Service regulations.

Davidson was the president, chairman and chief executive officer of Guardian and held a 78 percent interest in the company prior to the share transfers. Davidson died a few months after the transfers.

Request Daily Tax Report