Reduction in the Principal In debtedness of the Note--There is little tax law addressing whether a reduction in the principal amount of a promissory note
issued in an intrafamily sale under the facts of the example set forth above constitutes a gift by the seller/creditor or cancellation of debt (COD) income to the purchaser/borrower.
But the bill of exchange and the promissory note
can not be regarded as two forms of the same instrument, for several reasons, namely: the obligation of the issuer in the case of the promissory note
differs from the obligation of the issuer in the case of the bill of exchange, more specifically said, the issuer's obligation in the case of the promissory note
lies in making itself the payment, and the drawer's obligation, the issuer in the case of bill of exchange, is to ensure the payment, the obligation of payment occurs only in the event of failure of payment or denied payment by the paying shirred.
Nieginski said that Shpak and Berfond took the owner and his attorney aside and threatened to cancel the closing by claiming that they had an interest in the property and that title could not be transferred to Nieginski unless he signed the promissory note
As payment for the promissory note
, the company issued a total of 12,279,130 shares of common stock to LDN Stuyvie Partnership, valued at $0.
The date on which the promissory note
is executed should be written in the note.
And the hundreds of thousands of sheets of paper that used to define the office are gone, as students fill out applications and sign their promissory notes
5 million shares of common stock called Consideration Shares (valued at $3 million USD), and issued Protrust a Promissory Note
in the amount of $3 million USD, resulting in a total purchase price of $8 million USD at the time of closing.
Of that amount, $1 million must be used to satisfy the principal balance on the promissory note
The promissory note
carried a market rate of interest for a reasonable and fixed term.
The acquisition was for a convertible promissory note
in the amount of $250,000.
If consummated under the proposed terms, MWXI would pay an aggregate of $21 million, payable as: $5 million in cash; a secured promissory note
in the initial amount of $13 million; and unregistered common stock of MWXI valued at $3 million (the "MWXI Shares").
In Oren, TC Memo 2002-172, the Tax Court held that a shareholder's loan to his S corporation, although evidenced by a promissory note
, a cancelled check representing disbursement of the loan proceeds and subsequent interest payments, did not generate basis.
payments are guaranteed by Eximbank for 100% of principal and interest.
8 million is to be paid through a promissory note
issued at closing.
In Young, 240 F3d 369 (2001), aff'g 113 TC 152 (1999), the Fourth Circuit held that a taxpayer did not recognize gain on the transfer of appreciated land to his former spouse in settlement of his default on a promissory note