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<p>So, there was no side agreement to forgive -- they simply made an annual gift? Does that create forgiveness of debt income?</p>
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<p>Jeff<br>
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<div id="divRplyFwdMsg" dir="ltr"><font style="font-size:11pt" color="#000000" face="Calibri, sans-serif"><b>From:</b> wsbapt-bounces@lists.wsbarppt.com <wsbapt-bounces@lists.wsbarppt.com> on behalf of Lisa Schuchman <lisa@lisaschuchman.com><br>
<b>Sent:</b> Wednesday, November 16, 2016 4:53 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv<br>
<b>Subject:</b> Re: [WSBAPT] Sibling buy out</font>
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<span style="font-family:"Garamond","serif"">I have used a Note with annual gifting by the payees in a similar situation. It was a family and the family members trusted each other, which would make a difference. This eliminated the tax issues.</span></p>
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<b><span style="font-size:10.0pt; font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt; font-family:"Tahoma","sans-serif""> wsbapt-bounces@lists.wsbarppt.com [mailto:wsbapt-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>jeffrey winter<br>
<b>Sent:</b> Wednesday, November 16, 2016 4:31 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv<br>
<b>Subject:</b> [WSBAPT] Sibling buy out</span></p>
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<p><span style="font-family:"Calibri","sans-serif"; color:black">Listmates,</span></p>
<p><span style="font-family:"Calibri","sans-serif"; color:black"> </span></p>
<p><span style="font-family:"Calibri","sans-serif"; color:black">I have an estate where mom died leaving 3 beneficiaries -- two children, and the surviving spouse of a third child who survived the parent, but died shortly afterward. Surviving spouse takes
the deceased child's share under a Community Property Agreement (Will had specified to the three children "share and share alike", with no provision for descendants of a deceased child taking...).</span></p>
<p><span style="font-family:"Calibri","sans-serif"; color:black"> </span></p>
<p><span style="font-family:"Calibri","sans-serif"; color:black">One child is residing in mom's home, and wishes to stay there (the "taking child") -- the other child and the surviving spouse of the decease child, would like the taking child to be able to live
at mom's house, but wish to be protected in the event it is sold. The plan presently is for mom's estate to convey the house to the taking child, subject to a note and second deed of trust in favor of the sibling and surviving spouse. The sibling and surviving
spouse intend to forgive the payments due under the note, but -- in the event the house is sold-- would have their interests protected.</span></p>
<p><span style="font-family:"Calibri","sans-serif"; color:black"> </span></p>
<p><span style="font-family:"Calibri","sans-serif"; color:black">There will be a TEDRA outlining this arrangement -- the question is: do we refer to the intent to forgive payments under the note in the TEDRA? I would think that to be fair to the taking child,
we would...but I'm concerned about what effect this might have with respect to excise and/or income taxes.</span></p>
<p><span style="font-family:"Calibri","sans-serif"; color:black"> </span></p>
<p><span style="font-family:"Calibri","sans-serif"; color:black">Jeff Winter</span></p>
<p><span style="font-family:"Calibri","sans-serif"; color:black"> </span></p>
<p><span style="font-family:"Calibri","sans-serif"; color:black">Law Office of Jeffrey D. Winter, P.S.</span></p>
<p><span style="font-family:"Calibri","sans-serif"; color:black">604 North Main Street</span></p>
<p><span style="font-family:"Calibri","sans-serif"; color:black">Ellensburg, WA 98926</span></p>
<p><span style="font-family:"Calibri","sans-serif"; color:black">(509) 925-9600</span></p>
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