"INTEREST-FREE FAMILY LOANS remain outside the purview of the federal estate and gift tax statutes despite the recent efforts of the Internal Revenue Service to convince the judiciary that, in such loans, the fair market value of the foregone interest is a gift. This is an extrapolation of the Service's efforts to find income to the recipient in other interest-free money situations. In light of the Service's limited activity in dealing with tax consequences of the interest-free loans, the Seventh Circuit's decision in Crown v. Commissioner' will be an important reference for estate and tax planning. Doubtlessly, the Service will register its non-acquiescence to Crown as it did with Johnson v. United States.' Consequently, the issue of interest-free family loans will be reviewed in the future by other circuits."
Robb, Linda Haught
"Nontaxable Transfers; Interest-Free Loans; Crown v. Commissioner,"
Akron Law Review: Vol. 12
, Article 8.
Available at: http://ideaexchange.uakron.edu/akronlawreview/vol12/iss3/8