An installment sale to an irrevocable grantor trust is a popular estate-planning tool that allows the grantor to freeze the growth of an appreciating asset by selling it to a grantor trust in return for a promissory note. The sale is ignored for federal income tax purposes, because transactions between a grantor and a trust (all of which is deemed owned by the grantor under Subpart E of Subchapter J of the Internal Revenue Code) are not regarded as sales for federal income tax purposes.1
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