Private Annuity RegsPrivate Annuity Regs
Andrew M. Katzenstein, a partner in the Los Angeles office of Katten Muchin Rosenman LLP, reports: Changes proposed to regulations (Treasury Regulations Sections 1.72 and 1.1001-1(j)) governing the income taxation of private annuity sales substantially limit the ability to accomplish income tax savings using that technique. Estate tax advantages of private annuity sales remain, but must be reconsidered
December 1, 2006
Rorie M. Sherman Editor in Chief
Andrew M. Katzenstein, a partner in the Los Angeles office of Katten Muchin Rosenman LLP, reports:
Changes proposed to regulations (Treasury Regulations Sections 1.72 and 1.1001-1(j)) governing the income taxation of private annuity sales substantially limit the ability to accomplish income tax savings using that technique. Estate tax advantages of private annuity sales remain, but must be reconsidered in light of these changes.
Private annuity sales have been promoted lately — primarily to real estate owners — as a way to defer income tax on proceeds received when an appreciated asset is sold. Under the rules that existed before these proposed changes, the purchaser (children) in a private annuity transacti...
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