Weatherby & Associates, PC

Holding period
The length of time a taxpayer is deemed to have held an asset. This is important in distinguishing between long-term and short-term capital gains.

Hybrid buy-sell agreement
A buy-sell agreement under which both the entity (partnership or corporation) and the other owners (partners or stockholders) have rights and obligations to buy the interest of a transferring or deceased partner or stockholder.

Incidents of ownership
Economic benefits from the ownership of a life insurance policy. if a deceased holds at death one or more incidents of ownership on a policy of insurance on his or her own life, the proceeds are part of his or her gross estate for estate tax purposes.

Irrevocable trusts
Clients often set up irrevocable trusts, which are another class of inter vivios trusts, for other beneficiaries. In an irrevocable trust the all rights to the property transferrred to the trust are given up. The basic difference between an inter vivos trust and an outright gift is that the former provides the beneficiary with competent property management and with protection from himself and others who might misuse or waste the gift. If the transferred property constitues a taxable gift, the value is added to his gross estate at his death for purposes of determining his estate tax liability. Since outright gifts and irrevocable trusts differ only in terms of control over and protection of the beneficiary, the tax consequences are basically the same.

Installment gift
A gift made by selling property on the installment basis (receiving a note calling for a series of installment payments) and forgiving the payments annually.

Installment sale
A sale in which the seller receives a note calling for a series of installment payments, rather than a sale wholly for cash.

Holding period
The length of time a taxpayer is deemed to have held an asset. This is important in distinguishing between long-term and short-term capital gains.

Hybrid buy-sell agreement
A buy-sell agreement under which both the entity (partnership or corporation) and the other owners (partners or stockholders) have rights and obligations to buy the interest of a transferring or deceased partner or stockholder.

Incidents of ownership
Economic benefits from the ownership of a life insurance policy. if a deceased holds at death one or more incidents of ownership on a policy of insurance on his or her own life, the proceeds are part of his or her gross estate for estate tax purposes.

Irrevocable trusts
Clients often set up irrevocable trusts, which are another class of inter vivios trusts, for other beneficiaries. In an irrevocable trust the all rights to the property transferrred to the trust are given up. The basic difference between an inter vivos trust and an outright gift is that the former provides the beneficiary with competent property management and with protection from himself and others who might misuse or waste the gift. If the transferred property constitues a taxable gift, the value is added to his gross estate at his death for purposes of determining his estate tax liability. Since outright gifts and irrevocable trusts differ only in terms of control over and protection of the beneficiary, the tax consequences are basically the same.

Installment gift
A gift made by selling property on the installment basis (receiving a note calling for a series of installment payments) and forgiving the payments annually.

Installment sale
A sale in which the seller receives a note calling for a series of installment payments, rather than a sale wholly for cash.