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Taxpayers sometimes sell property to other family members using installment sales. But what happens if a taxpayer dies before the payments are completed? Generally, the value of the note is included in his or her taxable estate. However, by using a "self-canceling installment note," the buyer's obligation to make payments automatically ends if the seller dies before the end of the note term. Such transactions are scrutinized by the IRS, but as this court case illustrates, taxpayers can be victorious.

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