Passing installment notes by death will avoid any income tax on the deferred gain.

Name: Passing installment notes by death will avoid any income tax on the deferred gain.
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Passing installment notes by death may avoid estate tax but does not avoid income tax on the deferred gain. When the recipient of the note receives payments, they will owe taxes on the gain in each payment received.

Passing Installment Notes by Death Will Avoid Any Income Tax