The amount extended to a borrowing bank is the discounted value
of collectibles that serve as collateral.
Insureds under policies that are viable candidates for life settlement are typically in worse-than-average health and therefore their remaining expected lifetimes are short enough that the discounted value
of the death benefit, less future premiums, is larger than the insurer's reserve for the policy.
Even if a creditor could compel payoff of the entire note, the note's face amount reflects only the discounted value
of the LLC or partnership interests sold to the TPT.
Decomposing loss The estimates plotted in Figure 2 can be used to calculate the effects of between- and within-patent entry on the present discounted value
of sales during those years, evaluated at age zero, i.
One drawback to using these discounts is that, if the IRS challenges a gift's discounted value
and finds it to be incorrect, a portion of it could wind up being allocated against (and reducing) the lifetime exclusion amount (or could become taxable, if the total exclusion has been exceeded).
Taking a careful approach to life settlements is important because the seller is often in a position of economic distress and feels forced to sell what may be an asset of substantial value below its true discounted value
price, Schapiro said.
If challenges based on sections 2703 and 2704 fail, the IRS may assert that the formation of the partnership itself and the transfer of partnership interests rather than the underlying assets are merely a device to transfer wealth to the transferor's heirs at a discounted value
The discounted value
of the company's reserves increased 19% despite lower natural gas prices at October 31, 2007 compared to last year.
Thus, the amount of the sales price attributable to open-service and construction contracts would appear to be the discounted value
of revenue expected to be received on the contracts by the buyer subsequent to the sale.
A fully insured liability may be reported at its undiscounted amount while the related recovery asset is reported at a much lower discounted value
The undiscounted value of reserves was $101,501,000 at October 31, 2007, and the discounted value
(at 10%) was $62,071,000.
The purpose of making such a gift is to pass the value of real property likely to appreciate to the beneficiary at a discounted value
, and avoid future estate taxes on any appreciation (as long as the grantor outlives the trust term).