Appraisal Services – Promissory Notes and Mortgage Notes
National Valuation and Appraisal Services That Serve Your Needs
Types of notes include:
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Over-Valued Mortgage Notes Will Cost You Needless Fees and Taxes
If you own all, or part of a promissory note or a mortgage note, the question you should ask yourself is “what is the “Fair Market Value” of my mortgage note based upon the definition used by the IRS? Is my note properly valued, or is it over-valued?
Let’s be honest, all note investors want their promissory notes and mortgage notes to be worth as little as permissible for tax purposes, but worth as much as possible for spending purposes.
Rev. Rul. 67-276, 1967-2 CB 321, IRC Sec(s). 2031
The fair market value of notes, secured or unsecured, is presumed to be the amount of unpaid principal, plus accrued interest to the date of the gift, unless the donor establishes a lower value. Unless returned at face value, plus accrued interest, it must be shown by satisfactory evidence that the note is worth less than the unpaid amount (because of the interest rate, or date of maturity, or other cause), or that the note is non-collectable in part (by reason of the insolvency of the party or parties liable, or for other cause), and that the property, if any, pledged or mortgaged as security is insufficient to satisfy it.
Free consulting regarding the best way to structure the promissory note transaction so that the outcome sought has the highest probability of being accomplished. Confidentially and privacy respected and protected.
