Linda purchased Debora’s home through use of a self-canceling installment note (SCIN). Under the terms of the SCIN, Linda was to pay her mom $15,000, plus interest, and a SCIN premium, per year for 10 years. If Debora passed away after 4 payments were made, what would be Linda’s adjusted basis in the home?
In the event that the seller passes away before settlement, the contract remains on foot and proceeds to settlement as normal. However, the rights that are usually afforded to the seller under the contract pass instead to the seller’s personal representative who will then be entitled to receive payment of the balance of the purchase money on behalf of the estate. The buyer cannot be compelled to complete until the seller’s personal representative has obtained a grant of probate of the estate.
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