crown loan

Name for an interest free demand loan, usually from a parent to a child. The borrowed funds are invested and the income from the investment is taxed at the child's rate. This type of loan got its name from Harry Crown of Chicago, who was the first to use it. In 1984, the Supreme Court ruled that the market rate of interest must be imputed on each loan, and treated as a gift subject to gift taxes.

Black's law dictionary. . 1990.

Look at other dictionaries:

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