Investopedia

Continue to Site »

Crown Loan

Filed Under »
Dictionary Says

Definition of 'Crown Loan'

A loan with no set maturity date, These loans are typically made by a wealthy parent or grandparent to a lower income child or grandchild. They are named after Harry Crown, a Chicago industrialist, who first used this type of loan so the borrower could invest the loaned funds and pay less taxes on the income because they were in a lower tax bracket.
Investopedia Says

Investopedia explains 'Crown Loan'

For many years, high-income individuals were able to make loans to lower-income individuals at zero-interest rates or significantly lower rates than those available elsewhere. The borrower could then invest the funds and pay little to no taxes on the earnings from the investment. In 1984, the U.S. Supreme Court finally caught on and ruled that these loans would be subject to gift taxes unless they were made at similar interest rates to the prevailing market rates.

Articles Of Interest

  1.

    Pass On Wealth To Spread Holiday Cheer

    Find out why money can sometimes be the perfect gift.

  2. Bursting Boomers' Inheritance Dreams

    Waiting for a big payload from an aging relative? The chance of cashing in is lower than you think.

  3. Want To Leave Money To Your Family? Stretch Your IRA

    Find out how your beneficiaries can enjoy tax-deferred growth for as long as possible.

  4. Handling Family Looking For A Handout: It's Elemental

    If your siblings tend to you for money, head them off tactfully by teaching their kids about finance.

  5. 8 Ways To Help Family Members In Financial Trouble

    Find out how to help the ones you love without hurting yourself.

  6. Older Parents Face New Financial Challenges

    Older parents are becoming the norm, but when it comes to finances, this choice has special considerations.

  7. Outfox The Debt Collector's Hounds

    Dealing with a collection agency is scary if you don't know your rights. We help you take back the power.

  8. Why Low-Income Citizens Should Avoid Payday Loans

    This article looks at short-term borrowing and why low-income citizens should avoid it.

  9. Peer-To-Peer Lending - Determining The Future Of Banking Across The World

    The peer-to-peer lending industry continues to flourish. What does this mean for the future of loans from banks?

  10. 5 Reasons To Avoid Payday Loans

    Although payday loans may seem like an attractive option in a pinch, they may also leave you worse off in the long run.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  2. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  3. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  4. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  5. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  6. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.
Trading Center