Although a 1929 case, Commissioner v. Moore Corp., had suggested that an interest deduction could be claimed by the obligor under a private annuity arrangement, cases considering the issue since that time have held that no part of the payments made under private annuities involving the acquisition of property is deductible as interest. A 1992 decision by the U.S. Claims Court, Rye v. United States, is in accord with the view that an interest deduction may not be claimed by the obligor and the imputed interest rules likewise do not apply to private annuities.
"No Interest Deduction for Private Annuities,"
Agricultural Law Digest: Vol. 3
, Article 1.
Available at: https://lib.dr.iastate.edu/aglawdigest/vol3/iss14/1