Legal Question in Tax Law in California

Re: Promissory Note received by Minor

I think your question is a bit muddled... If the note that was gifted had a basis of "100 dollars" and was being paid back each year (10 dollars a year + interest). Then barring something strange, the amount received attributable to basis is not taxed (not a deduction, it is not income). The amount received attributable to income, is taxed. It doesn't matter who holds the note, if the note passes to a minor child, then barring the odd occurrence previously stated, they should have the same basis as the previous owner did..

I can't think of what deduction you could be referring to if what I said above does not apply.