To Prove Successful in Freezing the Value of an Interest

question 74

Multiple Choice

To prove successful in freezing the value of an interest in a family limited partnership (FLP) , which, if any, of the following techniques is desirable?

• A)The FLP should be created just prior to death to avoid the appearance of being tax motivated.
• B)The FLP should be largely funded with personal assets (e.g., personal residence).
• C)When valuing the FLP interest, apply a large discount, to provide a safety zone for later bargaining with the IRS.
• D)Appraisals of the assets transferred to the FLP should be avoided, as they tend to limit the size of any discount claimed.
• E)None of the above.

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Definitions:

Patrilineal

A system where lineage, inheritance, and social identity are traced through the father's line.

Indian Tribes

Indigenous peoples in the United States with distinct cultures, languages, and territories, recognized as sovereign entities with their own governments and rights.

Mound Builders

Prehistoric indigenous peoples of North America who constructed various types of earthworks, including large mounds used for ceremonial, burial, and residential purposes.

American Southwest

A region in the United States known for its unique cultural heritage, blending Native American, Mexican, and American influences, often characterized by its desert landscape.