Estate Planning: Chapter 7, Finance and Legal Studies Program, Academic Year 2026 – Study
Guide and Key Concepts
In a Family Limited Partnership (FLP), there may be special valuation discounts available to
enable wealth to pass to younger generations at a significantly lower tax cost than would
otherwise be possible. One of these is the "lack of marketability" discount. What is the other?
A) The "limited partner" discount
B) The "succession of generations" discount
C) The "minority interest" discount
D) The "property right" discount - correct answer ✔✔ C) The "minority interest" discount
A Family Limited Partnership (FLP) offers all of the following advantages except:
A) Significant discounts in valuing transfers of partnership interests
B) A convenient way to gift assets that are generally difficult to break into easily giftable pieces
C) A method of keeping appreciation taxable to the older generation
D) A means of giving away property while still maintaining control - correct answer ✔✔ C) A
method of keeping appreciation taxable to the older generation
Which of the following entities does not have the benefit of pass-through taxation?
a. FLP
b. LLC
c. C Corp
d. S. Corp - correct answer ✔✔ c. C Corp
Which of the following statements is correct concerning Medicaid?
a. Medicaid is the government's medical insurance program for those age 65 and older.
, b. Medicaid is the government's medical and assisted living program for the poor.
c. Medicaid only pays for care in approved, skilled nursing homes after a hospital stay.
d. Medicaid coverage is limited to 100 days per episode of illness. - correct answer ✔✔
b.Medicaid is the government's medical and assisted living program for the poor.
When applying for Medicaid, the look back period for transfers of income and assets to family
members is
a) 9
b) 12
c) 36
d) 60 - correct answer ✔✔ d) 60
In a typical family limited partnership:
A) The owners of the closely held business transfer general partnership interests to their
children or grandchildren
B) No discount is allowed on the gifts since the children's interest as a group will be more than
50%
C) The children receive limited partnership interests
D) The family limited partnership should be funded with assets that are not expected to
appreciate - correct answer ✔✔ C) The children receive limited partnership interests
John is 67 years old, and would like to transfer some of his assets to his adult son, Murray. John
does not want to incur a gift tax liability, and also needs some cash flow, so he is considering
selling the assets to his son. A friend recently informed John that a self-cancelling installment
note (SCIN) is a good planning strategy for many reasons. Which of the following statements
regarding self-cancelling installment notes (SCINs) is/are correct?
Guide and Key Concepts
In a Family Limited Partnership (FLP), there may be special valuation discounts available to
enable wealth to pass to younger generations at a significantly lower tax cost than would
otherwise be possible. One of these is the "lack of marketability" discount. What is the other?
A) The "limited partner" discount
B) The "succession of generations" discount
C) The "minority interest" discount
D) The "property right" discount - correct answer ✔✔ C) The "minority interest" discount
A Family Limited Partnership (FLP) offers all of the following advantages except:
A) Significant discounts in valuing transfers of partnership interests
B) A convenient way to gift assets that are generally difficult to break into easily giftable pieces
C) A method of keeping appreciation taxable to the older generation
D) A means of giving away property while still maintaining control - correct answer ✔✔ C) A
method of keeping appreciation taxable to the older generation
Which of the following entities does not have the benefit of pass-through taxation?
a. FLP
b. LLC
c. C Corp
d. S. Corp - correct answer ✔✔ c. C Corp
Which of the following statements is correct concerning Medicaid?
a. Medicaid is the government's medical insurance program for those age 65 and older.
, b. Medicaid is the government's medical and assisted living program for the poor.
c. Medicaid only pays for care in approved, skilled nursing homes after a hospital stay.
d. Medicaid coverage is limited to 100 days per episode of illness. - correct answer ✔✔
b.Medicaid is the government's medical and assisted living program for the poor.
When applying for Medicaid, the look back period for transfers of income and assets to family
members is
a) 9
b) 12
c) 36
d) 60 - correct answer ✔✔ d) 60
In a typical family limited partnership:
A) The owners of the closely held business transfer general partnership interests to their
children or grandchildren
B) No discount is allowed on the gifts since the children's interest as a group will be more than
50%
C) The children receive limited partnership interests
D) The family limited partnership should be funded with assets that are not expected to
appreciate - correct answer ✔✔ C) The children receive limited partnership interests
John is 67 years old, and would like to transfer some of his assets to his adult son, Murray. John
does not want to incur a gift tax liability, and also needs some cash flow, so he is considering
selling the assets to his son. A friend recently informed John that a self-cancelling installment
note (SCIN) is a good planning strategy for many reasons. Which of the following statements
regarding self-cancelling installment notes (SCINs) is/are correct?
