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GiftLaw Pro Home   >  Chapter 3 - Deferred Gifts  >  3.6 Lead Trust Applications  >  3.6.1 Double Discount Lead Trust  >  Basic Quiz

Basic Quiz - 3.6.1 Double Discount Lead Trust

1. The double discount lead trust allows a donor to transfer property to family with greatly reduced or eliminated transfer tax.
           
2. A family limited partnership, by itself, does not produce a charitable gift.
           
3. A family limited partnership can be created for any reason.
           
4. The assets in the family limited partnership may be discounted because of the lack of marketability and/or the lack of liquidity.
           
5. The double discount lead trust involves using both a family limited partnership (or limited liability company) and a charitable lead annuity trust.
           
6. The discount for a family limited partnership with liquid securities is usually about 50%.
           
7. If the FLP operates an active business and family limited partnership shares are placed in a lead trust, the unrelated business taxable income is not a problem because a lead trust is a taxable trust.
           
8. There are no adverse consequences for placing an FLP with debt in a lead trust.
           
9. By using an FLP (or LLC) and lead trust it is possible to transfer assets to family in a shorter period of time without any gift or estate tax.
           
10. If a donor wished to do a double discount lead trust, it is important to have an experienced attorney and appraiser.