CFA LEVEL III Exam with verified ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
solutions
Estate deffinition - correct answer✔✔is everything a person owns ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Probate - correct answer✔✔the legal process to confirm the validity of the will. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
what is intestate - correct answer✔✔when you die without a will and a court has to decide
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
who gets what ||\\//|| ||\\//||
civil law vs common law courts - correct answer✔✔civil law is predominant legal system,
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
apply abstract rules or thoughts to case. Common law (Britain and USA) uses the rulings in
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
previous court cases to defend claims ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
communal vs separate property regimes - correct answer✔✔separate: each spouse can ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
control property independently ||\\//|| ||\\//||
in community property regime there is always a 1/2 split regardless
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
4 ways taxes are levied - correct answer✔✔tax on income, tax on wealth, tax on spending,
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
tax on wealth transfers ||\\//|| ||\\//|| ||\\//||
testamentary gratuitous transfer - correct answer✔✔means a transfer of wealth to another ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
person made after death ||\\//|| ||\\//|| ||\\//||
human capital - correct answer✔✔an implied asset that people have. basically their ability
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
to work and generate money
||\\//|| ||\\//|| ||\\//|| ||\\//||
,Formula for how much you should save based on probability of survival - correct ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔[(psurvival) * Spending]/(1+r) ||\\//|| ||\\//||
psurvival=probability of surviving until that year and the cash spend expected in that year ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
r=risk free rate ||\\//|| ||\\//||
why discount probability of spending flows with risk free rate - correct answer✔✔beacuse
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
these flows risk is unrelated to market forces and the probability of dying is unrelated to
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
market forces ||\\//||
formula for geometric average return - correct answer✔✔FV= (1+rg)^n which is equal to ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
each periods return times the next ie...(1+r)*(1+r1)*(1+r2)*(1+r3)
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
how to calculate Rg - correct answer✔✔Rg= r-(.5*std. dev.)
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
r= arithmetic average return
||\\//|| ||\\//|| ||\\//||
how are compounding returns organized and how do withdrawals effect it - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔if you have poor performance to start strong to end and dont take anything out ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
your returns would be the same. If you are liquidating a portion of the portfolio then the
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
sequence matter a great deal ||\\//|| ||\\//|| ||\\//|| ||\\//||
relative value of tax free gift equation - correct answer✔✔FVgift/FVbequest= 1+[r*(1-t)]^n
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
/ [1+r*(1-t)]^n*(1-T)
||\\//||
Big T is tax on transfer. Little T tax on returns for that person. Top is recipient
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
relative value of taxed gift - correct answer✔✔FV gift/ FV bequest = [1+r*(1-t)]^n*(1-T) /
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
[1+r*1-T)]^n
,this assumes that there are different interest rates on lifetime gifts than bequests...
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Bit T tax on transfer. Little T tas on returns. Top is recipient
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
relative value of gift when gifter pays the tax - correct answer✔✔[1+r*(1-tg)]^n*(1-
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
T+TgTe)/(1+r*(1-tg)]^n*(1-te))
deemed dispositions - correct answer✔✔means that at death and transfer there is no tax on
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
transfer but all unrecognized gains and losses become realized and are taxed themselves.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
relative value charitable gift to taxed bequest - correct answer✔✔(1+r)^n +T[1+r*(1-
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
t)]^N*(1-t)/[1+r*(1-t)]^n *(1-t)] ||\\//||
trust settlor or grantor is who - correct answer✔✔man who makes the trust. Beneficiary is
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
not the owner of the trust but gets benefits
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
revocable vs irrevocable - correct answer✔✔revoke: can call back but also responsible for ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
taxes and creditors can make claims on assets. Not the case in irrevocable trust.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
foundation vs trust - correct answer✔✔foundation set up for particular cause or purpose ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
instead of person. Reasons for both are asset control, minimize taxes, asset protection
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
use of life insurance - correct answer✔✔to create liquidity for transfer of hard assets to
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
heirs. also allows you to transfer wealth in some ways where trusts are not acceptable to
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
common law ||\\//||
, CFC and reasons for it - correct answer✔✔controlled foreign corporation. basically shell
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
company off shore where you can hide gains until they are distributed to shareholders and
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
avoid paying taxes until a certain point in time.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Deemed distribution - correct answer✔✔if you own too much of CFC or other things the
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
IRS can just determine you are hiding money offshore and tax you in deemed distribution
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
case.
Hague Conference - correct answer✔✔its an international conference that works to
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
conform private international law ||\\//|| ||\\//|| ||\\//||
source vs residence tax system - correct answer✔✔source: country where revenue comes
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
from taxes product||\\//|| ||\\//||
Residence: tax is placed on resident of country regardless of revenue source ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
united states taxes on assets and real estate in US - correct answer✔✔they tax everything
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
regardless of place of residence. UK not bad as you can avoid taxes if you are not a ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
permanent citizen and do not repatriate your money. many HNW people there keep off ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
shore accounts in sing a pore and other counties
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Double tax in US? - correct answer✔✔yes beacause we tax everything even if foregin
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
resident. but through tax treaties can usually avoid issues. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
types of doubel tax issues - correct answer✔✔residence residence = 2 counties claim as
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
resident
source source= 2 countries calim as source
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
resident source most common. ||\\//|| ||\\//|| ||\\//||
solutions
Estate deffinition - correct answer✔✔is everything a person owns ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Probate - correct answer✔✔the legal process to confirm the validity of the will. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
what is intestate - correct answer✔✔when you die without a will and a court has to decide
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
who gets what ||\\//|| ||\\//||
civil law vs common law courts - correct answer✔✔civil law is predominant legal system,
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
apply abstract rules or thoughts to case. Common law (Britain and USA) uses the rulings in
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
previous court cases to defend claims ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
communal vs separate property regimes - correct answer✔✔separate: each spouse can ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
control property independently ||\\//|| ||\\//||
in community property regime there is always a 1/2 split regardless
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
4 ways taxes are levied - correct answer✔✔tax on income, tax on wealth, tax on spending,
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
tax on wealth transfers ||\\//|| ||\\//|| ||\\//||
testamentary gratuitous transfer - correct answer✔✔means a transfer of wealth to another ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
person made after death ||\\//|| ||\\//|| ||\\//||
human capital - correct answer✔✔an implied asset that people have. basically their ability
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
to work and generate money
||\\//|| ||\\//|| ||\\//|| ||\\//||
,Formula for how much you should save based on probability of survival - correct ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔[(psurvival) * Spending]/(1+r) ||\\//|| ||\\//||
psurvival=probability of surviving until that year and the cash spend expected in that year ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
r=risk free rate ||\\//|| ||\\//||
why discount probability of spending flows with risk free rate - correct answer✔✔beacuse
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
these flows risk is unrelated to market forces and the probability of dying is unrelated to
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
market forces ||\\//||
formula for geometric average return - correct answer✔✔FV= (1+rg)^n which is equal to ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
each periods return times the next ie...(1+r)*(1+r1)*(1+r2)*(1+r3)
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
how to calculate Rg - correct answer✔✔Rg= r-(.5*std. dev.)
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
r= arithmetic average return
||\\//|| ||\\//|| ||\\//||
how are compounding returns organized and how do withdrawals effect it - correct
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
answer✔✔if you have poor performance to start strong to end and dont take anything out ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
your returns would be the same. If you are liquidating a portion of the portfolio then the
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
sequence matter a great deal ||\\//|| ||\\//|| ||\\//|| ||\\//||
relative value of tax free gift equation - correct answer✔✔FVgift/FVbequest= 1+[r*(1-t)]^n
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
/ [1+r*(1-t)]^n*(1-T)
||\\//||
Big T is tax on transfer. Little T tax on returns for that person. Top is recipient
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
relative value of taxed gift - correct answer✔✔FV gift/ FV bequest = [1+r*(1-t)]^n*(1-T) /
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
[1+r*1-T)]^n
,this assumes that there are different interest rates on lifetime gifts than bequests...
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Bit T tax on transfer. Little T tas on returns. Top is recipient
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
relative value of gift when gifter pays the tax - correct answer✔✔[1+r*(1-tg)]^n*(1-
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
T+TgTe)/(1+r*(1-tg)]^n*(1-te))
deemed dispositions - correct answer✔✔means that at death and transfer there is no tax on
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
transfer but all unrecognized gains and losses become realized and are taxed themselves.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
relative value charitable gift to taxed bequest - correct answer✔✔(1+r)^n +T[1+r*(1-
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
t)]^N*(1-t)/[1+r*(1-t)]^n *(1-t)] ||\\//||
trust settlor or grantor is who - correct answer✔✔man who makes the trust. Beneficiary is
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
not the owner of the trust but gets benefits
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
revocable vs irrevocable - correct answer✔✔revoke: can call back but also responsible for ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
taxes and creditors can make claims on assets. Not the case in irrevocable trust.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
foundation vs trust - correct answer✔✔foundation set up for particular cause or purpose ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
instead of person. Reasons for both are asset control, minimize taxes, asset protection
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
use of life insurance - correct answer✔✔to create liquidity for transfer of hard assets to
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
heirs. also allows you to transfer wealth in some ways where trusts are not acceptable to
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
common law ||\\//||
, CFC and reasons for it - correct answer✔✔controlled foreign corporation. basically shell
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
company off shore where you can hide gains until they are distributed to shareholders and
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
avoid paying taxes until a certain point in time.
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
Deemed distribution - correct answer✔✔if you own too much of CFC or other things the
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
IRS can just determine you are hiding money offshore and tax you in deemed distribution
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
case.
Hague Conference - correct answer✔✔its an international conference that works to
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
conform private international law ||\\//|| ||\\//|| ||\\//||
source vs residence tax system - correct answer✔✔source: country where revenue comes
||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
from taxes product||\\//|| ||\\//||
Residence: tax is placed on resident of country regardless of revenue source ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
united states taxes on assets and real estate in US - correct answer✔✔they tax everything
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regardless of place of residence. UK not bad as you can avoid taxes if you are not a ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
permanent citizen and do not repatriate your money. many HNW people there keep off ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
shore accounts in sing a pore and other counties
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Double tax in US? - correct answer✔✔yes beacause we tax everything even if foregin
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resident. but through tax treaties can usually avoid issues. ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//|| ||\\//||
types of doubel tax issues - correct answer✔✔residence residence = 2 counties claim as
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resident
source source= 2 countries calim as source
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resident source most common. ||\\//|| ||\\//|| ||\\//||
