22. Perry's father sold the family business to him using a private annuity. The private annuity was structured such that Perry would pay his father $40,000 per year plus interest, for the remainder of his father's life. At the date of the sale, Perry's father's life expectancy was 20 years and Perry's father was in great health. After six years, Perry's father died of a heart attack and Perry sold the business for $2,000,000 six months after his father's death. What is Perry's capital gain/loss on the transaction? a. $240,000 b. $1,760,000 c. $1,960,000. d. $2,000,000 23. Todd purchased his mother's $200,000 home through use of a SCIN. Under the terms of the SCIN, Todd was to pay his mother $20,000, plus interest, and a SCIN premium, per year for 10 years. If Todd's mother died after 4 payments were made, what would be Todd's adjusted basis in the home? a. $0. b. $80,000 c. $160,000. d. $200,000 24. Which of the following statements regarding Family Limited Partnerships (FLP) is correct? a. The primary purpose of creating a FLP is to provide joint management of the property contributed to the FLP. b. At the creation of the FLP, the transferring individual will have a capital gain equal to the difference between the fair market value of the property transferred and his adjusted basis in the property. c. The limited partners in the FLP control all of the day-to-day functions of the FLP. d. Transfers of the limited partnership interests in the FLP are usually eligible for minority and lack of marketability valuation discounts. 25. Which of the following techniques will not help an individual lower his gross estater a. Pay-on-Death Arrangement (POD). b. Private Annuity c. Gift during lifetime. d. Self-Canceling Installment Note (SCIN). 22. Perry's father sold the family business to him using a private annuity. The private annuity was structured such that Perry would pay his father $40,000 per year plus interest, for the remainder of his father's life. At the date of the sale, Perry's father's life expectancy was 20 years and Perry's father was in great health. After six years, Perry's father died of a heart attack and Perry sold the business for $2,000,000 six months after his father's death. What is Perry's capital gain/loss on the transaction? a. $240,000 b. $1,760,000 c. $1,960,000. d. $2,000,000 23. Todd purchased his mother's $200,000 home through use of a SCIN. Under the terms of the SCIN, Todd was to pay his mother $20,000, plus interest, and a SCIN premium, per year for 10 years. If Todd's mother died after 4 payments were made, what would be Todd's adjusted basis in the home? a. $0. b. $80,000 c. $160,000. d. $200,000 24. Which of the following statements regarding Family Limited Partnerships (FLP) is correct? a. The primary purpose of creating a FLP is to provide joint management of the property contributed to the FLP. b. At the creation of the FLP, the transferring individual will have a capital gain equal to the difference between the fair market value of the property transferred and his adjusted basis in the property. c. The limited partners in the FLP control all of the day-to-day functions of the FLP. d. Transfers of the limited partnership interests in the FLP are usually eligible for minority and lack of marketability valuation discounts. 25. Which of the following techniques will not help an individual lower his gross estater a. Pay-on-Death Arrangement (POD). b. Private Annuity c. Gift during lifetime. d. Self-Canceling Installment Note (SCIN)
