Finalnub

markCFAIL wrote:
Prophets - that is an interesting point, but don’t overanalyze as the question told you what was gonna happen.  In CFAI land, they are alaways right (haha)
The reason it minimizes taxes is because they are SELLING now, so cap gains taxes are the same in either port.  One of the ports is also subject to an estate tax, where the other one is not.  So to minimize TOTAL taxes (including future) you would want to clear out the portfolio with the estate taxes to have the lowest value so that upon death there is less value to be taxed.  If you sold out of the other portfolio you don’t save anything upon death because there were no estate taxes anyhow and no need to reduce the estate value to minimize them.
i agree and see your point.  it took me like 5x reading this question just to understand what exactly they were saying.
candidly my response on the exam probably would have been that this question makse no sense, the curriciulum says you give up control under an irrevocable trust, it’s up to the trustee, therefore it has to be done in the revocable.  i’d like to know what country this is that has an irrevocable trust where you can go and change the assets like this, because i might move there then.
IDK if i get partial credit or zero credit, but that was my first reaction that this is an implausible scenario.  it’s also what i wrote when i took the mock of this exam.