Practice Test Geeks(AIP) Accredited Investment Professional Certification Practice Test
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AIP Tax Planning & Estate Strategies Flashcards

6 cards from real AIP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 AIP Tax Planning & Estate Strategies flashcards as text

  1. A 'qualified opportunity zone' investment allows investors to defer or reduce capital gains taxes by:

    Answer: Investing realized gains in designated economically distressed areas within 180 days

    Under the Opportunity Zone program, investors who reinvest capital gains into a Qualified Opportunity Fund within 180 days can defer taxes and potentially eliminate gains on the new investment if held 10+ years.

  2. Which estate planning tool allows a person to specify how assets are distributed at death while avoiding the probate process?

    Answer: A revocable living trust

    Assets held in a revocable living trust transfer directly to beneficiaries upon death without going through the public and time-consuming probate process.

  3. The annual gift tax exclusion allows an individual to give up to a set amount per recipient per year:

    Answer: Free from gift tax, with no impact on the lifetime exemption

    Gifts within the annual exclusion ($18,000 per recipient in 2024) are completely free of gift tax and do not reduce the donor's lifetime gift and estate tax exemption.

  4. What is the primary purpose of a 529 college savings plan?

    Answer: To allow tax-free growth and tax-free withdrawals for qualified education expenses

    529 plans grow tax-deferred and distributions used for qualified education expenses — tuition, books, room and board — are entirely tax-free at the federal level.

  5. In tax planning, 'income shifting' refers to:

    Answer: Moving income to a family member in a lower tax bracket to reduce the overall tax burden

    Income shifting strategies legally transfer income-producing assets or business income to relatives in lower brackets, reducing the family's total tax liability.

  6. A donor-advised fund (DAF) allows an investor to:

    Answer: Receive immediate charitable deductions while retaining advisory control over grant timing

    With a DAF, the donor contributes assets, claims an immediate tax deduction, and then recommends grants to charities over time, all while the fund grows tax-free.