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Family Limited Partnership

A limited partnership with a general partner (usually a parent) and limited partners (usually children). This financial planning vehicle is sometimes used by holders of concentrated stock positions to reduce the value of their estate for tax purposes by transferring assets to it and gifting the limited partnership shares to family members. The gift tax valuation is low because of the discounted value of the unmarketable limited partners' interests. The general partner retains complete control of the partnership's holdings.

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