Questions about defective trust and Foundations valuation discounts(reading 16)

On P.174, curriculum v2, the author did not explain the last sentence in “transactions with defective trusts” in detail, how can i understand “…or in some instances, through loans or loan guarantees.”? Also in curriculum v2, P.181, when discussing why “Valuation discounts are typically ont applicable in the case of a foundation…”, I can’t catch what this small paragraph mean, can anybody help me out? many thanks!!! BTW, I think the Schweser Notes 2009 for L3 are written in such a brief style, many knowledge points were not fully discussed or elaborated. I felt confident only with Notes when I took L1 &2, but now, I am hesitating…will the notes be enough for exam?

Not sure what you are asking on the first question. However, for the second question, usually, a donor want to maximixe the value of the contribution to a foundation because it offers tax benefits, that is why valuation discounts are typically not applicable to foundation. I used notes primary during LIII, used CFAI material as supplements.

lipinyi - I am right there with you! I’m just finishing up Reading #16 in Schweser but have decided to start reading (or at least skimming) the CFAI material as well. The Schweser Notes are too brief (especially looking back at reading #14 & #15). I don’t want to miss points. I still like the notes b/c they get right to the point of the LOS but the actual reading provides a much better foundation for fully understanding the material. So, I’m sticking with my new plan – that being, reading the Notes and reading/skimming CFAI. Can’t help you on the defective trust and valuation discount benefit. Need to look into it more myself. Sorry and best of luck.