Drew, 72, is a widower with a gross estate worth $975,000. He is in the highest current marginal income tax bracket. Drew would like to make a sizable charitable contribution to the American Diabetes Association, and would like the charitable contribution to provide him with a fixed income for the rest of his life. Which one of the following charitable transfers is most appropriate for Drew to use to best achieve his estate planning objective? A)A charitable outright gift, since it reduces Drew's income tax liability substantially B)A charitable lead trust, since it provides Drew with a fixed income stream C)A charitable remainder annuity trust, since it provides the desired income to Drew D)A charitable remainder unitrust, since it provides Drew with a charitable contribution deduction
Drew, 72, is a widower with a gross estate worth $975,000. He is in the highest current marginal income tax bracket. Drew would like to make a sizable charitable contribution to the American Diabetes Association, and would like the charitable contribution to provide him with a fixed income for the rest of his life. Which one of the following charitable transfers is most appropriate for Drew to use to best achieve his estate planning objective? A)A charitable outright gift, since it reduces Drew's income tax liability substantially B)A charitable lead trust, since it provides Drew with a fixed income stream C)A charitable remainder annuity trust, since it provides the desired income to Drew D)A charitable remainder unitrust, since it provides Drew with a charitable contribution deduction
Chapter13: Estate Taxes
Section: Chapter Questions
Problem 1CTD
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Question
Drew, 72, is a widower with a gross estate worth $975,000. He is in the highest current marginal income tax bracket. Drew would like to make a sizable charitable contribution to the American Diabetes Association, and would like the charitable contribution to provide him with a fixed income for the rest of his life.
Which one of the following charitable transfers is most appropriate for Drew to use to best achieve his estate planning objective?
A)A charitable outright gift, since it reduces Drew's income tax liability substantially
B)A charitable lead trust, since it provides Drew with a fixed income stream
C)A charitable remainder annuity trust, since it provides the desired income to Drew
D)A charitable remainder unitrust, since it provides Drew with a charitable contribution deduction
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