Which of the following is a charitable lead trust? The income of the trust fund goes to an individual until death, at which time the principal is conveyed to a charitable organization. Charitable gifts are placed into the trust until a certain dollar amount is achieved and is then transferred to a specified charitable organization. The income of a trust fund goes to a charitable organization for a specified time with the principal then being conveyed to a different beneficiary. A charity conveys money to a trust that generates income for the charity’s use in its various projects.

Which of the following is a charitable lead trust? The income of the trust fund goes to an individual until death, at which time the principal is conveyed to a charitable organization. Charitable gifts are placed into the trust until a certain dollar amount is achieved and is then transferred to a specified charitable organization. The income of a trust fund goes to a charitable organization for a specified time with the principal then being conveyed to a different beneficiary. A charity conveys money to a trust that generates income for the charity’s use in its various projects.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter20: Income Taxation Of Trusts And Estates

Section: Chapter Questions

Problem 32P

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Which of the following is a charitable lead trust? Choose the correct.a. The income of the trust fund goes to an individual until death, at which time the principal is conveyed to a charitable organization.b. Charitable gifts are placed into the trust until a certain dollar amount is achieved and is then transferred to a specified charitable organization.c. The income of a trust fund goes to a charitable organization for a specified time with the principal then being conveyed to a different beneficiary.d. A charity conveys money to a trust that generates income for the charity’s use in its various projects.
Which of the following are correct statements about the nontax characteristics of a charitable lead trust? The income stream must be paid for the lifetime of the beneficiary. The grantor of the trust receives a charitable income tax deduction in the year the trust is funded. The trust must distribute the remainder interest in the corpus to a noncharitable beneficiary. The trust must distribute the remainder interest in the corpus to a charitable beneficiary. A) I and IV B) I and II C) II and III D) II and IV
All of the following statements regarding charitable remainder annuity trusts (CRATs) and charitable remainder unitrusts (CRUTs) are CORRECT except A)they may be established as revocable trusts. B)the annual payout to an income beneficiary may not exceed 50% of the value of the trust. C)the remainder interest at inception must be greater than or equal to 10% of the original value of the property transferred to the trust. D)the remainder beneficiary is a charity.
Which statement correctly describes a feature of a charitable split-interest trust? A)A grantor who transfers $1,000,000 to a grantor trust with a qualified charity as the remainderman and receives a $40,000 annuity each year is eligible for an immediate income tax deduction. B)CRATs and CRUTs are both revocable trusts. C)A charitable lead annuity trust (CLAT) provides a fixed-income stream to a charity. D)A charitable lead unitrust (CLUT) provides a periodic payment to the grantor that increases each year, provided that the assets in the trust appreciate in value.
What is the difference between a testamentary trust and an inter vivos trust? Choose the correct.a. A testamentary trust conveys money to a charity; an inter vivos trust conveys money to individuals.b. A testamentary trust is created by a will; an inter vivos trust is created by a living individual. c. A testamentary trust conveys income to one party and the principal to another; an inter vivos trust conveys all monies to the same party. d. A testamentary trust ceases after a specified period of time; an inter vivos trust is assumed to be permanent.
A donor gives a gift to a charity that is to be conveyed to a separate beneficiary. What is the method of reporting for each party if the donor retains the right to revoke or redirect use of the gift?
How would a recipient for a not-for-profit entity record the receipt of a gift that will be transferred without restriction to another charitable entity? What if the donor retains the right to revoke or redirect the gift?
Which one of the following is a correct statement about the nontax characteristics of a pooled income fund? A)It must pay a fixed dollar amount to the charitable beneficiary annually. B)The principal is distributed to the charitable beneficiary at the end of the noncharitable beneficiary's (or beneficiaries') life (or lives). C)Only the grantor and the charity can be beneficiaries. D)The income beneficiary cannot receive more than 10% of the original principal value per year.
A donor gives a gift to a charity that must be conveyed to a separate beneficiary. What is the normal method of reporting for each party?
If there was a gift that would be transferred without restriction to another charity entity, how would a recipient for a not-for-profit entity record the receipt of that gift? Can the donor retain the right to revoke or redirect the gift?
If there was a gift that would be transferred without restriction to another charity entity, how would a recipient for a not-for-profit entity record the receipt of that gift? Can the donor retain the right to revoke the gift?
Henry has established a revocable living trust, which he has only partially funded. Which of the following statements regarding this trust is CORRECT? Any assets that have been transferred to the trust before Henry's death will be subject to probate. Any income from the trust assets is taxable to the trust at trust income tax rates. Any assets that are not transferred to the trust before Henry's death will be subject to probate. A)II only B)III only C)I only D)II and III