Charitable Transfers - Sample Questions 1 - 5

1. Which of the following are true statements concerning private foundations?

(1) The donor deduction is usually a 50% limit on their adjusted gross income.
(2) The donor deduction is usually a 30% limit on their adjusted gross income.
(3) Most contributions are from a single contributor.
(4) The foundation must do its own record keeping and due diligence.
(5) Private foundations must file a Form 990-PF annually.

A) 1, 3 and 5 only
B)
2, 3 and 4 only
C)
2, 3 and 5 only
D) 2, 3, 4 and 5 only

2. Which of the following is an advantage of a Charitable Annuity?

A) Annuity payouts are higher than commercial annuities.
B)
The donor receives annuity payments for their lifetime.
C)
Annuity payments are tax-free.
D) The donor receives a full deduction for property transferred to the charitable annuity.

3. Kevin, a recent retiree, would like to make a significant donation to the Humane Society in his hometown to save animals. He could really use the charitable deduction for his tax return, but he also needs to have exactly $800 per month in income for the next 10 years to cover his fixed mortgage payment. He's afraid that if he gives the lump sum to the charity, he won't have these funds available to pay his mortgage for the next 10 years. Which is the best option for Kevin to consider?

A) CLUT
B)
CRUT
C)
CRAT
D) Pooled Income Fund

4. Mr. and Mrs. Ford would like to do some annual charitable gifting, but they are unsure which program is the best to meet their needs. They come to you for advice, since they do not need the income from these gifts. They would like for their gifts to remain anonymous and they want very little to do with the record keeping or daily operations. Their plan is to contribute a variable amount over the next 15 to 20 years and get their children involved after that to continue the charitable family name. What would you recommend?

A) Donor Advised Funds
B)
Pooled Income Funds
C)
Private Foundation
D)
CRAT

5.
Norma would like to gift $100,000 to each of her two grandchildren within the next 12 years, around the time they would be starting college. She has strong ties to her church and has been gifting the church the income ($10,000) generated from the $200,000 each year. She would like to continue to gift the $10,000 to the church annually. What would be a good option for Norma?

A) Charitable remainder trust
B)
Charitable gift annuity
C)
Donor advised fund
D) Charitable lead trust


Answer Key


Related Articles
  1. Professionals

    Charitable Gift Annuities

    Charitable Gift Annuities
  2. Professionals

    Estate and Gift Taxation

    Estate and Gift Taxation
  3. Saving and Spending

    Top Tips for Maximizing Charitable Deductions

    Charitable donations can be a great financial planning tool. Here are some ways to make the most of them.
  4. Professionals

    Answer Key

    Answer Key
  5. Philanthropy

    Guiding Clients on Charitable Remainder Trusts

    Clients who wish to make donations to charity can reap an enormous tax deduction with charitable remainder trusts, but it must be set up correctly.
  6. Professionals

    Donor Advised Funds

    Donor Advised Funds
  7. Professionals

    Charitable Lead Trusts

    Charitable Lead Trusts
  8. Retirement

    Choosing The Best Charitable Gift Annuity

    Want to support a cause you care about, but still earn income from that donation in your retirement years? This vehicle offers both.
  9. Professionals

    Inter-Vivos and Testamentary Charitable Gifts

    Inter-Vivos and Testamentary Charitable Gifts
  10. Professionals

    Pooled Income Funds

    Pooled Income Funds
RELATED TERMS
  1. Charitable Gift Life Insurance

    A method of contributing to charity by taking out life insurance ...
  2. Donor Advised Fund

    A private fund administered by a third party and created for ...
  3. Charitable Remainder Annuity Trust

    A type of gift transaction in which a donor contributes assets ...
  4. Fractional Gift

    A gift that provides a fractional interest in an artwork today, ...
  5. Bargain Sale To A Charitable Organization

    The sale of a good or service to a charitable organization for ...
  6. Charitable Contributions Deduction

    One of the itemized deductions available for taxpayers who donate ...
RELATED FAQS
  1. Justin and Britney, multi-millionaires, want to make the maximum gift of cash to ...

    The correct answer is c. A donor of money and/or gifts may give up to $12,000 to as many different recipients as they desire ... Read Answer >>
  2. Can I give stock as a gift?

    Stocks, bonds or any other securities can be transferred as gifts. Giving the gift of stock also has benefits for the giver. ... Read Answer >>
  3. Can a church issue a bond?

    The North American Securities Administrators Association (NASAA) has acknowledged that "church bonds" are allowed to be issued ... Read Answer >>
  4. What are the pros and cons of digital gift cards (e-gift cards)?

    Examine the pros and cons of gift cards. Learn about protection in case of loss, monitoring spending by teens and wasted ... Read Answer >>
  5. What are the main kinds of annuities?

    Learn about the four basic types of annuities, and why the different investment and payout options are suitable for different ... Read Answer >>
  6. What is an annuity?

    An annuity is a contract between you and an insurance company in which you make a lump sum payment or series of payments ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center