AEP Charitable Planning & Philanthropy 2

Question 1

Which of the following best describes a 'flip CRUT'?

Accepted Answer

A net income CRUT that flips to a standard CRUT upon a triggering event such as asset sale

Answer

A CRUT that converts to a CRAT upon the death of the income beneficiary

Answer

A CRUT that distributes income to two separate charities simultaneously

Answer

A CRUT funded with non-income-producing assets that immediately converts on funding

Question 2

Under the self-dealing rules of IRC Section 4941, which transaction between a private foundation and a disqualified person is PROHIBITED?

Accepted Answer

A disqualified person selling property to the foundation at fair market value

Answer

Granting scholarships to unrelated students

Answer

The foundation paying a disqualified person's salary for reasonable compensation

Answer

Making grants to public charities selected by the disqualified person

Question 3

A private foundation must distribute at least what percentage of its net investment assets annually to avoid the excise tax on failure to distribute income under IRC Section 4942?

Accepted Answer

5%

Answer

3%

Answer

7%

Answer

10%

Question 4

A Charitable Gift Annuity (CGA) differs from a Charitable Remainder Annuity Trust (CRAT) primarily because:

Accepted Answer

A CGA is a direct contract between the donor and the charity, not a separate trust

Answer

A CGA provides a larger charitable deduction than a CRAT for the same gift amount

Answer

A CGA assets are segregated from the charity's general assets

Answer

A CGA requires a minimum transfer of $100,000

Question 5

When a donor contributes appreciated long-term capital gain property to a public charity, the AGI deduction limit is:

Accepted Answer

30% of AGI

Answer

20% of AGI

Answer

50% of AGI

Answer

60% of AGI

Question 6

Which estate planning tool allows a donor to make a large irrevocable gift to a pooled fund managed by a charity while retaining the right to income for life, with the remainder passing to the charity?

Accepted Answer

Pooled Income Fund

Answer

Charitable Lead Trust

Answer

Donor-Advised Fund

Answer

Supporting Organization

Question 7

A supporting organization under IRC Section 509(a)(3) differs from a private foundation because it:

Accepted Answer

Is treated as a public charity due to its close operational relationship with supported public charities

Answer

Must distribute at least 10% of assets annually

Answer

Is exempt from all self-dealing restrictions

Answer

Can accept anonymous contributions without disclosure