Charitable Planning & Philanthropy Flashcards

The income tax deduction available to a donor who contributes property to a Charitable Remainder Trust equals:

Answer: The present value of the charitable remainder interest, calculated using IRS tables

The donor's income tax deduction for a CRT contribution equals the actuarially determined present value of the remainder interest that will eventually pass to charity, using IRS discount rates and tables.

Under current tax law, cash contributions to public charities (50% organizations) are generally deductible up to what percentage of the donor's adjusted gross income (AGI)?

Answer: 60% of AGI

The Tax Cuts and Jobs Act of 2017 increased the AGI limitation for cash contributions to public charities from 50% to 60%, while contributions of appreciated property remain limited to 30% of AGI.

The income tax deduction for a qualified conservation contribution (conservation easement) is generally equal to:

Answer: The reduction in the fair market value of the property caused by the easement restriction

The deduction for a conservation easement equals the difference between the property's fair market value before and after the easement restriction is placed, representing the value donated to the public benefit.

In a grantor Charitable Lead Annuity Trust (grantor CLAT), the tax treatment to the grantor is:

Answer: An upfront income tax deduction for the present value of charitable annuity payments, offset by annual inclusion of trust income in the grantor's taxable income

In a grantor CLAT, the grantor receives an upfront income tax deduction equal to the present value of the charitable lead interest, but must include all trust income in taxable income each year — effectively prepaying future charitable deductions.

Under IRC Section 170(f)(8), written acknowledgment from the charity is required for individual charitable contributions of:

Answer: $250 or more

IRC Section 170(f)(8) requires that donors obtain a contemporaneous written acknowledgment from the charity for any single contribution of $250 or more to substantiate the deduction.

A Type I supporting organization differs from a private foundation primarily because it:

Answer: Is organized to support specified public charities and is treated as a public charity under IRC Section 509(a)(3)

A supporting organization qualifies as a public charity under IRC 509(a)(3) because of its relationship with and support of one or more public charities, exempting it from private foundation rules including excise taxes.

Which of the following describes the 5-year averaging election available for contributions to a 529 college savings plan?

Answer: A donor may contribute up to 5 times the annual gift tax exclusion and elect to treat the contribution as made ratably over 5 years, avoiding gift tax

Under IRC Section 529, a donor may make a lump-sum contribution of up to 5 times the annual exclusion amount ($90,000 in 2024) and elect to treat it as made ratably over 5 years, front-loading the account without triggering gift tax.