CES Charitable Planning & Philanthropy 3

Question 1

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

Accepted Answer

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

Answer

The full fair market value of assets transferred to the trust

Answer

The present value of the income stream to be paid to the non-charitable beneficiary

Answer

Zero, until the charity actually receives the trust assets

Question 2

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)?

Accepted Answer

60% of AGI

Answer

30% of AGI

Answer

50% of AGI

Answer

100% of AGI

Question 3

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

Accepted Answer

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

Answer

The cost basis of the land subject to the easement

Answer

The full fair market value of the property before the easement is imposed

Answer

A flat 30% of the assessed value of the encumbered property

Question 4

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

Accepted 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

Answer

An annual income tax deduction equal to the annuity paid to charity each year, with no ongoing income inclusion

Answer

No income tax deduction, but the grantor is exempt from gift tax on transfers to the trust

Answer

A one-time income tax deduction with no ongoing income tax consequences to the grantor

Question 5

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

Accepted Answer

$250 or more

Answer

Any amount

Answer

$500 or more

Answer

$1,000 or more

Question 6

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

Accepted Answer

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

Answer

Is exempt from the 5% annual distribution requirement that applies to private foundations

Answer

Is prohibited from receiving contributions from corporate donors

Answer

Is exempt from all federal income and excise taxes

Question 7

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

Accepted 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

Answer

A donor may deduct contributions to a 529 plan over 5 years for income tax purposes

Answer

A 529 plan beneficiary may receive tax-free distributions over 5 years regardless of qualified expenses

Answer

A 529 plan must be funded over at least 5 years to qualify for the estate tax exclusion