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 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.

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

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.

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 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.

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

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.

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

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.

(CES) Certified Estate and Trust Specialist Practice Test

(CES) Certified Estate and Trust Specialist Practice Test

CES Charitable Planning & Philanthropy 3