Charitable Planning & Philanthropy Flashcards

At what minimum age may an IRA owner make a Qualified Charitable Distribution (QCD) directly from the IRA to an eligible charity?

Answer: 70½

Under IRC Section 408(d)(8), an IRA owner who has reached age 70½ may exclude up to $105,000 (indexed) per year from gross income by directing a QCD directly to an eligible charity.

Which type of charitable trust requires the trustee to pay a fixed annuity amount to charity for a specified term, with the remainder passing to non-charitable beneficiaries?

Answer: Charitable Lead Annuity Trust (CLAT)

A Charitable Lead Annuity Trust pays a fixed annuity to one or more charities during the trust term, and at termination the remaining assets pass to the grantor's heirs or other non-charitable beneficiaries.

For a donated conservation easement to qualify for a charitable deduction under IRC Section 170(h), the contributed interest must:

Answer: Be a qualified real property interest exclusively for one of the four enumerated conservation purposes

Section 170(h) requires that the donation be a 'qualified real property interest' (fee simple, remainder, or perpetual restriction) contributed exclusively for conservation purposes such as habitat protection, scenic enjoyment, historic preservation, or open space.

In a Pooled Income Fund, an income beneficiary receives distributions based on:

Answer: A pro-rata share of the fund's actual net income, proportional to the donor's units of participation

Each donor to a Pooled Income Fund receives units of participation, and distributions equal the donor's proportionate share of the fund's actual net income earned each year.

What is the key legal distinction between a Type I and a Type III Supporting Organization under IRC Section 509(a)(3)?

Answer: Type I is operated, supervised, or controlled BY the supported organization; Type III is operated IN CONNECTION WITH the supported organization

The Treasury Regulations classify supporting organizations by the nature of the relationship: Type I (control-by), Type II (supervised or controlled in connection with), and Type III (operated in connection with), each with increasing operational independence from the supported charity.

Unrelated Business Income Tax (UBIT) does NOT apply to which of the following receipts by a tax-exempt organization?

Answer: Royalties received from licensing the organization's trademark or logo to a third party

IRC Section 512(b)(2) specifically excludes royalties (including amounts received for the use of intangible property) from the definition of unrelated business taxable income.

What minimum charitable remainder percentage must be present in a Charitable Remainder Trust at the time of creation for the trust to qualify under IRC Section 664?

Answer: 10%

Under the Section 664 regulations, the actuarially determined present value of the charitable remainder interest must equal at least 10% of the initial net fair market value of all property transferred to the trust.