STEP Charitable Planning & Philanthropy 2

Question 1

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

Accepted Answer

70½

Answer

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.

Question 2

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?

Accepted Answer

Charitable Lead Annuity Trust (CLAT)

Answer

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.

Question 3

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

Accepted Answer

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

Answer

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.

Question 4

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

Accepted Answer

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

Answer

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.

Question 5

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

Accepted Answer

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

Answer

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.

(STEP) Society of Trust and Estate Practitioners Certification Practice Test

(STEP) Society of Trust and Estate Practitioners Certification Practice Test

STEP Charitable Planning & Philanthropy 2