Monday, May 6, 2024
Taxation and Giving

1.4.5 Basic Quiz -- Lead Unitrust GSTT
Charitable lead trusts are excellent vehicles to benefit grandchildren while minimizing transfer taxes.
     True      False
With a charitable lead unitrust (CLUT), the applicable fraction (and therefore the inclusion ratio) is computed at the termination of the trust.
     True      False
If the trust return is greater than the trust payout, a charitable lead unitrust (CLUT) will distribute more value to family than a charitable lead annuity trust (CLAT).
     True      False
With a CLAT, the GSTT applicable fraction (and therefore the inclusion ratio) is computed at the creation of the trust.
     True      False
The allocation of GSTT exemption to a CLAT is a straightforward process at the creation of the trust.
     True      False
A charitable lead trust (CLT) for grandchildren (or children) gives an example of a taxable distribution.
     True      False
A taxable termination only occurs when a trust loses its tax-exempt status.
     True      False
In the case of a taxable termination, the trustee shall pay the GSTT due.
     True      False
A charitable lead trust produces the highest charitable deduction when used in conjunction with the highest applicable federal rate (AFR or rate of the month).
     True      False
An excellent way to get a "double discount" is to combine a FLP or LLC with a charitable lead trust.
     True      False



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