3.11.3 Basic Quiz -- Sale and Unitrust

A charitable remainder unitrust is not an ideal solution where a donor is financially unable to contribute the entire asset.

True False

Assuming a donor has one piece of property, it is not possible for the donor to receive cash and create a charitable remainder unitrust with that one piece of property.

True False

Because a charitable remainder unitrust is involved in the transaction, the donor will be able to bypass all of the gain on the appreciated property.

True False

During a sale and unitrust combination, it is extremely important that the donor transfer the property into the trust prior to the sale to a new buyer.

True False

A donor who desires maximum cash withdrawal and zero tax liability should choose the sale and unitrust combination plan.

True False

Pursuant to the tax code, a sale and unitrust plan must combine a one or two life unitrust with the sale only.

True False

For donors who wish to downsize from their current larger home to a smaller home, the sale and unitrust option can produce a zero tax sale with significant cash retained by the donors.

True False

An advantage to a unitrust and sale plan funded with a home is that the donors may live in the home until the home is sold.

True False

The home exclusion allows an individual to exclude $250,000 of gain from the sale of a principal residence. In the case of spouses, the home exclusion allows for a $500,000 exclusion of gain from a sale of their principal residence.

True False

Despite the wonderful success a unitrust and sale plan can have, certain precautions must be addressed in order to "lock in" the benefits of this plan.