3.4.6 Basic Quiz -- IRA to Testamentary Gift Annuity

Beneficiaries do not pay income tax when they receive a decedent's IRA.

True False

The most effective way to leave an IRA to a testamentary charitable gift annuity is to make sure that a provision in the will directs that the IRA pass to the appropriate charity.

True False

Naming a charity, a charitable remainder trust or a charitable gift annuity as the beneficiary of an IRA causes the minimum required distributions to be increased during the donor's lifetime because a charity is not an individual with a life expectancy.

True False

An IRA to testamentary gift annuity can provide some very nice advantages when compared to an IRA to testamentary unitrust.

True False

Using an IRA to fund a testamentary gift annuity for a surviving spouse is an estate tax-free transfer.

True False

An IRA that passes to a testamentary gift annuity to benefit children or siblings is not subject to estate tax because a charity is the ultimate beneficiary of the IRA.

True False

After an IRA is transferred in exchange for a testamentary gift annuity, the estate will nevertheless have to realize and pay income tax on the IRA because it is an IRD asset (income with respect of a decedent).

True False

In most cases, a testamentary gift annuity funded with an IRA will pay out some ordinary income and some tax-free income.

True False

It is not permissible to leave a portion or percentage of an IRA to a testamentary gift annuity. In fact, it must be done either in whole or not at all because of the complex IRA distribution rules.

True False

An IRA to testamentary deferred charitable gift annuity may provide many of the same positive benefits that an IRA to testamentary charitable gift annuity furnishes.