3.4.7 Basic Quiz -- Unitrust to Gift Annuity Rollover

As a general rule, gifts of partial interests in property do not qualify for a charitable income tax deduction.

True False

The transfer of a unitrust income stream for a gift annuity is an excellent option for donors who desire another income tax deduction now and a fixed, rather than variable, income stream.

True False

In most situations, it is likely that a donor will not receive more income from converting to a charitable gift annuity than if the donor stayed with the unitrust.

True False

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

True False

If a donor decides to transfer his or her entire unitrust income interest as an outright gift to charity prior to the donor's death, he or she will be entitled to a charitable income tax deduction for the present value of the unitrust income interest.

True False

For charitable remainder unitrusts, the higher the Applicable Federal Rate, the higher the charitable tax deduction.

True False

When transferring an income interest to charity, the lowest Applicable Federal Rate should be used.

True False

The gift of a unitrust income interest to charity will require Form 8283 to be filed and may require an appraisal.

True False

The trust document may contain a provision that allows a donor to make outright distributions of principal to charity prior to termination of the trust.

True False

Because a donor is transferring one asset for another (unitrust income interest for gift annuity) the capital gain element of the unitrust income stream is accelerated at the time of the transfer.