Saturday, May 4, 2024
Deferred Gifts

3.5.7 Basic Quiz -- Lead Trust Income Taxation
A lead trust can be a grantor lead trust or a non-grantor lead trust.
     True      False
With a grantor lead trust, the trust income is taxable to the donor. However, the payments made to charity are not taxable to the donor.
     True      False
If the trust is a non-grantor lead trust, the trust itself is the taxable entity.
     True      False
Because a lead trust is a taxable trust, it does not matter if there is unrelated business taxable income in the trust.
     True      False
Securities are good assets for funding living lead trusts.
     True      False
It is desirable to sell highly appreciated assets within a living lead trust and invest in a diversified portfolio.
     True      False
Any appreciation in the assets held by the non-grantor lead trust is passed to family at the end of the trust without any further gift or estate tax.
     True      False
Typically, the payment frequency from a lead trust is annual.
     True      False
If the lead trust is established during the life of the donor, the assets transferred to the lead trust receive a step up in basis.
     True      False
With a testamentary lead trust, assets can be sold and the trust can diversify without any of the trust principal being lost to capital gains tax.
     True      False



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