4.10.4 Basic Quiz -- Sale and Unitrust

A FLIP unitrust and a net income plus makeup charitable remainder unitrust (NIMCRUT) are identical trusts that are referred to by different names.

True False

The only types of unitrust that can be funded with illiquid assets are FLIP unitrusts and NIMCRUTs.

True False

A FLIP unitrust always pays the lesser of the unitrust's net income or fixed unitrust percentage.

True False

A NICRUT always pays the lesser of the unitrust's net income or fixed unitrust percentage.

True False

Any date or event can be chosen as the "trigger date" for a FLIP unitrust.

True False

Before the "trigger date" a FLIP unitrust does not make any distributions to its beneficiaries.

True False

The CRUT will usually be invested 40% in bonds and 60% in equities.

True False

After the change of income or "FLIP" date, a FLIP unitrust makes standard unitrust distributions to its beneficiaries regardless of trust income.

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.

True False

Distributions from a FLIP unitrust are all ordinary income to the recipient.