4.14.7 Basic Quiz -- Lease UBI Solution

A charitable remainder trust will not lose its tax exempt status if it receives income that is generated by an "active trade or business."

True False

If an S corporation contributes assets to a charitable remainder unitrust, the income generated by those assets is passive income.

True False

Rents and royalties are unrelated business income (UBI) when received by a charitable remainder trust.

True False

Lease payments that are fixed and not dependent upon a businesses earnings and profits are unrelated business income when received by a charity.

True False

Lease payments that are dependent upon a business' earnings and profits are unrelated business income when received by a charity.

True False

To avoid UBI, an S corporation may lease its assets to a third party prior to contributing those assets to charity or to a charitable remainder trust.

True False

It does not matter who leases assets from an S corporation prior to the S corporation contributing those assets to a charitable remainder trust.

True False

When using the lease UBI solution, a long term lease is best.

True False

An S corporation may be subject to passive income limitations.

True False

S corporation stock can be contributed to a charitable remainder trust if someone leases the stock before the shareholder contributes it to the trust.