4.2.3 Basic Quiz -- Stock Sale with Unitrust

If the donor transfers corporate stock into a CRT after entering into a binding agreement with a seller, the donor will bypass capital gain on the stock.

True False

If a donor transfers stock to a charitable remainder trust after the corporation has entered into a Letter of Intent to sell the corporation, the donor will not bypass capital gains.

True False

If a shareholder transfers stock before the shareholders' vote there will never be a prearranged sale.

True False

If a transfer of stock to a charitable remainder trust has been determined to be a prearranged sale, it will disqualify the trust.

True False

If a charitable remainder trust is desired to avoid capital gains tax on the sale of closely held corporation and negotiations have already commenced, it is best to use a third-party trustee for the CRT.

True False

When selling a corporation using a CRT, it is a good idea to structure the trust as a FLIP trust.

True False

After transferring corporate stock to a charitable remainder trust where negotiations of a sale have already begun, it is best to wait four to eight weeks before the trustee sells the stock.

True False

The charitable deduction resulting from the transfer of appreciated stock is deductible up to 30% of the donor's adjusted gross income.

True False

If a charitable deduction cannot be used up in one year, it can be carried over and used for five additional years.

True False

When a charitable remainder trust is funded with corporate stock, both the unitrust amount and the charitable deduction are calculated based upon the sale price of the stock.