4.7.4 Basic Quiz -- Gift of Personal Residence or Farm

A donor who owns her home outright may receive a charitable income tax deduction for the transfer of an income interest in her residence.

True False

For life estate arrangements, the lower the applicable federal rate (AFR), the higher the charitable tax deduction.

True False

The gift of a remainder interest is accomplished by creating a trust and transferring a deed into that trust.

True False

A personal residence is defined as a principal residence that is owned and used by an individual in two of the past five years.

True False

The term farm is defined as property used for production of crops or grazing land for cattle.

True False

A gift of a remainder interest in a home or farm by an individual under the age of 35 will fail to qualify for a charitable income tax deduction because of the 10% minimum deduction test.

True False

Pursuant to the partial interest rules, a gift of a remainder interest to charity must be the entire remainder interest.

True False

The reservation of a life estate can be made only for the donor or only for the donor and the donor's spouse.

True False

A donor may retain a term of years life estate in a home or farm.

True False

Donors who wish to give only a partial interest in their property to charity (as opposed to their entire interest) subject themselves to more stringent rules and risk receiving no charitable deduction whatsoever.