Thursday, May 2, 2024
Charitable Deduction Methods

6.1.1 Basic Quiz -- Present Values
The term "present value" means the value of a current gift in future years.
     True      False
Calculating the present value is determined by taking the future value of property and discounting it by an assumed interest rate for a projected period of time.
     True      False
The future value of a remainder interest in a lifetime charitable remainder trust is dependent on the number of years the donor lives.
     True      False
Present values may be used to determine the amount to be set aside today to achieve a desired gift in future years.
     True      False
Johnny has created a will in which he leaves $1 million to Music for the Ages, an exempt organization. Music for the Ages would like to know the present value of the gift in order to honor Johnny for his generous contribution. A future to present value calculation would achieve the desired result.
     True      False
Johnny has created a one-life charitable remainder unitrust with Music for the Ages funding it with $100,000. Music for the Ages would like to determine the present value of the remainder interest. To determine the present value, Music for the Ages will need to know Johnny's life expectancy.
     True      False
Miles has created a 15-year term of years charitable remainder unitrust (CRUT) with Percussionist Protectors, a qualified charity. To determine the future value of the remainder interest in Miles' $200,000 CRUT, Percussionist Protectors must determine Miles' life expectancy.
     True      False
Miles contributed $1,000 to a qualified charity. The present value of this donation is $1,000.
     True      False
The term "discount rate" is often used instead of "interest rate" to denote the lowering effect of future to present value calculations.
     True      False
Present to future value calculations assume that interest rates remain constant.
     True      False



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