Sunday, May 5, 2024
Charitable Deduction Methods

6.2.1 Basic Quiz -- Annuity Trust for a Life or Lives
A charitable remainder annuity trust (CRAT) may be created for the length of one person's life or the lives of two or more persons.
     True      False
A donor may not include a clause in the CRAT document that allows for the early termination of the trust upon a specific event.
     True      False
A CRAT must pay a minimum of 5% of the initial net fair market value of all of the property used to fund the trust.
     True      False
A donor may create a CRAT with a payout percentage of 55% of the initial fair market value of the property used to fund the trust.
     True      False
If a donor creates a CRAT and there is a 4% possibility that the trust corpus will be exhausted based on the donor's projected life expectancy, the charitable deduction will be denied.
     True      False
It is possible for a donor to create a CRAT for the lesser of a life or a term of years.
     True      False
Jane created a CRAT with $10,000 and a payout rate of 6%. Jane will receive an annual payment of $600.
     True      False
IRS Pub. 1457 contains tables used to determine the annuity factor for a single life.
     True      False
It is permissible to create a CRAT for the longer of a life or a term of years.
     True      False
A CRAT with a guaranteed number of years precludes the marital deduction if one spouse passes away prior to the expiration of the guaranteed number of years.
     True      False



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