Saturday, May 4, 2024
Charitable Deduction Methods

6.2.2 Basic Quiz -- Annuity Trust for a Term of Years
A charitable remainder annuity trust (CRAT) may be created for a term of up to 25 years.
     True      False
A CRAT trust must pay out a minimum of 5% of the initial net fair market value of the trust at least annually.
     True      False
A CRAT must pay out a minimum percentage, but there is no upper limit.
     True      False
Sec. 664 outlines the method for determining the charitable deduction for a CRAT.
     True      False
The annuity factor for a term of years CRAT can be found in IRS Pub. 1457, Table S.
     True      False
The AFR used when creating a CRAT must be the AFR of the month in which the trust is created.
     True      False
If a payment period other than monthly is selected, an adjustment factor must be applied to the annuity payout factor.
     True      False
To determine the donor's tax savings for creating a CRAT, the donor's tax rate is multiplied by the amount of the charitable tax deduction.
     True      False
To determine the amount of a donor's charitable deduction, the present value of the donor's annuity interest is subtracted from the donor's adjusted gross income.
     True      False
A CRAT must produce a charitable deduction equal to or greater than 10% of the trust's initial fair market value.
     True      False



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