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Charitable Giving and Estate Planning

Description: This quiz covers the topic of Charitable Giving and Estate Planning, including the various types of charitable gifts, the tax implications of charitable giving, and the different estate planning techniques that can be used to maximize charitable giving.
Number of Questions: 15
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Tags: charitable giving estate planning tax implications estate planning techniques
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Which of the following is NOT a type of charitable gift?

  1. Outright gift

  2. Charitable remainder trust

  3. Charitable lead trust

  4. Pooled income fund

Show answer
Correct Option: D
Explanation:

A pooled income fund is a type of investment vehicle that allows multiple donors to pool their assets and receive a stream of income for life. The assets in the fund are eventually distributed to the charity.

What is the maximum amount of money that an individual can deduct for charitable contributions in a given year?

  1. 50% of AGI

  2. 30% of AGI

  3. 20% of AGI

  4. 10% of AGI

Show answer
Correct Option: A
Explanation:

The maximum amount of money that an individual can deduct for charitable contributions in a given year is 50% of their adjusted gross income (AGI).

Which of the following is NOT a tax benefit of charitable giving?

  1. Deduction for charitable contributions

  2. Capital gains exclusion for gifts of appreciated property

  3. Estate tax deduction for charitable bequests

  4. Gift tax deduction for charitable gifts

Show answer
Correct Option: D
Explanation:

There is no gift tax deduction for charitable gifts. However, there is a gift tax exclusion for gifts of up to $15,000 per year to any individual, including charities.

What is a charitable remainder trust?

  1. A trust that pays income to the donor for life and then distributes the remainder to charity

  2. A trust that pays income to charity for life and then distributes the remainder to the donor

  3. A trust that pays income to the donor and charity for life and then distributes the remainder to the donor's heirs

  4. A trust that pays income to the donor and charity for life and then distributes the remainder to the charity's heirs

Show answer
Correct Option: A
Explanation:

A charitable remainder trust is a trust that pays income to the donor for life and then distributes the remainder to charity. The donor receives a charitable deduction for the value of the remainder interest.

What is a charitable lead trust?

  1. A trust that pays income to charity for life and then distributes the remainder to the donor

  2. A trust that pays income to the donor for life and then distributes the remainder to charity

  3. A trust that pays income to the donor and charity for life and then distributes the remainder to the donor's heirs

  4. A trust that pays income to the donor and charity for life and then distributes the remainder to the charity's heirs

Show answer
Correct Option: A
Explanation:

A charitable lead trust is a trust that pays income to charity for life and then distributes the remainder to the donor. The donor receives a charitable deduction for the value of the income interest.

What is a pooled income fund?

  1. A type of investment vehicle that allows multiple donors to pool their assets and receive a stream of income for life

  2. A type of trust that pays income to the donor for life and then distributes the remainder to charity

  3. A type of trust that pays income to charity for life and then distributes the remainder to the donor

  4. A type of trust that pays income to the donor and charity for life and then distributes the remainder to the donor's heirs

Show answer
Correct Option: A
Explanation:

A pooled income fund is a type of investment vehicle that allows multiple donors to pool their assets and receive a stream of income for life. The assets in the fund are eventually distributed to the charity.

What is an estate tax?

  1. A tax on the value of an individual's estate at death

  2. A tax on the value of an individual's gifts during life

  3. A tax on the value of an individual's income during life

  4. A tax on the value of an individual's property during life

Show answer
Correct Option: A
Explanation:

An estate tax is a tax on the value of an individual's estate at death.

What is the federal estate tax rate?

  1. 40%

  2. 35%

  3. 30%

  4. 25%

Show answer
Correct Option: A
Explanation:

The federal estate tax rate is 40%.

What is the estate tax exemption?

  1. $12.06 million

  2. $11.7 million

  3. $11.4 million

  4. $11.1 million

Show answer
Correct Option: A
Explanation:

The estate tax exemption is $12.06 million.

What is a charitable bequest?

  1. A gift of money or property to charity in a will

  2. A gift of money or property to charity during life

  3. A gift of money or property to charity in a trust

  4. A gift of money or property to charity in a pooled income fund

Show answer
Correct Option: A
Explanation:

A charitable bequest is a gift of money or property to charity in a will.

What is a charitable remainder annuity trust?

  1. A trust that pays a fixed amount of money to the donor for life and then distributes the remainder to charity

  2. A trust that pays a fixed amount of money to charity for life and then distributes the remainder to the donor

  3. A trust that pays a fixed amount of money to the donor and charity for life and then distributes the remainder to the donor's heirs

  4. A trust that pays a fixed amount of money to the donor and charity for life and then distributes the remainder to the charity's heirs

Show answer
Correct Option: A
Explanation:

A charitable remainder annuity trust is a trust that pays a fixed amount of money to the donor for life and then distributes the remainder to charity. The donor receives a charitable deduction for the value of the remainder interest.

What is a charitable remainder unitrust?

  1. A trust that pays a fixed percentage of the trust's assets to the donor for life and then distributes the remainder to charity

  2. A trust that pays a fixed percentage of the trust's assets to charity for life and then distributes the remainder to the donor

  3. A trust that pays a fixed percentage of the trust's assets to the donor and charity for life and then distributes the remainder to the donor's heirs

  4. A trust that pays a fixed percentage of the trust's assets to the donor and charity for life and then distributes the remainder to the charity's heirs

Show answer
Correct Option: A
Explanation:

A charitable remainder unitrust is a trust that pays a fixed percentage of the trust's assets to the donor for life and then distributes the remainder to charity. The donor receives a charitable deduction for the value of the remainder interest.

What is a qualified charitable distribution?

  1. A distribution from an IRA or other retirement account to a charity

  2. A distribution from a trust to a charity

  3. A distribution from a pooled income fund to a charity

  4. A distribution from a charitable remainder trust to a charity

Show answer
Correct Option: A
Explanation:

A qualified charitable distribution is a distribution from an IRA or other retirement account to a charity. The distribution is not subject to income tax.

What is a donor advised fund?

  1. A type of charitable fund that allows donors to make contributions to the fund and then recommend grants to charities

  2. A type of trust that allows donors to make contributions to the trust and then receive a stream of income for life

  3. A type of pooled income fund that allows donors to make contributions to the fund and then receive a stream of income for life

  4. A type of charitable remainder trust that allows donors to make contributions to the trust and then receive a stream of income for life

Show answer
Correct Option: A
Explanation:

A donor advised fund is a type of charitable fund that allows donors to make contributions to the fund and then recommend grants to charities. The donor receives a charitable deduction for the value of the contribution.

What is a private foundation?

  1. A type of charitable organization that is established by a single donor or a small group of donors

  2. A type of charitable organization that is established by a government agency

  3. A type of charitable organization that is established by a religious organization

  4. A type of charitable organization that is established by a corporation

Show answer
Correct Option: A
Explanation:

A private foundation is a type of charitable organization that is established by a single donor or a small group of donors.

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