Chapter 9: Charitable Giving

Question 0

Charitable Lead Trust (CLT)

Answer 0

A trust in which a charitable organization receives the income interest and a noncharitable beneficiary receives the remainder interest

Question 1

Capital Gain Property

Answer 1

Property that, when sold, results in either capital gain or Section 1231 gain.

Question 2

Charitable Remainder Annuity Trust (CRAT)

Answer 2

A trust that provides a fixed annuity to the donor (usually for life) for an amount that is greater or equal to 5% of the initial net FMV of the property contributed to the trust. The remainder interest of the trust passes to a named charitable organization.

Question 3

Charitable Remainder Unitrust (CRUT)

Answer 3

A trust that provides a payment to the donor (usually for life) equal to a fixed percentage of the trust assets as valued annually. The remainder interest of the trust passes to a named charitable organization.

Question 4

Net Income with Makeup Charitable Remainder Trust (NIMCRUT)

Answer 4

A CRUT that requires that a fixed percentage (min 5%) of the annual value of trust assets be credited to the income beneficiary, or if less, the net income of the trust for that year, with any deficiencies to be made up in later years when trust income exceeds the required set percentage amounts for such years.

Question 5

Ordinary Income Property

Answer 5

Property that, when sold, results in recognition of ordinary income

Question 6

Pooled Income Funds (PIF)

Answer 6

Donor contributions are pooled in a trust created and maintained by the charity. Each donor receives an allocable share of the income from the trust for his life.

Question 7

Private Foundation

Answer 7

A charitable organization that receives its support from a single individual or family. It can be either a private operating foundation or a private nonoperating foundation.

Question 8

Private Nonoperating Foundation

Answer 8

A charitable organization (private foundation) that does NOT spend at least 85% of its adjusted net income (or min inv return, if less) on activities engaged in for the active conduct of the exempt purpose.

Question 9

Private Operating Foundation

Answer 9

A charitable organization (private foundation) that spends at least 85% of its adjusted net income (or min inv return, if less) on activities engaged in for the active conduct of the exempt purpose.

Question 10

Public Charities

Answer 10

Charitable organizations that receive broad support from the general public

Question 11

Sprinkling Provision

Answer 11

The trustees right to make distributions to the trust beneficiaries at his discretion.

Question 12

Tangible Property

Answer 12

Property that is not realty and may be touched.