Question 1

A carryover of charitable contributions may be carried forward for _____ years.&#10;A)One.&#10;B)Three.&#10;C)Five.&#10;D)Unlimited.

Accepted Answer

Charitable contributions that exceed the annual deduction limit can be carried forward for up to five years.

Question 2

A _____ permits annual direct transfers of required minimum distributions (RMDs)and other taxable distributions to a qualified charity from an IRA,up to $100,000.&#10;A)Qualified Charitable Distribution.&#10;B)Qualified Charitable Lead.&#10;C)Qualified Charitable Unit.&#10;D)Qualified Net Income Makeup.

Accepted Answer

The correct term for this arrangement is a Qualified Charitable Distribution (QCD). It allows individuals who are age 70½ or older to transfer up to $100,000 per year from an IRA directly to a qualified charity without incurring income tax on the distribution. A QCD counts towards the required minimum distributions (RMDs) for the year, and can be a tax-efficient way to support a favorite charity. B, C, and D are not relevant to this concept.

Question 3

Which of the following entities allows the donor to gift variable annual payments to a charity for a period of time?&#10;A)Charitable Lead Annuity Trust.&#10;B)Charitable Lead Unitrust.&#10;C)Charitable Remainder Trust.&#10;D)Qualified Charitable Distribution Trust.

Accepted Answer

A Charitable Lead Unitrust allows the donor to gift variable annual payments to a charity for a period of time. A Charitable Lead Annuity Trust provides fixed annual payments to a charity, while a Charitable Remainder Trust allows the donor to receive income for a period of time before the assets transfer to the charity. A Qualified Charitable Distribution Trust is not a recognized entity.

Question 4

Capital assets include all of the following except:&#10;A)Bonds.&#10;B)Jewelry.&#10;C)Manuscripts.&#10;D)Stamp collection.

Accepted Answer

The answer of Capital assets include all of the following...

Question 5

A donor-advised fund may be operated by a _____&#10;A)Donor.&#10;B)Community foundation.&#10;C)Non-public charity.&#10;D)Wealth Replacement Trust.

Accepted Answer

Donor-advised funds are typically operated by community foundations or other public charities. While the donor has control over the funds and makes recommendations for disbursements, the community foundation or public charity ultimately manages the fund and is responsible for ensuring that grants made from the fund are made to other charitable organizations. Non-public charities and wealth replacement trusts are not typically involved in the operation of donor-advised funds.

Question 6

A carryover of a qualified conservation contribution may be carried forward for _____ years.&#10;A)One.&#10;B)Five.&#10;C)Fifteen.&#10;D)Twenty.

Accepted Answer

A carryover of a qualified conservation contribution may be carried forward for fifteen years.

Question 7

A trust is permitted a/an _____ deduction for charitable contributions up to its gross income.&#10;A)20 percent.&#10;B)30 percent.&#10;C)50 percent.&#10;D)Unlimited

Accepted Answer

Trusts are allowed an unlimited deduction for charitable contributions, as long as they are made according to the terms of the trust and up to the amount of its gross income.

Question 8

Which of the following statements regarding qualified charitable distributions is false?&#10;A)It satisfies the required minimum distributions for the year in which a QCD is made.&#10;B)Correct,this statement is false.IRA account owners must be age 67 or older.&#10;C)Transfers from an inherited IRA are not allowed.&#10;D)Maximum transfer amount is $100,000.

Accepted Answer

The requirement for a QCD is being age 70 1/2 or older, not 67.

Deck 6: Charitable Gift Planning Basics