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GiftLaw Pro Home   >  Chapter 3 - Deferred Gifts  >  3.5 Lead Trust  >  3.5.4 Lead Annuity Trust  >  Basic Quiz

Basic Quiz - 3.5.4 Lead Annuity Trust

1. A non-grantor charitable lead annuity trust, where the remainder passes to someone other than the grantor, produces an income tax deduction.
           
2. A charitable lead annuity trust is a tax-exempt trust.
           
3. The payments from most charitable lead annuity trusts to the charity are the same amount for the entire period of the trust.
           
4. The non-grantor charitable lead trust receives a 100% charitable deduction against income earned for all payments made to a qualified charity.
           
5. Because the lead trust is a taxable trust, it does not matter if there is any unrelated business taxable income within the lead trust.
           
6. It is possible to transfer to family approximately four times the taxable gift amount by using the charitable lead annuity trust.
           
7. To produce a higher deduction, it is better to use the lowest Applicable Federal Rate possible.
           
8. With a non-grantor charitable lead annuity trust, the trust income is taxable to the donor.
           
9. If the charitable lead annuity trust does not earn enough income to pay the annuity to charity in a given year, the full annuity trust payment does not have to be made.
           
10. With a non-grantor charitable lead annuity trust, any growth in the trust property will be passed on to the family without any further gift or estate taxes.