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GiftLaw Pro Home   >  Chapter 3 - Deferred Gifts  >  3.1 Annuity Remainder Trust  >  3.1.10 Income, Gift, Estate and GSTT  >  Basic Quiz

Basic Quiz - 3.1.10 Income, Gift, Estate and GSTT

1. A charitable remainder trust is always exempt from income taxes.
           
2. If a donor creates a trust for himself or herself and another person and the donor retains the right to revoke the income stream for the other person, that right of revocation is exercisable only during life.
           
3. If the donor transfers an ongoing trade or business into a charitable remainder trust, the trust loses its tax exempt status.
           
4. If a donor creates a trust for his or her life with remainder to charity, the trust corpus will not be included in the donor's estate.
           
5. If a donor creates a trust for self and spouse, plus a term of years for a child, only the income stream to the child is taxable to the donor's estate if the donor retains a testamentary right of revocation.
           
6. Estate taxes can be paid from a charitable remainder trust.
           
7. If a donor has a provision in his or her living trust or will creating a charitable remainder annuity trust, there should be language in the living trust or will that states that estate taxes will not be paid from the charitable remainder trust.
           
8. If a donor makes a gift to a grandchild, that gift may be subject to both gift taxes and generation skipping taxes.
           
9. If a donor makes an outright gift to a grandchild, the donor may use his or her annual exclusion and also the generation skipping transfer tax exemption.
           
10. If a donor makes a gift that is payable to both children and grandchildren, it may be possible that the gift to the children would need to be covered by the generation skipping transfer tax exemption.