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1. A grantor lead trust is a taxable trust.

True False

2. Grantor lead trusts produce an estate tax deduction.

True False

3. The trust, not the donor, is taxable on the income earned by the grantor lead trust.

True False

4. The trust corpus reverts to the grantor at the end of the trust term with a grantor lead trust.

True False

5. If a grantor lead trust pays all income earned to a qualified charity, the grantor will not be taxed on that income.

True False

6. If a donor contributes cash to a grantor lead trust, the income tax deduction is usable for up to 50% of the donor's adjusted gross income.

True False

7. Grantor lead trusts are typically invested in tax-free municipal bonds or capital gain assets.

True False

8. If assets are sold within the grantor lead trust, the donor is taxable on the gain.

True False

9. The reversion to the grantor of trust assets must be greater than 5% for the trust to be considered a grantor lead trust.

True False

10. The deduction for the grantor lead trust may be used to offset ordinary income taxes.

True False

Basic Quiz - 3.5.2 Grantor Lead Trust