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GiftLaw Pro Home   >  Chapter 4 - Specific Property Gifts  >  4.7 Land and Buildings  >  4.7.5 Charitable Remainder Trusts  >  Basic Quiz

Basic Quiz - 4.7.5 Charitable Remainder Trusts

1. During a sale and unitrust combination, it is extremely important that the donor transfer the real estate into the trust prior to the sale to a new buyer.
           
2. Certain precautions should be taken in order to secure the benefits of the unitrust and sale plan.
           
3. It is not possible for a donor to receive cash and create a charitable remainder unitrust with one piece of real estate.
           
4. A donor who desires maximum cash withdrawal and zero tax liability should choose the sale and unitrust combination plan.
           
5. Pursuant to the tax code, a sale and unitrust plan must combine a one- or two-life unitrust with the sale only.
           
6. Because a charitable remainder unitrust is involved in the transaction, the donor will be able to bypass all of the gain on the appreciated real estate.
           
7. For donors who wish to downsize from their current larger home to a smaller home, the sale and unitrust option can produce a zero tax sale with significant cash retained by the donors.
           
8. An advantage to a unitrust and sale plan funded with a home is that the donors may live in the home until the home is sold.
           
9. The home exclusion allows an individual to exclude $250,000 of gain from the sale of a principal residence. In the case of spouses, the home exclusion allows for a $500,000 exclusion of gain from a sale of their principal residence.
           
10. A charitable remainder unitrust is an ideal solution where a donor is financially unable to contribute all of the real estate.