Alphabet Soup
DAF
What is Donor Advised Fund?
True or False: a "planned gift" is only a gift that happens after the donor dies.
False!
When leaving a gift in a will, some donors choose to leave a specific dollar amount while others choose to leave a _______ of their estate.
Percentage or portion
If you have a traditional IRA and you are 73 or older, you must take a RMD each year. RMD stands for what?
Required Minimum Distribution
True or False: a donor can transfer ownership of a life insurance policy to charity.
True
QCD
What is a Qualified Charitable Deduction?
A donor can make a future gift by listing a charity as a _________ of financial or retirement accounts.
"beneficiary"
True or False: an estate with assets held in a revocable living trust will pass to heirs and charities without going through probate court.
True.
True or False: An IRA owner pays ordinary income taxes on the money they withdraw from their IRA.
True
A donor sells real property valued at $1M for a $600K to a charity. Is this a charitable gift?
Yes! This is a bargain sale. The donor may qualify for a charitable tax deduction based on the reduced value of the sale.
CGA
What is a Charitable Gift Annuity?
A donor calls asking for advice on the tax implications of his donation. What do you say?
Consult with a tax advisor.
True or False: Bob updates his will to include a $10,000 gift to charity when he dies. He qualifies for a charitable tax deduction in the year his amends his will.
False. This is a revocable (incomplete) gift.
A son will pay tax on the IRA assets he inherits from his dad at which rate? A) Estate tax rate. B) The son's ordinary income tax rate. C) There is a special rate. D) The dad's last income tax rate.
B) The son's ordinary income tax rate. A non-spouse beneficiary of an IRA pays tax on the money, when withdrawn, at the beneficiary's current income tax rate.
What is an example of a life-income gift?
A charitable gift annuity or a charitable remainder trust.
CRUT
What is a Charitable Remainder Unitrust?
A donor makes a gift of appreciated stocks. He claims a tax deduction for the value of the stocks. He also avoids paying ___________ taxes.
"capital gains"
What's it called? A special trust set up after a donor dies that provides income to her heirs for their lives and then the remainder balance to charity.
A testamentary charitable remainder trust.
Can a donor can make a qualified charitable distribution from their IRA to a donor-advised fund?
No.
A donor irrevocably transfers the deed of her home to charity but retains the right to live in the home for the rest of her life. When can she claim a charitable tax deduction?
The donor qualifies for a tax deduction in the year the deed is transferred for the value of the home minus the value of her retained interest.
CLT
What is a Charitable Lead Trust?
True or False: the type and/or timing of how you pass on assets to your beneficiaries does not matter.
False! Proper planning can maximize the inheritance and charitable gifts you would like to leave.
A single woman dies in 2026 with an estate valued at $20M. How much will be paid in federal estate taxes? Bonus: what is the federal estate tax rate and who pays it?
In 2026, an individual can pass $15M to heirs without federal estate taxes. $5M will be subject to a 40% federal estate tax (=$2M), paid by the estate.
You inherit an IRA from your late mother. How long do you have to take out the balance of the account? A) The year you inherit the fund. 2) 10 years. 3) Your lifetime.
10 years. You used to be able to take distributions over your lifetime, spreading out the taxation of the money. This change created planning options!
A donor says he's heard that he can make a one-time distribution from their IRA to fund a charitable gift annuity and wants to set this up. Is he right?
Yes. There are many special rules about this type of gift.