Charitable Income Limitations

14 Questions

Settings
Please wait...
Charitable Income Limitations

This quiz is part of the introductory curriculum for the graduate course Personal Financial Planning 5325 "Introduction to Charitable Planning" from Texas Tech University. For free downloads of the audio lectures and PowerPoint slides for this course, or to learn about the online Graduate Certificate in Charitable Financial Planning at Texas Tech University, go to www. EncourageGenerosity. Com


Related Topics
Questions and Answers
  • 1. 
    With regard to income limitations on deductible giving, all of the following property is treated about the same EXCEPT for
    • A. 

      Ordinary income property

    • B. 

      Short term capital gains

    • C. 

      Inventory

    • D. 

      Cash

    • E. 

      Long-term capital gains

  • 2. 
    What is the income limit for deductible giving for long-term capital gain property to a public charity deducted at current fair market value
    • A. 

      50%

    • B. 

      30%

    • C. 

      20%

    • D. 

      10%

    • E. 

      Either 30% or 50%

  • 3. 
    If I make a “special election” to increase the income percentage limit for long-term capital gain property gifts made to charity, what must I give up?
    • A. 

      I must give up the ability to deduct my cost basis

    • B. 

      I must give up the ability to deduct my appreciation

    • C. 

      I must give up the ability to deduct my depreciation

    • D. 

      I must give up the ability to deduct my long-term capital gain property gifts

    • E. 

      I must give up the ability to deduct my ordinary income gifts

  • 4. 
    What is the income limit for deductible giving for long-term capital gain property given to a private foundation by a C-corporation?
    • A. 

      50%

    • B. 

      30%

    • C. 

      20%

    • D. 

      10%

    • E. 

      Either 30% or 50% depending on the special election choice

  • 5. 
    Examples of property given “for the use of” charity thereby triggering a 30% income giving limitation includes the following
    • A. 

      Both paying premiums to a life insurance company for a charity owned policy AND putting money into a charitable lead trust

    • B. 

      Both putting money into a charitable remainder trust AND putting money into a charitable gift annuity

    • C. 

      Both paying premiums to a life insurance company for a charity owned policy AND paying money to a charity with the instruction that the charity use the money to pay premiums on a charity owned policy

    • D. 

      Loaning a charity $10,000 which you expect to be repaid without interest

    • E. 

      Giving an automobile to a charity which its employees will drive while carrying out charitable efforts

  • 6. 
    An example of “related use” of a personal property item would be
    • A. 

      Giving an automobile to a charity which its employees will drive while carrying out charitable efforts

    • B. 

      Giving a famous modern art painting to a modern art museum which the museum then immediately trades with another museum in order to acquire two modern art sculptures

    • C. 

      Giving a new guitar to the local public television station to be sold in the annual benefit auction

    • D. 

      Giving farm land to an orphanage on which they immediately build a new orphanage

    • E. 

      Giving cash to a charity which it uses to buy supplies

  • 7. 
    Which of the following is a gift subject to the 20% income limitation on deductible giving?
    • A. 

      A gift of an item of appreciated personal property owned over 1 year for “related use” by a private non-operating foundation

    • B. 

      A gift of an item of appreciated personal property owned over 1 year NOT for “related use” by a private non-operating foundation

    • C. 

      A gift of appreciated stock (long-term capital gain) where less than 10% of the company is transferred to a private non-operating foundation

    • D. 

      A gift of appreciated stock (long-term capital gain) of more than 10% of the company given to a private non-operating foundation

    • E. 

      All of the above

  • 8. 
    If you have carryover deductions from cash gifts made to public charities in both 2008 and 2009 and you make additional cash charitable gifts to public charities in 2010.  In what order will these deductions and carryover deductions be used for a tax return in the 2010 tax year?
    • A. 

      1st-2008 gifts, 2nd-2009 gifts, 3rd-2010 gifts

    • B. 

      1st-2010 gifts, 2nd-2008 gifts, 3rd-2009 gifts

    • C. 

      1st-2010 gifts, 2nd-2009 gifts, 3rd-2008 gifts

    • D. 

      1st-2009 gifts, 2nd-2008 gifts, 3rd-2010 gifts

    • E. 

      1st-2008 gifts, 2nd-2010 gifts, 3rd-2009 gifts

  • 9. 
    Sam has an AGI of $100,000 and makes a gift of $30,000 of appreciated capital gain property to a public charity that he deducts at the fair market value of the property and a gift of $20,000 of appreciated capital gain property to a private (non-operating) foundation that he deducts at the fair market value of the property.  Which of the following income limit categories are exceeded?
    • A. 

      The income limitation applicable to all gifts

    • B. 

      The income limitation applicable to gifts of all capital gain property except “special election” property

    • C. 

      The income limitation applicable to all gifts to private (non-operating) foundations

    • D. 

      The income limitation applicable to gifts of capital gain property to private (non-operating) foundations

    • E. 

      No gift limits are exceeded

  • 10. 
    Sam has an AGI of $100,000 and makes a gift of $10,000 of appreciated capital gain property to a public charity that he deducts at the fair market value of the property, a gift of $20,000 of capital gain property to a private (non-operating) foundation that he deducts at the fair market value of the property, a gift of $10,000 of cash to a private (non-operating) foundation, and a gift of $10,000 cash to a public charity.  Which of the following income limit categories are exceeded?
    • A. 

      The income limitation applicable to all gifts

    • B. 

      The income limitation applicable to gifts of all capital gain property except “special election” property

    • C. 

      The income limitation applicable to all gifts to private (non-operating) foundations

    • D. 

      The income limitation applicable to gifts of capital gain property to private (non-operating) foundations

    • E. 

      No gift limits are exceeded

  • 11. 
    Sam has an AGI of $100,000 and makes a gift of $10,000 of capital gain property to a public charity that he deducts at the fair market value of the property, a gift of $20,000 of capital gain property to a private (non-operating) foundation that he deducts at the fair market value of the property, a gift of $10,000 of cash to a private (non-operating) foundation, and a gift of $20,000 cash to a public charity.  Which of the following income limit categories are exceeded?
    • A. 

      The income limitation applicable to all gifts

    • B. 

      The income limitation applicable to gifts of all capital gain property except “special election” property

    • C. 

      The income limitation applicable to all gifts to private (non-operating) foundations

    • D. 

      The income limitation applicable to gifts of capital gain property to private (non-operating) foundations

    • E. 

      No gift limits are exceeded

  • 12. 
    Sam has an AGI of $100,000 and makes a gift of $55,000 of capital gain property to a private (non-operating) foundation.  Which of the following income limit categories are exceeded?
    • A. 

      The income limitation applicable to all gifts

    • B. 

      The income limitation applicable to gifts of all capital gain property except “special election” property

    • C. 

      The income limitation applicable to all gifts to private (non-operating) foundations

    • D. 

      The income limitation applicable to gifts of capital gain property to private (non-operating) foundations

    • E. 

      All of the above gift limits are exceeded

  • 13. 
    Which of the following types of gifts would get counted first, if the total gifts for the year exceed the limitations?
    • A. 

      Cash to a public charity

    • B. 

      Long-term capital gain property to a public charity (without special election)

    • C. 

      Cash to a private (non-operating) foundation

    • D. 

      Long-term capital gain property to a private (non-operating) foundation

    • E. 

      Short-term capital gain property to a private (non-operating) foundation

  • 14. 
    Thanks for taking the quiz!  The rest of the free online curriculum, including slides and audio lectures, is at www.EncourageGenerosity.com.  Our ability to create and post new curriculum depends on being able to prove that it is actually being used by professionals in nonprofits or financial advising.  It would help us tremendously if you would write your name and the name of your organization below, so that we will have evidence that this product is being used.  Thanks!