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1. A charitable lead trust in which a reversionary interest in the corpus is given to the grantor and such interest exceeds 5% of the corpus is a grantor lead trust (GLT).

True False

2. Any income or gain made in a GLT is taxable to the grantor.

True False

3. The grantor of a GLT does not receive a charitable deduction.

True False

4. Distributions from a GLT are considered made to the charity and any deduction for such distributions is limited to 50% of the grantor's adjusted gross income (AGI).

True False

5. If a GLT recognizes gain, the grantor is not taxed on that gain until the trust reverts.

True False

6. The highest applicable federal rate (AFR) available should be selected when creating a GLT.

True False

7. If a GLT invests in municipal bonds, the grantor nevertheless is subject to tax on the bond payments.

True False

8. The grantor is taxed at capital gains rates if a GLT is funded with appreciated stock.

True False

9. A portion of the sale of appreciated stock in a GLT may not be subject to taxation.

True False

10. The typical donor who creates a GLT is a person in the top income tax bracket.

True False

Basic Quiz - 6.4.1 Living Grantor Lead Trust