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1. The deduction for a lead trust is equal to the present value of the lead trust payments to charity.

True False

2. The lead annuity trust pays a fixed payment to charity each year for the term of the trust.

True False

3. The higher the Applicable Federal Rate used to calculate the lead trust deduction, the higher the deduction will be.

True False

4. With a charitable lead trust, you must use the current month's Applicable Federal Rate.

True False

5. A family, or non-grantor, lead trust produces a gift or estate tax deduction.

True False

6. A lead trust may be written for lives, a term of years, or the lesser of lives or a term of years.

True False

7. The standard mortality tables are always used when calculating the taxable transfer amount of a lead trust.

True False

8. To have a qualified charitable lead trust, the deduction must be at least 10% of the trust funding amount.

True False

9. If gift tax is owed when creating a lead trust, it need not be paid until the trust property is distributed to the family.

True False

10. The donor may apply any unused applicable lifetime exemption to the amount subject to gift tax.

True False

Basic Quiz - 3.5.6 Gift/Estate Tax Deductions for Lead Trust