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GiftLaw Pro Home   >  Chapter 4 - Specific Property Gifts  >  4.10 Proprietorships  >  4.10.2 Lease and Debt Solutions  >  Basic Quiz

Basic Quiz - 4.10.2 Lease and Debt Solutions

1. An operating sole proprietorship may be transferred to a charitable remainder trust.
           
2. Unrelated business income (UBI) is any income generated by an active trade or business that is not substantially related to a charity's tax-exempt purpose.
           
3. A charity that usually does not pay income tax is required to pay tax on its UBI.
           
4. A charitable remainder trust (CRT) will not lose its tax-exempt status if it has UBI.
           
5. Lease payments that are dependent upon business earnings and profits are UBI when received by a charity.
           
6. Lease payments that are fixed and not dependent upon business earnings and profits are UBI when received by a charity.
           
7. Income generated by a mortgaged asset is generally UBI.
           
8. A charitable remainder trust may generally own mortgaged property.
           
9. There are many strategies for removing debt from property before giving the property to charity.
           
10. Non-recourse debt is a loan that is secured by some sort of collateral, usually property.