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GiftLaw Pro Home   >  Chapter 4 - Specific Property Gifts  >  4.10 Proprietorships  >  4.10.4 Sale and Unitrust  >  Basic Quiz

Basic Quiz - 4.10.4 Sale and Unitrust

1. A FLIP unitrust and a net income plus makeup charitable remainder unitrust (NIMCRUT) are identical trusts that are referred to by different names.
           
2. The only types of unitrust that can be funded with illiquid assets are FLIP unitrusts and NIMCRUTs.
           
3. A FLIP unitrust always pays the lesser of the unitrust's net income or fixed unitrust percentage.
           
4. A NICRUT always pays the lesser of the unitrust's net income or fixed unitrust percentage.
           
5. Any date or event can be chosen as the "trigger date" for a FLIP unitrust.
           
6. Before the "trigger date" a FLIP unitrust does not make any distributions to its beneficiaries.
           
7. The CRUT will usually be invested 40% in bonds and 60% in equities.
           
8. After the change of income or "FLIP" date, a FLIP unitrust makes standard unitrust distributions to its beneficiaries regardless of trust income.
           
9. Despite the wonderful success a unitrust and sale plan can have, certain precautions must be addressed in order to "lock in" the benefits of this plan.
           
10. Distributions from a FLIP unitrust are all ordinary income to the recipient.