section 1 - The American College Online Learning Center

(1) Charity needs only to payout income pursuant to terms of pooled incomefund(2) Donor recourse is lawsuit against charity18. Who bears the inflation risk?a. Charitable remainder annuity trust(1) Fixed payments expose noncharitable beneficiary to inflationb. Charitable remainder unitrust(1) Noncharitable beneficiary not exposed since potential in sharing in anyfuture appreciationc. Charitable gift annuity(1) Fixed payments expose noncharitable beneficiary to inflationd. Pooled-income fund19. Transactional costs(1) Noncharitable beneficiary not exposed since potential for receiving higherincome during inflationary periodsa. CRT — many complexities(1) Trust instrument with opportunity for customization(2) Selection of professional fiduciary as trustee(3) Investment counsel(4) Expense of legal, accounting counselb. CGA — many fewer complexities than CRT(1) Simple multipage contract(2) Lawyers, accountants, financial advisor expense rarely incurredc. PIF — many fewer complexities than CRT(1) Relatively simple paperwork20. Excellent assets for funding life income giftsa. Appreciated publicly traded securitiesb. Unencumbered real estatec. Appreciated publicly traded mutual fundsd. Cash, though appreciated assets are more tax-efficiente. Business interests possible with high level of legal and tax expertise21. Funding the life income gift among assets to avoida. Debt encumbered property(1) Bargain sale issues; UBIT (Unrelated Business Taxable Income) issuesand can disqualify CRTs if donor continues payment of debt.b. Assets donor is obligated to sell(1) Will be treated, under the assignment of income doctrine, as if the donorhad sold it prior to gift; taxable gain to donor, even though asset is in thetrustc. S Corp Stock4.33