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GiftLaw Pro Home   >  Chapter 4 - Specific Property Gifts  >  4.8 Partnerships and LLCs  >  4.8.4 Sale and Unitrust  >  Basic Quiz

Basic Quiz - 4.8.4 Sale and Unitrust

1. Typically, purchasers of a business like to buy the company as a whole rather than simply the asset.
           
2. It is allowable for a limited liability company (LLC) to transfer some of its assets into a charitable remainder trust (CRT) and continue to own the remainder of the assets.
           
3. If a partnership transfers a few of its assets to a CRT to sell tax-free, but sells the remainder of its assets outright, the partners may owe some taxes on that sale.
           
4. If a partnership or LLC is contemplating transferring some of its assets to a CRT, the partnership or LLC should be careful to ensure that no active trade or business income is attributable to those assets.
           
5. A donor who transfers a portion of his or her LLC shares into a CRT, can allocate his or her entire basis in the LLC shares to those kept outside of the CRT so that less capital gains tax will be owed.
           
6. In a sale and unitrust transaction, if the charitable deduction is equal to the capital gains tax, then there is a zero-tax transaction.
           
7. If a donor wishes to utilize the sale and unitrust method to achieve a zero-tax scenario, the donor must consider how much of the income tax deduction that he or she can utilize.
           
8. If an LLC wishes to transfer assets into a CRT, it should ensure that there is no debt on those assets.
           
9. Once a CRT receives assets from a partnership or LLC, it can then sell those assets to anyone so long as the sale price is at least fair market value.
           
10. If an LLC owns a parcel of real estate and a public charity would like to purchase that property, a CRT could not be used because a sale to the remainder beneficiary charity is deemed to be an act of self-dealing.