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GiftLaw Pro Home   >  Chapter 4 - Specific Property Gifts  >  4.14 Subchapter S Corporations  >  4.14.7 Lease UBI Solution  >  Basic Quiz

Basic Quiz - 4.14.7 Lease UBI Solution

1. A charitable remainder trust will not lose its tax exempt status if it receives income that is generated by an "active trade or business."
           
2. If an S corporation contributes assets to a charitable remainder unitrust, the income generated by those assets is passive income.
           
3. Rents and royalties are unrelated business income (UBI) when received by a charitable remainder trust.
           
4. Lease payments that are fixed and not dependent upon a businesses earnings and profits are unrelated business income when received by a charity.
           
5. Lease payments that are dependent upon a business' earnings and profits are unrelated business income when received by a charity.
           
6. To avoid UBI, an S corporation may lease its assets to a third party prior to contributing those assets to charity or to a charitable remainder trust.
           
7. It does not matter who leases assets from an S corporation prior to the S corporation contributing those assets to a charitable remainder trust.
           
8. When using the lease UBI solution, a long term lease is best.
           
9. An S corporation may be subject to passive income limitations.
           
10. S corporation stock can be contributed to a charitable remainder trust if someone leases the stock before the shareholder contributes it to the trust.