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GiftLaw Pro Home   >  Chapter 3 - Deferred Gifts  >  3.7 Life Estate Reserved  >  3.7.3 Life Estate Rollover Options  >  Basic Quiz

Basic Quiz - 3.7.3 Life Estate Rollover Options

1. If a life tenant desires to terminate the life estate arrangement early, one option would be for the life tenant and charity to agree to sell the property to a new buyer.
           
2. With the joint sale option, the donor and the charity negotiate the value of each of their respective ownership interests.
           
3. A donor who sells his or her life estate interest will be able to use the home exclusion to offset any capital gains that may be due upon the sale.
           
4. If a life tenant desires to terminate the life tenant arrangement early, one option is for the donor to make a current gift of his or her life estate interest to charity.
           
5. If a donor decides to transfer his or her life estate interest to charity prior to death, he or she will be entitled to a charitable income tax deduction for the value of the life interest.
           
6. If a life tenant desires to end the life estate arrangement early, it may be possible to transfer the life estate interest to a charitable remainder unitrust.
           
7. If a life tenant desires to end the life estate arrangement early, it should be possible to transfer the life estate interest in exchange for a gift annuity.
           
8. When creating a life estate interest, the donor must decide ahead of time which termination options he or she wants to pursue. This must be recorded on the deed.
           
9. For life estate arrangements, the lower the AFR, the higher the charitable tax deduction.
           
10. When exercising a life estate rollover option, the highest AFR should be used.