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1. Charitable remainder trusts may own S corporation stock.

True False

2. The "option grant strategy" is a way to use S corporations to produce more income for their owners.

True False

3. When an S corporation shareholder grants a charity an option to buy S corporation stock, he may immediately deduct the value of that option.

True False

4. The option grant strategy was once used by a number of attorneys.

True False

5. All S corporation income is unrelated business income ("UBI") when received by a charity.

True False

6. The goal of the "option grant strategy" is to "give" S corporation stock to charity without the charity ever actually owning the stock.

True False

7. The IRS approves of the option grant strategy.

True False

8. Generally, only aggressive taxpayers use the option grant strategy.

True False

9. A private letter ruling is binding authority.

True False

10. The Tax Court can overrule a decision by the IRS.

True False

Basic Quiz - 4.14.4 Option Grant Strategy