CFRE EVALUATION EXAM 2026.pdf 1. Document information

CFRE EVALUATION EXAM 2026/2027 QUESTIONS AND
SOLUTIONS RATED A+
✔✔Who is the target CLT donor? - ✔✔1. Donor who wants to pass specific property
2. With high growth potential for family
3. With low gift or estate tax
4. Typically $1MM +

✔✔How do you implement a CLT? - ✔✔1. Draft trust documents
2. Donor transfers cash or property to trust
3. Trust makes regular payments to charity
4. Asset passes to donor or family

✔✔Grantor CLT v Family CLT - ✔✔GRANTOR FAMILY
Income Tax Deduction: YES NO
Donor taxed on Income YES NO
Remainder to ? DONOR FAMILY

✔✔Life Estate Reserved - ✔✔1. Donor gifts property to charity
2. Donor retains right to use or live on property for lifetime
3. Donor receives a current tax benefit

✔✔What are the benefits of Life Estate? - ✔✔1. Gift to charity
2. Charitable income tax deduction
3. Right to use or live on property for lifetime

✔✔Who is the target donor of Life Estate? - ✔✔1. Older donor
2. Enough liquid assets for living expenses
3. Donor who wants current income tax deduction

✔✔How do you implement the Life Estate? - ✔✔1. Donor executes deed transferring
property to charity
2. Donor reserves life estate
3. Donor executes a MIT agreement: maintenance, insurance and taxes
4. At donor's death, asset passes to charity

✔✔What is a Pooled income Fund (PIF)? - ✔✔1. Donor gifts cash or stock to charity
2. Charity invests gift in fund with other gifts
3. Charity pays proportionate share of earnings to donor
4. Charity receives remainder at donor's death

✔✔What are the benefits of PIF? - ✔✔1. Gift to charity
2. Charitable income tax deduction
3. Bypass capital gain
4. Increased income

,✔✔Who is the PIF target donor? - ✔✔1. Wants tax deduction
2. Wants income stream
3. Willing to give principal to charity

✔✔how to implement PIF? - ✔✔1. Donor transfers cash or property to fund
2. Charity invests fund
3. Charity pays proportionate income to donor
4. Charity receives remainder

✔✔what is a Bargain Sale? - ✔✔1. Charity buys property for less than FMV
2. Donor gets income tax deduction for the difference between FMV and sale price

✔✔What are the benefits of a bargain sale? - ✔✔1. Donor gets cash in hand
2. Bypass capital gain
3. Charitable deduction

✔✔Who is the target donor for a Bargain Sale? - ✔✔1. Owns appreciated property
2. Wants to give to charity
3. Needs cash or debt relief

✔✔How to implement a Bargain Sale? - ✔✔1. Donor deeds the property to charity
2. Charity pays donor reduced price
3. Donor takes income tax deduction

✔✔Unitrusts - ✔✔Education
Living
Insurance Trust
Unitrust plus term
Retirement Unitrust
Pooled Income Fund
Family & Charity benefit
ALL BIC ---
Bypass capital gain
Increased Income
Chartiable deduction

✔✔Building Endowments - ✔✔1. Bequests
2. Charitable Trusts
3. Bequest of IRA
4. Donor Advised Funds
5. Supporting Organizations
6. Private Foundations

✔✔Bequest - ✔✔1. Fixed amount

, 2. Specific property
3. Percent of residuary
4. Contingent

✔✔Bequest of IRA - ✔✔1. Bypass income tax
2. Bypass estate tax
3. All or % or IRA
4. Beneficiary designation

✔✔DAF - ✔✔1. Gift of cash or property
2. Public Charity manages fund
3. Donor or family recommends
4. Public charity must approve

✔✔Supporting Organization - ✔✔1. Public charity status
2. Controlled by type
3. For the benefit of type
4. In connection with tupe
5. Family participation

✔✔Private Foundation - ✔✔1. Flexible grants
2. family control
3. Excise tax
4. Private foundations prohibitions
5. Expenditure responsibility
6. Longevity challenges

✔✔Manage Endowments - ✔✔1. Endowments v Reserves
2. Investment responsibility
3. Total return concept
4. Charitable distributions
5. Restricted funds

✔✔Endowment v Reserves - ✔✔Endowment is:
Long term - equities
principal preserved
Total return investment
5% typically spent
Reserves is:
Operations or project
Invade principal
Short term investment
Spend as needed

✔✔Investment Responsibility - ✔✔1. Conservation of assets