Cozbi and Zimri, a married couple, transfer their $1,000,000 home with a $100,000 basis into a charitable remainder annuity trust paying them $50,000 at the end of each twelve month period as long as either one of them is alive. The trustee borrows $100,000 against the home to make improvements to the home in preparation for sale. Within three months of the establishment of the CRT, the house is sold for $1,200,000 and the $100,000 loan is paid off with the proceeds of the sale. After receiving two $50,000 annual payments, Cozbi and Zimri are both stabbed to death by an assailant. Assuming that the proceeds from the sale were held in a non-interest bearing savings account subsequent to the sale, how much money will be available for the charity at their death.

Answer rating: 100% (QA)

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