Charitable Remainder Trust
A charitable remainder trust receives cash or property from a donor, makes payments for a life, lifetimes or term of years and then distributes the remainder to charity.
A donor wants to turn appreciated property that produces little or no income into a productive asset without paying capital gains tax on the sale of the property. A donor contributes the appreciated property to a charitable remainder trust that will sell the property tax free and then make payments for life or a term of years.
Charitable Tax Deduction
The donor receives a current federal income tax deduction. A donor transfers cash or appreciated property to the CRT. The CRT is a tax-exempt trust that can sell the appreciated property without paying capital gains tax.
Bypass Gain
The trust sells property tax-free. Increased Income. The trust pays a percentage of its value to the trust beneficiary.
Duration
A CRT can last for the lifetime of one or more beneficiaries or for a specific term of years.
Annuity vs. Unitrust Payout
A charitable remainder annuity trust (CRAT) pays a fixed dollar amount each year. By contrast, a charitable remainder unitrust (CRUT) pays an amount equal to a percentage of the trust value at the beginning of each year.
Taxation of Payouts
Most CRT payouts are taxed to the beneficiary as ordinary income and/or capital gain.
Payout Flexibility
A unitrust offers four flexible payout options. A standard CRUT pays a fixed percentage of the trust value. A net income trust (NICRUT) pays the lesser of the trust’s net income or the standard amount. A net income with makeup trust (NIMCRUT) is like a NICRUT but can make additional distributions. Finally, a FLIP trust pays like a NIMCRUT until a certain date or event and then “flips” to payout like a
standard CRUT.
Since the information on this site is not intended as legal, tax, or investment advice, it is highly recommended that prospective donors consult with their own tax or legal advisors prior to making a planned gift.
If you simply would like a to have a Mayan Families Planning representative contact you about options available, please contact:
Dwight Poage
Mayan Families
2609 Hartford St.
San Diego, CA. 92110-2315
Tel: 619-550-2608
Web: www.mayanfamilies.org
E-mail: dwight@mayanfamilies.org