Charitable Trust

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Charitable Trust

An irrevocable trust into which the grantor deposits assets, with at least some of the proceeds going to a charity. There are two types of charitable trusts. In a charitable lead trust, the income from the investment of the assets in the trust goes to a designated charity for a certain period of time. After that time expires, the remainder of the assets and income are given to the trust's beneficiaries. In a charitable remainder trust, the income from the assets goes to the beneficiaries for a certain period of time, after which the assets themselves are donated to charity. In the United States, both types of charitable trust receive favorable treatment for estate tax purposes.
References in periodicals archive ?
ElderTrust also met the fourth prong of the test because it did not provide any pecuniary benefit to its members or use any income or profit for other than a charitable purpose.
Although small foundations earned less than 4 percent of total revenue and held an even smaller percentage of the aggregate fair market value of total assets for Tax Year 2002, they distributed nearly 10 percent of both disbursements for charitable purposes and contributions, gifts, and grants for that year.
The key issues appear to be whether an NPO engages in unfair competition with for-profit businesses, whether private benefits inure to physicians or employees and whether the activity is in direct conflict with the NPO's charitable purpose.
On the facts before it, the Court found that the organization seeking to be registered in the case did not qualify, and was unwilling to go as far as finding that promoting or providing amateur sports should be a recognized charitable purpose.
However, if an anti racist group opposes or lobbies for changes in, or the retention of, the law, existing policy or decisions of any level of government, these actions would be considered political activities as defined by-the Tax Act, and not a charitable purpose.
The transfer of a piece of equipment that is meant to be used only for charitable purposes to an organization that will clearly use it for such purposes is likely to be a charitable activity.
Charitable mileage: The mileage rate for charitable purposes, other than activities related to Hurricane Katrina relief, remains at 14 cents cents per mile.
A non-profit taxpayer operating a retirement community for the elderly did not serve a charitable purpose and, thus, was not entitled to an exemption from property taxes, according to the Supreme Judicial Court of Massachusetts.
Nonexempt charitable trusts, which operate solely for charitable purposes, and charitable remainder trusts, which serve both charitable and non-charitable interests, are two common trust vehicles used to make distributions to the charitable sector.
This measure would modify the current constitutional prohibition against private lotteries to permit legislative authorization of raffles conducted by nonprofit organizations for beneficial and charitable purposes.
Under state law, the Attorney General is entrusted with the duty to protect funds and assets solicited for charitable purposes.
Mr Steve Hodgetts, at the Birmingham office of Kidsons Impey, says the law permits exemption for one-off fund-raising events organised by a charity for charitable purposes.

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