Charitable remainder trust

(redirected from Split-Interest Trusts)
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Charitable remainder trust

An irrevocable trust that pays income to a designated person or persons until the grantor's death, when the income is passed on to a designated charity. A charitable lead trust by contrast allows the charity to receive income during the grantor's life, and the remaining income to pass to designated family members upon the grantor's death.

Charitable Remainder Trust

An irrevocable trust in which the grantor deposits assets with the income from the investment of these assets given to beneficiaries for a certain period of time. After the time expires, the remainder of the assets and income are donated to charity. A charitable remainder trust allows the grantor to provide for his/her survivors after death while reducing to a minimum the estate tax because the assets are ultimately directed to charity.

charitable remainder trust

A trust that pays an income to one or more individuals for a specified length of time then leaves the remainder of the trust to a designated charity. A charitable remainder trust can produce substantial tax benefits and is particularly suitable for use by a married couple with no children. Compare charitable lead trust.

Charitable remainder trust.

A charitable remainder trust (CRT) is an irrevocable trust designed to provide income to you or a beneficiary for either a fixed period or until the recipient dies. At that point, all remaining assets go to the charity named as ultimate beneficiary.

At the time you establish the trust, you can deduct the discounted present value of the assets as a charitable contribution. That value The value, which is calculated using IRS tables, may be less than the market value of these assets.

Transferring assets in a CRT not only reduces the value of your estate for estate tax purposes but also eliminates potential capital gains tax on any increased value of the assets.

References in periodicals archive ?
With the high annual operating and administration costs of split-interest trusts and private foundations, a donor may be looking for an easier planning technique that stops short of handing a check directly to charity.
These trusts made up about 6 percent of all split-interest trusts in 2012.
Overall, split-interest trusts averaged approximately $86,000 gross income per return.
The operation of a split-interest trust typically involves one beneficiary-type (either charitable or non-charitable) receiving payments over a period of time, and then the other beneficiary-type receiving the remaining trust assets.
Of the three types of split-interest trusts (SITs), trustees of charitable lead trusts continued to be the most likely to file both initial and final returns, with returns for ongoing trusts making up only 86 percent of the CLTs filed.
IRC [section] 6652(c)(2)(C) generally imposes a failure-to-file penalty on split-interest trusts unless the failure is due to reasonable cause.
Private foundations are defined to include certain split-interest trusts, such as charitable annuity, lead and unitrusts, if such trusts are not exempt from taxation under Sec.
This article focuses on the information and activities of split-interest trusts for Filing Year 2008, based on Tax Year 2007 returns and, to a much lesser degree, those from prior tax years.
4947, which dealt with nonexempt trusts, including split-interest trusts such as the trust involved here, and imposed various restrictions, comparable to those imposed on private foundations in respect of self-dealing, retention of excess business holdings, and the making of speculative investments or taxable expenditures but not including a mandatory income distribution requirement (such as that imposed on a private foundation).
1) End-of-year net asset values reported for split-interest trusts increased to $115.
While many of these 2005 gifts were given directly, donors also used simple trusts, insurance trusts, split-interest trusts, and 529-trusts.
The lack of striking change between Filing Years 2005 and 2006 may be attributed, in part, to an absence of new tax law revisions affecting split-interest trusts.