Charitable remainder trust

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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 ?
Example: If a donor creates a charitable remainder trust and funds it with a piece of artwork, the donor may not take a charitable income tax deduction for the contribution to the charitable remainder trust until the year the trustee sells the artwork.
Like a charitable remainder trust or a pooled income fund, a charitable gift annuity begins with an outright charitable gift, which is combined with the purchase of a fixed income annuity contract.
Creating a charitable remainder trust (CRT) at death is a technique that has been used for many years to obtain an estate tax charitable deduction in a decedent's estate.
Conversely, charitable remainder trusts that are unitrusts, which pay out a predetermined percentage of the net fair market value (FMV) of the trust each year, are not as attractive for individuals in this low-interest-rate environment because the remainder interest passing to the beneficiaries is calculated using the unitrust percentage (at least 5%), rather than the Sec.
See the expanded discussion of charitable remainder trusts on page 338-339.
See Q 7949 for a comparison of pooled income funds with charitable remainder trusts. See Q 7950 for an overview of certain requirements applicable to all such gifts.
As noted above, in the case of charitable remainder trusts, the individual grantor and the charity are happy.
It explains how to use the IRS tax code's rules on depreciation, how to set up annuity trusts and charitable remainder trusts, how to avoid paying federal taxes, and how to understand the different types of 1031 exchanges.
There are three distinct types of split-interest trusts: charitable remainder trusts, charitable lead trusts, and pooled income funds.
Charitable remainder trusts are typically used in conjunction with wealth replacement trusts.
Charitable remainder trusts are generally exempt from income taxes.
Unfortunately, it did not extend the safe harbor rules to include charitable remainder trusts. Some planning options do exist for donors who desire to make such gift.

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