In the past, taxpayers have asserted the following actions as within the meaning of commencing a "judicial proceeding" under section 2055(e)(3)(C)(iii), but these efforts were in vain: 1) filing a probate form indicating that a charitable remainder trust
exists, and 2) attaching an explanation statement on the estate tax return mentioning a charitable remainder trust
The tax savings and increased cash flow offered by the use of a charitable remainder trust
will often enable the grantor to use some or all of these savings to fund a wealth replacement trust for the benefit of his heirs, thereby providing for the tax effective replacement of property which had been transferred to the charitable remainder trust
Planning Point: Often the amount of insurance purchased for wealth replacement is equal to the value of the property contributed to the charitable remainder trust
Conversely, in a charitable remainder trust
, the noncharitable beneficiary is entitled to the annuity or unitrust interest with a charitable beneficiary receiving the remainder interest.
Normally, because a charitable remainder trust
is a tax-exempt entity, the trust's sale of the assets with the increased value would be exempt from income tax, officials write.
If you want to make a gift of money or appreciable property to an IRS-recognized charity, while at the same time providing for a child with a disability or other special need, a 1969 change to the tax code allows you to set up a Charitable Remainder Trust
and transfer the property to the CRT rather than directly to the charity.
A Charitable Remainder Trust
permits a property owner to contribute appreciated property to a Charitable Remainder Trust
(CRT) for the benefit of a designated charity.
6) Ordinarily, gifts to charity via a charitable remainder trust
(CRT) or pooled income fund would be considered future interest gifts because the charity's actual receipt of the donated property is delayed; nevertheless, such gifts are deductible at the time of the gift if the trust meets strict statutory requirements.
For this reason the NIMCRUT is perhaps the most popular type of charitable remainder trust
, since it allows for the deferral of income to later years, much like a deferred-income retirement plan, and still allows the trustee to maximize the payout amount.
Another way to fill a charity's Christmas stocking with money is through a charitable remainder trust
for 10 years" or "for life") and afterwards the charity receives the remaining corpus, the trust is called a charitable remainder trust
, where the charity receives what remains after the non-charitable beneficiary's interest ends, the "remainder interest.
By setting up a catch-all legal device known as a charitable remainder trust
With a type of charitable remainder trust
known as a "flip trust," you can make a gift for the future benefit of your favorite charitable organization, obtain an income-tax deduction, avoid capital gains tax and receive an income stream for life.
A charitable remainder trust
(CRT) can be an excellent vehicle for reducing or eliminating a concentrated stock position without triggering a capital-gains tax on the sale.
However, unlike a charitable remainder trust
, a pooled income fund is not a tax-exempt entity.