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Charitable Remainder Unitrust

If you're concerned about the high cost of capital gains tax, funding a charitable remainder trust with appreciated assets can help you avoid this tax. For example, if you've recently sold property, this strategy can help you reduce your tax burden this year while also planning for retirement.

Benefits of a charitable remainder unitrust

Can be established for a term of years not exceeding 20, or for the life of one or more non-charitable beneficiaries, with the remainder going to a qualified charity
Avoid capital gains tax on the sale of your appreciated assets
Receive an immediate charitable income tax deduction for the charitable portion of the trust
Establish a future legacy gift benefitting Planned Parenthood of the Pacific Southwest

How a charitable remainder unitrust works

You transfer cash or assets to fund a charitable remainder unitrust.
In the case of a trust funded with appreciated assets, the trust will then sell the assets tax-free.
The trust is invested to pay fixed income to you or any other trust beneficiaries you select based on a life, lives or a term of up to 20 years.
You receive an income tax deduction in the year you transfer assets to the trust.
Planned Parenthood of the Pacific Southwest benefits from what remains in the trust after all the trust payments have been made.

Other considerations

A charitable remainder unitrust pays you income that reflects the value of the trust's assets. Your income has the potential to increase over time as the trust grows in value.
There are several unitrust payout options to meet your needs. The best payout option may depend on the nature of the asset used to fund the trust.

Charitable remainder unitrust video

Contact us

If you have any questions about a charitable remainder unitrust, please contact us.

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Calculate Benefits

The charitable remainder unitrust calculator generates a printable presentation that shows how you can enjoy increased income with a tax-free sale plus benefit from charitable tax deduction.

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Number of Beneficiaries

One Two

Click the appropriate button for a presentation of one or two beneficiaries. Selecting one beneficiary will cause the second beneficiary and the associated name and birthdate fields to be hidden from view.

First Beneficiary

Enter the name of the person. You may use such titles as "Mr.", "Mrs.", "Dr.", "Rev.", "Jr.", "Sr.", etc. For the remainder unitrust the first person is the first income recipient or beneficiary of the agreement.

First beneficiary is required

Birthdate

Month:

Day:

Year:

Please enter a valid birthdate for the first beneficiary

Birth month of the first beneficiary is required

Birth day of the first beneficiary is required

Birth year of the first beneficiary is required

Second Beneficiary

Second beneficiary is required

Birthdate

Month:

Day:

Year:

Please enter a valid birthdate for the second beneficiary

Birth month of the second beneficiary is required

Birth day of the second beneficiary is required

Birth year of the second beneficiary is required

Income Tax Rate

Select the current federal income tax rate of the donor. This will be used to project possible income tax savings. If you are uncertain about the correct rate, you may choose one of the middle rates. For many people, this will be close to their actual income tax rate.

Property Value $

Please enter a valid property value

Property value is required

Enter the amount of cash or the fair market value (FMV) of the asset(s) used to fund the CGA. For assets such as real estate, closely-held stock and other hard to value assets, the FMV is the appraised value of the property on the date of the gift.

Cost Basis $

Please enter a valid cost basis

Cost basis is required

Enter the cost basis of the asset being used to fund the trust or annuity. If the asset is cash, the cost basis is equal to the gift amount. If it is appreciated property, the cost basis will most likely be the amount you originally paid for the property. The cost basis is used to determine the capital gains tax which will be bypassed as a result of selling the asset. If the cost basis is not known or cannot be proven, the IRS assumes the cost basis to be $0. If cash funds the gift annuity, enter the same value as "Value of Property."

Current Return

Current return percentage is required

Enter the current return or yield of the asset(s) which will be used to fund the gift agreement. For example, if the trust will be funded with public-traded stock which is currently paying a dividend of 3%, the current return yield is, in turn, 3%. If the gift is funded with vacant land or a personal residence (assuming the property is not leased), the current return would be 0%.

Trust Payout

Payout must be between 5% and 50%

Payout percentage is required

Enter the percent income payout to the donor. You must select a trust percent payout of 5% or more.

Payment Frequency

Select either monthly, quarterly, semiannual, or annual income payments to the beneficiary(ies) of the income. The choice of payment frequency does affect the amount of the charitable deduction as the more frequent the payment (i.e. monthly as opposed to annually), the smaller the donor's tax deduction.

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