If you hold highly appreciated stock or real estate and want to support a charity, selling the asset first triggers massive capital gains taxes. A Charitable Remainder Trust (CRT) allows you to sell the asset tax-free, receive an income stream for life, and leave the remainder to charity.
The CRT Advantage
When you transfer an appreciated asset into a CRT, the trust can sell it without paying capital gains tax. The full value of the asset is then reinvested to generate an income stream for you (or your heirs) for a set term or for life.
Tip
The Upfront Deduction
In addition to avoiding immediate capital gains tax, you receive an immediate income tax deduction based on the present value of the remainder interest that the charity will eventually receive.
The 10% Rule
To qualify as a CRT, the IRS requires that the present value of the remainder interest destined for charity must be at least 10% of the initial net fair market value of the property transferred to the trust.
10%
Key Figure
To qualify as a CRT, the IRS requires that the present value of the remainder interest destined for charity must be at l