You may be concerned about the high cost of capital gains tax upon the sale of your appreciated property or perhaps you recently sold property and are looking for a way to save on taxes and plan for retirement. A charitable remainder annuity trust may offer the solutions you need.
A charitable remainder trust (CRT) is a philanthropic and wealth management tool that can provide impressive financial and charitable benefits now and for the rest of the donor’s life. With input from the foundation, a trust is drafted by an attorney that will provide an annual payout rate based on the trust’s value every year. This payout typically ranges from five percent to eight percent per year. In some circumstances, a donor may want a fixed dollar amount paid out every year regardless of the trust’s value. The trust can be funded with cash, appreciated stock, or real estate.
Because the property can be sold through the trust and is not decreased by taxes, the donor receives an attractive income stream based on the full value of the trust assets. A donor also receives an immediate tax deduction.
Benefits of a Charitable Remainder Annuity Trust
After the life of the donor(s) or beneficiaries, the trust remainder is distributed to Barbara Sinatra Children’s Center. In summary, a donor can receive the following benefits:
- Avoid paying all upfront state and federal capital gains taxes on the sale of property, even highly appreciated stock or real estate.
- Receive a large income tax deduction in the year the trust is funded.
- Receive an attractive income stream every year from a professionally managed portfolio within the trust.
- Lock in market gains and take income from the full fair market value of your stocks.
- Simplify property management tasks by transferring real estate into the trust.
Please feel free to explore the resources on this website and contact us at your convenience for a confidential visit to discuss your goals and to learn more about the benefits of planned giving. If you would like to speak with our office to learn more, please call 760-340-2336.