New Charitable Remainder Trust Legislation

The following is from the Legislative Update e-Newsletter issued by the National Committee on Planned Giving:

A new law includes a provision that allows charitable remainder trusts with unrelated business taxable income to maintain their tax-exempt status. Beginning in 2007, CRTs with UBTI will have an excise tax imposed in the amount of the unrelated business taxable income itself. The Tax Relief and Health Care Act of 2006, signed into law on December 20, 2006, includes the new provision. This legislation also creates some other potential consequences that, although limited, may not be as welcome. For an expanded discussion of the new provision and its implications see the 1/03/07 article by Marc Hoffman entitled A New Year’s Gift for CRTs? On the Planned Giving Design Center at http://www.pgdc.com.