Enjoy Tax Relief and Be a Philanthropist

If you have a highly appreciated asset you maywant to consider using a charitable remainder unitrust (CRUT). The recentincrease in federal tax rates encourages people to use a CRUT. The appreciatedasset is first placed in the trust, which is a tax-exempt entity. The trust cansell the asset without owing any capital gains tax itself. The key benefit tothis type of trust is avoiding gains tax especially because the long-term stockgains has climbed from 15% to 23.8%.

After selling the asset, the trust will pay out afixed percentage of the principal or an annual annuity. The payments are longterm and will continue over a period of years. The payments may even continuefor one or more lives and any remainder goes to charity. The law requires thatthe charity receive at least 10% of the initial worth. Those who use CRUT’swill also get a charitable tax deduction. 

See Ashlea Ebeling, Charitable Shelter: How CRUTs Cut Capital Gains Tax, Forbes Aug. 14, 2013.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.