A charitable gift can help to improve your tax or financial situation. Here’s a brief look at some popular options for charitable gifting, with potentially significant tax advantages.
Charitable Remainder Trusts. Taxpayers with highly appreciated assets, such as stock portfolios or real estate holdings, are often hesitant to sell those assets and reinvest the proceeds because of the capital gains taxes linked to the sale. A CRT may provide a solution.
In exchange for transferring highly appreciated assets into a CRT, you may receive: a) income payments from the CRT; b) a tax deduction for the present value of those assets; c) tax-free compounding of those assets while they are held within the CRT.
After death, whatever assets remain in the CRT will go to your favorite charities. You can structure a CRT in conjunction with an irrevocable life insurance trust; your heirs will receive the proceeds from this insurance policy.1
Charitable Lead Trusts. The inverse of a CRT, assets are transferred to the CLT, and an annual percentage of the value of the trust assets are paid to a charity. At the end of the trust term, the remaining assets withi ...