Charitable Remainder Trust (CRT)
A charitable remainder trust provides income to the donor or other beneficiaries for life or a term, with the remainder passing to charity, offering an immediate income tax deduction and avoiding capital gains on contributed assets.
Get personalized explanations
š”
Exam Tip
CRT = income to donor first, REMAINDER to charity. CRAT = fixed annuity. CRUT = variable unitrust. 10% minimum to charity. Avoids capital gains.
What is a Charitable Remainder Trust?
A CRT provides income to non-charitable beneficiaries first, with the remainder going to charity.
Two Types
| Type | Income Payment |
|---|---|
| CRAT | Fixed annuity (min 5% of initial value) |
| CRUT | Unitrust (min 5% of annual value) |
Tax Benefits
| Benefit | Description |
|---|---|
| Income Tax Deduction | Present value of charity's remainder |
| No Capital Gains | On appreciated assets contributed |
| Income Stream | For life or up to 20 years |
Requirements
- 10% minimum remainder to charity
- Annuity/unitrust rate 5%-50%
- Term: life or up to 20 years
Study This Term In
Related Terms
Learn More with AI
10 free AI interactions per day
Stay Updated
Get free exam tips and study guides delivered to your inbox.