 Charitable
Remainder Trust Example
Mrs. Smith, age 70, has $200,000 worth of stocks that she bought for $100,000. They are
decreasing in value and she wants to turn them into income so she can gift to her
grandchildren. But turning them into income would involve a capital gains tax. She
eventually wants the money to go to the Legacy Fund.
| |
Redeem
and Invest |
Charitable Gift
Annuity |
| Capital Gains Tax |
$20,000 |
-0- |
| Income Tax Deduction |
-0- |
$72,518* |
| Net Available for Investment |
$180,000 |
$200,000 |
| Annual Income Earned from CDs (5%) |
$9,000 |
|
| Annual Income Earned from Charitable
Remainder Trust (7.5%) |
|
$15,000 |
| Lifetime Earnings (16 years) |
$144,000 |
$240,000 |
| Bequest to the Legacy Fund |
$180,000 |
$150-200,000** |
* If she itemizes, the tax deduction of $72,500 can be
taken over a 6 years.
** Bequest unknown because the investment yield of the Trust is unknown.
For more information
For additional information on any of these topics or a more detailed
description the Legacy Fund fill out the following form and click "Send". Or
call
the Director
of Major Gifts, United Way of the Plains, 267-1321.
Planned Giving Information Form
(Neither the author nor United Way of the
Plains is engaged in rendering legal or tax advice. The purpose of this document is to
offer information of a general character only. Advice from legal counsel should be sought
when considering planned giving arrangements.) |
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