A charitable remainder trust is an irrevocable gift of appreciated assets. The income derived from the trust is paid to you and/or your beneficiary for life or a designated number of years. Afterward, the property passes to Hillsides. This gift allows you to save on estate taxes and probate costs while promoting Hillsides’ mission to create safe places for vulnerable children and their families.
By creating this trust, you also receive a charitable income tax deduction – and avoid capital gains taxes.
We Can Accommodate Your Needs
A charitable remainder trust pays out a specific percentage of the trust’s value each year, based on an annual revaluation, so the income may vary. Additional gifts of any amount may be subsequently added to the trust.
- No immediate capital gains taxes on the transfer of the asset to the trust
- A substantial income tax deduction for what is expected to be left to Hillsides
- A significant gift for Hillsides that will leave a meaningful legacy
Save on Taxes When You Give
To demonstrate the financial benefits realized through a charitable remainder trust, consider the following example for a single individual, age 65:
Stock valued at $500,000 transferred to charitable remainder trust
Capital gains tax on donated property = $0
Tax deduction = $205,000
If the stock was originally bought at $100,000, then $400,000 is the capital gain. By placing the stock into a charitable remainder trust:
No capital gains will accrue upon the establishment of the trust. There are no capital gains tax issues when the trust sells the stock either, so the entire $500,000 may be reinvested by the trustee.
If the trust is set to pay income at 6 percent of its value, $30,000 will be generated as income to you in the first year. As the value of the trust assets’ fluctuate, so will the annual income you receive.
You will receive an income tax deduction in the year the charitable remainder trust is established, based on its current value.
Altogether, the combined tax benefits and income received are powerful rewards for your gift to Hillsides.
Hillsides’ gift planning director welcomes your inquiries at firstname.lastname@example.org or 323-543-2800 ext. 12230.