Tuesday, August 11, 2009

When Does a Charitable Remainder Trust, Charitable Gift Annuity, CRUT, CRAT, CLT, etc. Make Sense?

I’ve talked about the Self Directed Installment Sale and the Charitable Installment Bargain Sale, so now I’ll characterize when the other charitable options may make sense as capital gains tax saving strategies

* You have a charity that you want to support by giving away a good portion of your proceeds from an asset sale either now or after your death

* You need a large tax deduction to offset ordinary income

* Your heirs have been taken care of by the fact they will inherit other assets or you have adequate life insurance from which they will receive the proceeds

* You would rather see the charity receive the proceeds rather than the IRS via taxes due on sale

* You have highly appreciated assets with very low cost basis which gives you a larger tax deduction upfront and you have a large income from other sources or sales

* Your income from other sources does not depend on the sales proceeds to fund your retirement

* You feel an income stream is more beneficial to a family member than gifting them with the asset or lump sum, as they may spend the bulk and run out of money prematurely.

If these reasons closely resemble your desires for the proceeds, and you have a current sale pending, fill out the Confidential Questionnaire at www.savegainstax.com and I will contact you to discuss further.

Paula Straub