Charitable Remainder Trust (CRT) Calculator
Model Charitable Remainder Unitrusts (CRUT) and Annuity Trusts (CRAT). Calculate upfront income tax deductions, 100% capital gains tax avoidance, and lifetime cash flows.
Charitable Remainder Trust Parameters
Model CRUT / CRAT tax deductions, zero capital gains, and lifetime income streams
$321,300
100% tax-free sale inside CRT$366,032
~24.4% of FMV$90,000
Paid to beneficiaryPASSED
Charitable remainder meets rulesCRT Estate Planning Brief Ready
Export calculations for estate planning attorneys and philanthropic advisors
Minimizing Capital Gains Tax and Maximizing Philanthropy with CRTs
Selling highly appreciated real estate, private business equity, tech stock, or cryptocurrency triggers severe federal capital gains tax (20%), Net Investment Income Tax (3.8%), and state income taxes. A Charitable Remainder Trust (IRC Section 664) is an irrevocable, tax-exempt trust that sells appreciated assets with zero immediate capital gains tax, generates an immediate charitable income tax deduction, and pays an annual income stream to you for life.
Key Wealth & Tax Features
100% Capital Gains Tax Elimination
Because the CRT is a tax-exempt entity under IRC Section 664, it sells contributed assets at full fair market value with zero upfront capital gains tax.
Immediate Upfront Tax Deduction
Calculates the actuarial present value of the charitable remainder interest, providing a large charitable deduction in Year 1.
CRUT vs CRAT Structure Comparison
Compare Charitable Remainder Unitrusts (percentage of annual trust revaluation) against Charitable Remainder Annuity Trusts (fixed dollar payments).
IRS Section 7520 Discount Rate Tuning
Incorporates official IRS statutory discount rates to model legal remainder calculations accurately.
IRS 10% Remainder Test Compliance
Verifies that the actuarial present value of the charitable gift equals at least 10% of the initial contribution as required by federal law.
Wealth Advisory Brief Export
Instant export of tax deductions and income projections ready for estate planning attorneys and philanthropic advisors.
Practical Financial Applications
- ✓Commercial Real Estate Owners
Contribute zero-basis commercial buildings or multi-family complexes to avoid massive depreciation recapture and capital gains.
- ✓Startup Founders Selling Private Equity
Donate pre-IPO or pre-acquisition stock to eliminate capital gains while securing lifelong retirement distributions.
- ✓High-Net-Worth Philanthropists
Leave a permanent financial legacy to universities or non-profits while providing family income.
- ✓Estate Planning Attorneys & CPAs
Size charitable remainder present values for clients undergoing major liquidity events.
Frequently Asked Questions
How does a Charitable Remainder Trust avoid capital gains tax?
When you transfer appreciated property to a CRT, you do not trigger a taxable event. The trust—which is recognized by the IRS as a tax-exempt entity under Section 664—sells the asset for full market value without paying capital gains tax, allowing 100% of the gross sale proceeds to be reinvested into diversified income-generating assets.
What is the difference between a CRUT and a CRAT?
A Charitable Remainder Unitrust (CRUT) pays a fixed percentage of the trust's value as revalued every year, meaning distributions grow if investments perform well. A Charitable Remainder Annuity Trust (CRAT) pays a fixed dollar amount determined at inception, regardless of investment returns.
What is the IRS 10% rule for Charitable Remainder Trusts?
Under IRC Section 664(d), the actuarial present value of the remainder interest that will eventually pass to charity must equal at least 10% of the initial fair market value of the property contributed to the trust.
How are distributions from a CRT taxed to the beneficiary?
Distributions are taxed to the beneficiary under a four-tier accounting rule: Tier 1: Ordinary income; Tier 2: Capital gains; Tier 3: Tax-exempt income; Tier 4: Tax-free return of principal. Income retains its character from the trust's historical earnings.
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