Tax Considerations
A donor will receive an immediate tax deduction for the ultimate value of the CRT gift to a charity. In addition, a donor can avoid paying tax on gifts of appreciated securities or real estate. Income payments will be taxed as a combination of ordinary and tax-free income, as the situation dictates.
The appreciation or long-term capital gain in the donated asset will be a tax preference item. Accordingly, an alternative minimum tax analysis must precede such a gift.
Copyright ONFS. Taken from ESTATEPLANNING PowerPoint Presentation, downloadable through ON-Net.
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