Charitable Remainder Unitrusts
(Gift example*)
Basic Unitrust - Gift of Stock
You are considering a gift to the Red Cross of $250,000, but you are concerned about the capital gains consequences of liquidating assets, and reducing your and your spouse's cash flow.
You and your spouse, ages 70 and 68 own appreciated stock that has doubled in value. You decide to place the assets into a unitrust that will pay 5% of the trust's value for your lifetime to the two of you. Any remainder in the trust after the obligations to you have been fulfilled will pass to the Red Cross to support an area of your choosing.
| Comparison |
Unitrust |
Private Sale |
| Amount transferred |
$250,000 |
$250,000 |
| Capital Gains Tax (@15%) |
0 |
$18,750 |
| Net for reinvestment |
$250,000 |
$231,250 |
| First year's income |
$12,500 |
$11,562 |
| Charitable deduction |
$101,328 |
0 |
| Tax savings @ 35% rate |
$33,438 |
0 |
| Total benefit, first year |
$45,938* |
$11,562 |
| *Unitrust payment plus tax savings from charitable deduction |
Click here to calculate the benefits a unitrust would give you. |
| *This example is based on a factor that changes monthly. Contact our office for a personal illustration based on the latest rates. |
| Note: The Unitrust is not the only gift plan that pays you lifetime income. Compare its benefits with those of the annuity trust and the gift annuity. |
Flip Unitrust - Gift of Real Estate
You are considering a gift to the Red Cross of $250,000, but you are concerned about the capital gains consequences of liquidating assets, and reducing your and your spouse's cash flow.
You and your spouse, ages 70 and 68, own a small commercial building that has doubled in value and consequently generated several offers to purchase. You decide to place the building into a charitable remainder unitrust that will pay 5% of the trust’s value for your lifetime to the two of you. Until the property is sold, though, the trust will pay you either the net-income generated by the trust or 5% of the trust's value (whichever is less). Any remainder in the trust after the obligations to you have been fulfilled will pass to the Red Cross to support an area of your choosing.
| Comparison |
Unitrust |
Private Sale |
| Amount transferred |
$250,000 |
$250,000 |
| Capital Gains Tax (@15%) |
0 |
$18,750 |
| Net for reinvestment |
$250,000 |
$231,250 |
| First year's income |
$12,500 |
$11,562 |
| Charitable deduction |
$101,328 |
0 |
| Tax savings @ 35% rate |
$33,438 |
0 |
| Total benefit, first year |
$45,938* |
$11,562 |
| *Unitrust payment plus tax savings from charitable deduction |
Click here to calculate the benefits a unitrust would give you. |
| *This example is based on a factor that changes monthly. Contact our office for a personal illustration based on the latest rates. |
| Note: The Unitrust is not the only gift plan that pays you lifetime income. Compare its benefits with those of the annuity trust and the gift annuity. |
For more information
Email us, complete the personal illustration form, or call us at (800) 797-8022 Ext. 5 so that we can assist you through every step of the process.
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