Save time with our cheat sheets, fact sheets, checklists & books!

February 18, 2009

Charitable Remainder Trust (CRT)

Print

Definition

A trust where the donor transfers assets to an annuity trust or unitrust. Under a CRT , The pays the donor or another beneficiary receives payments of a certain amount each year for a specified period. The term of the trust is limited to the longer of 20 years or the life of the designated recipients, at the end of which  the remaining trust assets must be distributed to a charitable organization.

Contributions to the charitable remainder trust can qualify for a charitable deduction. This charitable contribution deduction is limited to the present value of the charitable organization’s remainder interest

Referring Cite

Revenue Procedures 89-20, 89-21, 90-30, and 90-31.

Additional Helpful Information

  • Designating a CRT as the beneficiary of a retirement account may mean that beneficiaries of the trust are not eligible for the income in respect of a decedent (IRD) deduction for post-death distributions. Private Letter Ruling 199901023
  • Revenue Ruling 2008-41 provides taxpayers with guidelines on dividing a charitable remainder trust (CRT) into two or more separate and equal CRTs without violating the provisions of § 664 of the Internal Revenue Code.
More

Keep Learning

Applicable RMD Age

Applicable RMD Age The first year for which an IRA owner or plan participant must begin to take RMDs from their tax-deferred retirement account. RMDs

SIMPLE 401(k) Plan

Definition A SIMPLE 401(k) plan is a 401(k) plan established by a small business for it’s employees. Earnings accrue on a tax-deferred basis and distributions

Required Minimum Distribution (RMD)

Definition The minimum amount that must be withdrawn from retirement accounts, including qualified plans, 403(b) accounts, 457(b) accounts or IRAs, each year.  For retirement account

Required beginning date (RBD)

Definition The date by which a retirement account owner must begin distributing required minimum distribution (RMD) amounts from a Traditional,  SEP or SIMPLE IRA, a

Be among the first to know when

IRA Rules
Change