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Encyclopedia > Charitable remainder unitrust

A charitable remainder unitrust is a charitable remainder trust created by 26 USCA 664. This trust ("CRUT") pays a fixed percentage of the assets in the corpus to the set beneficiary. The trustee determines the value of the assets by its fair market value at the time of contribution. The fixed percentage of the payout must be more than 5% and less than 50% of the fair market value of the assets in the corpus. The remainder of the corpus goes to the set charities. The remainder must be at least 10% of the fair market value of the asset when contributed. Section 664(d) defines a charitable remainder unitrust.

Contents

Definition

Under § 664(d) a charitable remainder unitrust is a trust that:

  • (A) from which a fixed percentage (which is not less than 5 percent nor more than 50 percent) of the net fair market value of its assets, valued annually, is to be paid, not less often than annually, to one or more persons (at least one of which is not an organization described in section 170(c) and, in the case of individuals, only to an individual who is living at the time of the creation of the trust) for a term of years (not in excess of 20 years) or for the life or lives of such individual or individuals,
  • (B) from which no amount other than the payments described in subparagraph (A) and other than qualified gratuitous transfers described in subparagraph (C) may be paid to or for the use of any person other than an organization described in section 170(c),
  • (C) following the termination of the payments described in subparagraph (A), the remainder interest in the trust is to be transferred to, or for the use of, an organization described in section 170(c) or is to be retained by the trust for such a use or, to the extent the remainder interest is in qualified employer securities (as defined in subsection (g)(4)), all or part of such securities are to be transferred to an employee stock ownership plan (as defined in section 4975(e)(7)) in a qualified gratuitous transfer (as defined by subsection (g)), and
  • (D) with respect to each contribution of property to the trust, the value (determined under section 7520) of such remainder interest in such property is at least 10 percent of the net fair market value of such property as of the date such property is contributed to the trust.

History

Footnotes

    See Also

    1. 26 USCA 664
    2. 26 CFR 1.664-1
    3. 26 CFR 1.664-3
    4. Charitable Remainder Annuity Trust
    5. Tax treatment of charities and gifts to charities
    Law of the United States
    Constitutional law Federalism, Separation of powers, Civil rights, Legislative branch
    Courts Federal Courts: Supreme Court, Courts of Appeals, District Court, Bankruptcy Court, Claims Court, Tax Court
    State Courts: State supreme courts
    Education Law school, Law School Admission Test, Admission to the bar


     

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