A Capital Gain Avoidance Strategy

Put more money to work for you and a make a larger gift to charity.

 

How It Works

You make a gift of the property to the Real Estate Unitrust, a variation of a Charitable Remainder Unitrust often called a “Flip” Unitrust.

You are entitled to a charitable deduction for a portion of the value of the gift.

The Unitrust sells the donated property without paying capital gain tax, and the sale proceeds are invested in one of our model portfolios.

This unitrust version initially pays you a fixed percentage of the fair market value of the trust assets, or the net (rental) income, whichever is less. Then, beginning in January of the year following the year in which the property is sold, the method of payment changes, i.e., “flips”, and you begin to receive a fixed percentage of the fair market value of the trust assets each year, regardless of trust income.

When the unitrust ends, assets remaining in the trust are distributed to CMC.

Unitrust Payments

CRUT payments are a fixed percentage of the annual value of the trust assets. CRUT assets are revalued each year as of the first business day of the year, and trust payments reflect asset value increases or decreases. Investment returns in excess of the stated trust payout rates are retained in the trust, on a tax-sheltered basis, and build trust values. Under current tax law, about 75 percent of the payment you receive will be taxed as capital gain income or qualified dividends.