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You and your spouse, ages 70 and 68, own a small commercial building worth around $250,000, double what you paid for it. You are concerned about the consequences of liqudating this asset and reinvesting the proceeds, since they would be reduced by the capital gains taxes payable. You've always wanted to make a meaningful gift to The Nature Conservancy, and after consultation with Conservancy Gift Planners and your own advisors, you decide to place the building into a unitrust that will pay 5% of the trust's value for your lifetime (initially from the rental income from the building, then a percentage of the proceeds of its sale) to the two of you. The remainder of the unitrust will go to The Nature Conservancy.
What are your benefits?
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Comparison |
Unitrust |
Private Sale |
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Value of Property |
$250,000 |
$250,000 |
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Capital Gains Tax (@15%): |
$0 |
$18,750 |
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Net for reinvestment (before other sales costs) |
$250,000 |
$231,250 |
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Charitable deduction* |
$102,000 |
$0 |
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Tax savings @ 33% rate |
$33,660 |
$0 |
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Unitrust payment plus tax savings from charitable deduction
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Click here to calculate the benefits a unitrust would give you.
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*This example is based on a factor that changes monthly. Contact our office for a personal illustration based on the latest rates. |
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Note: The unitrust is not the only gift plan that pays you lifetime
income. Compare its benefits with those of
charitable gift annuity. |
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