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13) Single/Married Person (Cont.)

  • A deferred gift to charity qualifies for a charitable deduction; however, the deferred gift is calculated as a “present value of a future interest” gift.

  • The deduction will be less because the present value of the future interest (i.e., the time that the charity actually receives the gift outright) is less, because of the inflation index, than the value of a present interest.

  • A transfer to a skip person means that no transfer tax was levied on the death of the first generation person; therefore, an additional (GST) tax is levied on such transfers.

  • The charitable deduction is reduced relative to the increase in the length of time that the charity is expected to (or will) receive the actual gift; correspondingly, the sooner a charity is expected to receive the gift outright the greater the deduction.

  • The amount given to charity through the charitable trust will be reduced, dollar-for-dollar, from the grantor’s estate for tax purposes.

  • After the gift is made to a CRAT, at least 5% must be paid out to the grantor or other persons.

  • The minimum percentage rule (5%) is the same with a CRUT; however, there are additional payout methods that can be elected with a CRUT, and those will be listed in the remaining CRT product list.

     

     
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