Charitable Remainder Unitrust
(Gift example*)
Example
A 65 year-old donor in the 35% tax bracket establishes a unitrust with $200,000 of appreciated stock, originally purchased for $50,000. Unitrust pays donor 5.0% of the trust assets re-valued annually for life. Trust earns a 8% average total return. Assume IRS discount rate of 1.6%.
Trust principal |
$200,000 |
Income tax deduction |
$89,552 |
Income tax savings (35%) |
$31,343 |
Cap. gains tax savings (15%) |
$22,500 |
Income (Year 1) |
$10,000 |
Projected after-tax benefit to income beneficiary |
$196,154 |
Projected benefit to Yale |
$361,222 |
PLEASE NOTE: This example is for illustrative purposes only and is not intended as legal or tax advice. Consult your legal and tax advisors prior to making any material decisions based on this data.