A CRT is a very useful financial planning tool for the conversion of highly appreciated assests (real estate, stocks and bonds) into a steady stream of income for the charitably inclined individual. 

 

By selling your home or investment property through a Charitable Remainder Trust, the IRS will eliminate the capital gains tax you would have to pay through a standard sale. You, as trustee, along with your financial advisor, will invest the principal from the sale, allowing you to take income from those investments for the remainder of your (or your spouses) life.

 

 Upon the last death, the remainder of the trust will be donated to the charity or charities of your choice. A portion of the income received monthly can be used to fund an equity replacement plan that will leave money for your heirs as well.

 

We recommend this trust for anyone with substantial capital gains remaining after the IRS-121 exclusion. The property must be in the trust prior to the sale. Readers should consult their own professional tax and financial planning advisors for a complete explinantion of the rules and tax benefits of the Charitable Remainder Trust Real Estate Sale.