What are you using to write on your presentation? Are you mostly promoting a one life CRT and using the extra funds to to fund a wealth replacement trust and funding it with premium financed life insurance or stand alone life insurance?
Do you choose the payout % from the very beginning when you create the CRT? Hypothetically, if you put 100k in the CRUT and you have an investment that can have a ROI of 30% the first year and 60% the second yr, can you change the payout % to be larger the 2nd year?
Hi Michael, why do you say the income tax rate is more favorable than the capital gain rate (10:08)? Isn't the capital gain rate usually lower? 15% or 20%
What would you expect that a 55 year old male could receive monthly as an income? His charitable donation would be about 2 million for example. Also, could the beneficiaries receive a monthly payout the same time as the donor?
There are a number of variables to consider such as tax rate, life expectancy and so forth. For a Remainder trust, the charitable beneficiaries receive the remainder at the end of the CRT, and not regular payouts. The donor can choose to donate their payout to a charity if they do not need that income. The reverse of the CRT is a Charitable Lead Trust, where the charity receives the distribution and the donor then gets the money back at the end. When looking at these options its always best to talk to a tax professional. I hope this helps!
Thanks for the comment. Is there something specific you need answered that we can cover? The information would be pretty much the same on how a CRUT would work.
Can you? Sure. Would you want to? No, because it would cause taxable gains to be realized. He left out a huge piece of the strategy here - you typically donate assets that have a large, unrealized gain. Maybe you had a big crypto gain this year but don’t want to pay the taxes in a lump, which you would if you sold. Donating an appreciated asset to a CRUT is a tax-free event, you get a partial write-off, as a charity the CRUT can sell the asset and reinvest without a tax event, and you convert the profit to long-term income (which is taxable later). Depending on the dollar amounts involved (because of tax rate thresholds), it can be a tax-saving strategy.
What are you using to write on your presentation? Are you mostly promoting a one life CRT and using the extra funds to to fund a wealth replacement trust and funding it with premium financed life insurance or stand alone life insurance?
Thank you, very important information.
Do you choose the payout % from the very beginning when you create the CRT? Hypothetically, if you put 100k in the CRUT and you have an investment that can have a ROI of 30% the first year and 60% the second yr, can you change the payout % to be larger the 2nd year?
Hi Michael, why do you say the income tax rate is more favorable than the capital gain rate (10:08)? Isn't the capital gain rate usually lower? 15% or 20%
What would you expect that a 55 year old male could receive monthly as an income? His charitable donation would be about 2 million for example. Also, could the beneficiaries receive a monthly payout the same time as the donor?
There are a number of variables to consider such as tax rate, life expectancy and so forth. For a Remainder trust, the charitable beneficiaries receive the remainder at the end of the CRT, and not regular payouts. The donor can choose to donate their payout to a charity if they do not need that income. The reverse of the CRT is a Charitable Lead Trust, where the charity receives the distribution and the donor then gets the money back at the end. When looking at these options its always best to talk to a tax professional. I hope this helps!
Could you produce an updated RUclips on this??
Thanks for the comment. Is there something specific you need answered that we can cover? The information would be pretty much the same on how a CRUT would work.
Crypto currency can be donated too right?
Yes
Yes it can
Is it ok the change the profitable crypto to UDST before you to send to the CRT?
Can you? Sure. Would you want to? No, because it would cause taxable gains to be realized.
He left out a huge piece of the strategy here - you typically donate assets that have a large, unrealized gain. Maybe you had a big crypto gain this year but don’t want to pay the taxes in a lump, which you would if you sold.
Donating an appreciated asset to a CRUT is a tax-free event, you get a partial write-off, as a charity the CRUT can sell the asset and reinvest without a tax event, and you convert the profit to long-term income (which is taxable later). Depending on the dollar amounts involved (because of tax rate thresholds), it can be a tax-saving strategy.