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Tax Incentives Abound for Charitable Remainder Annuity Trusts

A Charitable Remainder Annuity Trust (CRAT) is a type of charitable tax planning strategy in which a donor contributes assets to a charitable trust which subsequently pays a fixed income to a designated beneficiary, in the form of an annuity. A CRAT lasts until the donor passes away, at which time any funds remaining in the trust are then donated to a charity pre-chosen by the donor.

This strategy is appropriate for individuals who are 1) charitably inclined, 2) in or near retirement, 3) have an income need, 4) and have after tax non-IRA assets with low basis.

In the following 2-minute video, AAFCPAs Tax Strategist Josh England, JD, LLM provides a case example to demonstrate the many tax benefits of a CRAT, including reduction of capital gains tax.

CRATs are one of the many tax strategies AAFCPAs considers as part of a customized and comprehensive plan to safeguard and maximize your wealth.

If you have questions, please contact: Joshua England, JD, LLM at 774.512.4109, jengland@nullaafcpa.com; or your AAFCPAs Partner.

About the Author

Joshua England, Tax Attorney
Josh is a tax strategist with extensive expertise advising high-net-worth individuals, nonprofits, and business owners and investors on effective strategies to ensure tax efficiency, asset protection, well-executed succession plans, and wealth preservation. He has been practicing law since 2000 and focuses his practice on the areas of wealth transfer planning, fiduciary and individual taxation, business structuring to maximize tax efficiency, and advising tax-exempt organizations, foundations and charitable donors.