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CHARITABLE
REMAINDER TRUST
Avoid Capital Gains Tax with a Charitable Remainder Trust
If you want to increase your current income, consider a
gift that pays you back! A charitable remainder trust may
allow you to make a substantial gift to the Sisters while
still providing for your personal financial needs. A trust
is attractive to many donors because it offers substantial
tax benefits and may increase your cash flow. You can transfer
either appreciated securities or real estate into the trust.
The trust then sells the property, which allows you to avoid
capital gains tax on the sale. You will receive an income
stream from the trust for the rest of your life or a stated
term of years. At the end of the trust term, the remainder
of the trust is distributed to the SSMO Foundation.
The benefits of a charitable remainder trust are:
- Annual income for life or number of years,
- Avoidance
of capital gains tax on appreciated property,
- Income tax
deduction,
- Potential reduction of estate tax, and
- Significant gift
to the Sisters of St. Mary of Oregon.
Example: Mary Beth is a graduate of the Sisters’ schools
and has owned a rental
house for many years. She and her husband, Frank, managed
the rental. Now they are facing retirement and would prefer
to travel instead of repairing leaky faucets. After much
discussion with their advisors and the SSMO Foundation, they
decide to donate the property to a charitable remainder trust.
Because the trust is in charge of selling the property, Mary
Beth and Frank do not have to pay capital gains tax on the
appreciation. That saves them quite a bit in capital gains
taxes.
As a result of their generosity, Mary Beth and Frank will
receive a payment of 6% of the trust’s value each year
for the rest of their lives. They will also receive an income
tax deduction for a portion of the gift. At their death,
the remaining balance in the trust will benefit the Sisters
and their ministries. Mary Beth is thrilled that she is able
to avoid the capital gains tax, be free to travel, and make
a meaningful gift to the Sisters who were so good to her
as a child.
Melissa Maxwell
Development Director
503-906-1139
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