A Charitable Remainder Trust (CRT) can provide an opportunity to sell highly appreciated assets without paying income taxes. If you have property that has a low cost basis, and would like a tax-advantaged lifetime income for you and your spouse, consider creating a CRT that benefits the Point West Rotary Foundation. Through this kind of trust, you and the Foundation can give and receive!

For example, suppose a husband is 65, his wife is 64, and together they own a commercial building worth $1,000,000.00. Property income tax planning resulted in their depreciating the property over the years, so their costs basis is 0.00.

If they sell the property, they will be taxed on the entire $1,000,000.00, partially taxed at the capitol gain rate, and much of it will be taxed as recaptured depreciation! Ouch! Best case scenario? They net $685,000.00 from the sale, which they invest at 6% providing a stable $41,100.00 annual return.

However, if the property is sold in a CRT, the couple will not realize the gain on the sale, permitting the ENTIRE $1,000,000.00 to return the same 6%. The results? Assuming the same 6% return, the annual income will be $71,210.00! Plus, they will have a charitable deduction for their income taxes of $174,341.41, reducing their annual income tax bill. Upon their passing, the remaining principal of the trust will go tax free to the Point West Rotary Foundation.

If you or someone you know might be interested in this opportunity to save taxes and fund our foundation, contact any of the trustees of the Point West Rotary Foundation for more information or request a consultation by e-mail at FoundationInfo@pointwestrotary.com.