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The charitable federal income tax deduction is calculated based
on both the lead payment and final payment to the charity, both
which are set forth in the trust document according to the donor’s
desired charitable contribution. The charitable income tax deduction
is limited to 30% of adjusted gross income (AGI) because it is
considered a gift “for the use of” a charity. Any unused deduction
may be carried forward for up to 5 years. If it is a gift of capital
gain property or the charitable beneficiary is a private foundation,
the deduction is limited to 20% AGI. |
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The donor contribution to the Enhanced Charitable Trust is in
part a taxable gift subject to federal gift tax. The amount subject
to federal gift tax is based on the total gift to the trust less
the amount of the charitable income tax deduction. If available,
the grantor could apply his/her lifetime gift tax exemption to
reduce or eliminate any gift tax. |
| • |
Internal Revenue Code 7520 provides an interest rate used to
value certain charitable interests in trusts for tax purposes. |
| • |
The charitable income tax deduction provided in
this proposal is based on preliminary factors and should not be
relied on solely in the determination of an individual’s tax consequences. |
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• |
The Enhanced Charitable Trust is structured
as a grantor deferred charitable lead annuity trust. The donor/grantor
receives an up-front charitable federal income tax deduction
and reports income generated by the trust on the grantor’s
tax return. |
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A portion of the trust’s assets is invested in
an income-producing investment, such as municipal bonds for tax-free
income and the remaining amount is used to purchase life insurance.
The trust is the owner, payor, and the beneficiary of the life
insurance. The trust provides an annual lead payment to charity
during the trust term, which is based on the insured’s life.
Upon the death of the insured, the trust uses a portion of the
life insurance death benefit to provide a final payout to the
charity. |
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| • |
The charitable federal income tax
deduction is calculated based on both the lead payment and final
payment to the charity, both which are set forth in the trust document
according to the donor’s desired charitable contribution. The charitable
income tax deduction is limited to 30% of adjusted gross income
(AGI) because it is considered a gift “for the use of” a charity.
Any unused deduction may be carried forward for up to 5 years.
If it is a gift of capital gain property or the charitable beneficiary
is a private foundation, the deduction is limited to 20% AGI. |
| • |
The donor contribution to the Enhanced Charitable
Trust is in part a taxable gift subject to federal gift tax. The
amount subject to federal gift tax is based on the total gift to
the trust less the amount of the charitable income tax deduction.
If available, the grantor could apply his/her lifetime gift tax
exemption to reduce or eliminate any gift tax. |
| • |
Internal Revenue Code 7520 provides an interest
rate used to value certain charitable interests in trusts for tax
purposes. |
| • |
The charitable income tax deduction provided in
this proposal is based on preliminary factors and should not be
relied on solely in the determination |
|
• |
The Enhanced Charitable Trust is
structured as a grantor deferred charitable lead annuity trust.
The donor/grantor receives an up-front charitable federal income
tax deduction and reports income generated by the trust on the
grantor’s tax return. |
| • |
A portion of the trust’s assets is invested in an
income-producing investment, such as municipal bonds for tax-free
income and the remaining amount is used to purchase life insurance.
The trust is the owner, payor, and the beneficiary of the life
insurance. The trust provides an annual lead payment to charity
during the trust term, which is based on the insured’s life.
Upon the death of the insured, the trust uses a portion of the
life insurance death benefit to provide a final payout to the charity. |
|
 |
| • |
The charitable federal income tax deduction
is calculated based on both the lead payment and final payment
to the charity, both which are set forth in the trust document
according to the donor’s desired charitable contribution. The charitable
income tax deduction is limited to 30% of adjusted gross income
(AGI) because it is considered a gift “for the use of” a charity.
Any unused deduction may be carried forward for up to 5 years.
If it is a gift of capital gain property or the charitable beneficiary
is a private foundation, the deduction is limited to 20% AGI. |
| • |
• The donor contribution to the Enhanced Charitable
Trust is in part a taxable gift subject to federal gift tax. The
amount subject to federal gift tax is based on the total gift to
the trust less the amount of the charitable income tax deduction.
If available, the grantor could apply his/her lifetime gift tax
exemption to reduce or eliminate any gift tax. |
| • |
Internal Revenue Code 7520 provides an interest
rate used to value certain charitable interests in trusts for tax
purposes. |
| • |
The charitable income tax deduction provided
in this proposal is based on preliminary factors and should not
be relied on solely in the determination of an individual’s tax
consequences. |
|
• |
The Enhanced Charitable Trust is
structured as a grantor deferred charitable lead annuity trust.
The donor/grantor receives an up-front charitable federal income
tax deduction and reports income generated by the trust on the
grantor’s tax return. |
| • |
A portion of the trust’s assets is invested in
an income-producing investment, such as municipal bonds for tax-free
income and the remaining amount is used to purchase life insurance.
The trust is the owner, payor, and the beneficiary of the life
insurance. The trust provides an annual lead payment to charity
during the trust term, which is based on the insured’s life. Upon
the death of the insured, the trust uses a portion of the life
insurance death benefit to provide a final payout to the charity. |
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