Charitable remainder unitrust example
Tom and Barbara own a lot on the coast that they have owned for many years. For many summers they would camp on the lot with their family. They have decided to do something with the property that would provide more income to them. They are 65 years old and recently retired.
The lot was purchased 20 years ago for $30,000 but is now worth $220,000.
They are considering a 6% unitrust to increase the potential of an increasing income stream over time and an increasing retirement income for them.
| Fair Market Value | $220,000 |
| Basis | $ 30,000 |
| Debt | $ 0 |
| Capital gain | $190,000 |
| Capital gains tax rate | 15% Federal + 9% Oregon = 23% |
| Potential capital gains tax (if property sold) | $ 43,700 |
| Value of asset to trust | $220,000 |
| Type of instrument FLIP | Standard Unitrust |
| Term of instrument | Donors' Lives |
| Rate of return | 6.0% |
| Tax deduction | $ 63,171 |
| Projected income | |
| Year 5 | $ 13,693 |
| Year 10 | $ 14,343 |
| Year 15 | $ 15,033 |
| Year 20 | $ 15,764 |
| Year 25 | $ 16,541 |
| Anticipated total return over trust term | $369,866 |
Amounts include benefit from growth of trust principal. Trust may continue beyond 25 years since the term is the donors' lives.
This information is provided for the planning purposes of the donor. It is recommended that the donor review all such information with his/her legal and financial advisors.
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