Because establishing a CRAT
can significantly reduce estate taxes, the CRAT
's effect on estate planning will be unknown until the tax picture is clarified for 2011 and beyond.
D recognizes $200,000 income ($400,000 (liability) - $200,000 (basis)) on the transfer of land to the CRAT
The second step in the process of calculating the value of the remainder interest in a CRAT
is to determine the appropriate factor for valuing the annuity interest from the IRS valuation tables.
The issue was eventually settled by a court order, stating that the estate taxes due on the CRAT
would be payable from another trust created by the decedent prior to death.
The present value of a CRAT
remainder, interest is a function of the ratio of the payment amount to the initial value of trust assets, the trust term and the Sec.
664-3(a)(1)(i)(g) provides that, for CRATs
and fixed-percentage CRUTs, the annuity or unitrust amount may be paid within a reasonable time after the close of the year for which due if (1) the character of the annuity or unitrust amount in the recipient's hands is income under Sec.
Thus, a CRAT
cannot convert to a CRUT without losing its status as a CRT.
664-2 and -3, for administrative convenience, a trustee must pay a CRUT or CRAT
amount within a reasonable period following the close of the trust's tax year.
Another alternative is to bequeath TDV assets to a CRAT
or CRUT with the income level and term set to maximize the benefits to heirs.
THE DONOR'S CHARITABLE CON1 RIBU I ION FOR funding a charitable remainder annuity trust (CRAT
) is the value of the property placed in the CRAT
less the present value of the CRAT
's annuity payments.
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also held listening sessions outside the South, however, and found amazingly similar accounts.