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Gift example*
You are considering a gift to Children's of $250,000, but you are concerned about the capital gains consequences of liquidating assets, and reducing your and your spouse's cash flow.
You and your spouse, ages 70 and 68, own a small commercial building that has doubled in value and consequently generated several offers to purchase. You decide to place the building into a net-income unitrust that will pay 5% of the trust's value for your lifetime (initially from the rental income from the building, then a percentage of the proceeds of its sale) to the two of you. The remainder of the unitrust will go to Children's .
What are your benefits?
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Comparison |
Unitrust |
Private Sale |
|
Amount transferred |
$250,000 |
$250,000 |
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Capital Gains Tax (@15%): |
0 |
$18,750 |
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Net for reinvestment |
$250,000 |
$231,250 |
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First year's income |
$12,500 |
$11,562 |
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Charitable deduction |
$101,935 |
0 |
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Tax savings @ 33% rate |
$33,639 |
0 |
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Total benefit, first year |
$46,139* |
$11,562 |
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Unitrust payment plus tax savings from charitable deduction |
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Click here to calculate the benefits a unitrust would give you. |
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*This example is based on a factor that changes monthly. Contact our office for a personal illustration based on the latest rates. |
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Note: The Unitrust is not the only gift plan that pays you lifetime income. Compare its benefits with those of the annuity trust and the gift annuity. |
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For more information
E-mail us, complete the personal illustration form, or call us at (617) 355-8062 so that we can assist you through every step of the process.