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Charitable Remainder Annuity Trust
(Gift example*)

Example

A 72-year-old donor in the 33% tax bracket establishes an annuity trust with $100,000 of appreciated stock, originally purchased for $50,000. The trust pays the donor $5,000 per year (5% of the initial trust value) and earns a 6.0% average total return over the donor's lifetime. Assume an IRS discount rate of 2.2% in the month the trust is created.

Trust principal

$100,000

Income tax deduction

$46,098

Income tax savings (33%)

$13,892

Annual income

$5,000

Projected after-tax benefit to donor

$47,699

Projected benefit to Law School

$116,870



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The materials provided in this website and the examples contained herein are for illustration purposes only and are not intended as legal or tax advice. We encourage you to consult your own legal and tax advisor.