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February 18, 2009

Charitable Remainder Trust (CRT)



A trust where the donor transfers assets to an annuity trust or unitrust. Under a CRT , The pays the donor or another beneficiary receives payments of a certain amount each year for a specified period. The term of the trust is limited to the longer of 20 years or the life of the designated recipients, at the end of which  the remaining trust assets must be distributed to a charitable organization.

Contributions to the charitable remainder trust can qualify for a charitable deduction. This charitable contribution deduction is limited to the present value of the charitable organization’s remainder interest

Referring Cite

Revenue Procedures 89-20, 89-21, 90-30, and 90-31.

Additional Helpful Information

  • Designating a CRT as the beneficiary of a retirement account may mean that beneficiaries of the trust are not eligible for the income in respect of a decedent (IRD) deduction for post-death distributions. Private Letter Ruling 199901023
  • Revenue Ruling 2008-41 provides taxpayers with guidelines on dividing a charitable remainder trust (CRT) into two or more separate and equal CRTs without violating the provisions of § 664 of the Internal Revenue Code.

Keep Learning

Qualified Charitable Distribution (QCD)

Definition A distribution that is excludable from the distributee’s income, as a result of meeting the following requirements: It is made after the distributee reaches

Saver’s Credit

Definition Also known as the Saver’s Tax Credit: Nonrefundable tax credit available to eligible individuals who make contributions to their retirement account. The saver’s credit

Catch-up Contribution

Definition An additional contribution that can be made to a retirement plan by a participant who is at least age-50 by the end of the

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IRA Rules