Howard and Lynn were age 55 when they purchased some land outside of town. They thought it would be a good investment that they could later sell for a higher price.
Over the years, development from town has moved toward the property and their land is now next to a large commercial store. They now rent the property to the commercial store for overflow parking.
Howard: We have owned this property for over 10 years. It has been a good investment and increased in value. We have received just enough rental income in the last few years to pay the taxes. However, we now would like to sell.
Lynn: It would be nice if we could sell without paying a large tax. Our tax advisor has told us that if we were to sell, there would be a large capital gains tax. We also could use some tax deductions this year.
The good news is that Howard and Lynn were able to create a special trust called a charitable remainder unitrust and receive three very nice benefits.
- Bypass capital gain
- Increase income
- Charitable deduction
Howard: We are delighted with our unitrust. With our unitrust, we saved about $36,000 in capital gains tax and almost $18,000 in income taxes. That is over $54,000 in tax savings!
Lynn: Plus, we increased our income. The land was producing almost no income before. Now, we receive over $12,000 in income each year. This increased income is one of my favorite parts of the plan.
*Please note: The name and image above is representative of a typical donor and may or may not be an actual donor to our organization. Since your unitrust benefits may be different, you may want to click here to view a color example of your benefits.
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.