Charitable Remainder Trust

Avoid Capital Gains Tax with a Charitable Remainder Trust
If you want to increase your current income, consider a gift that pays you back! A charitable remainder trust may allow you to make a substantial gift to Coeur d'Alene Homes while still providing for your personal financial needs. A trust is attractive to many donors because it offers substantial tax benefits and may increase your cash flow. You can transfer either appreciated securities or real estate into the trust. The trust then sells the property, which allows you to avoid capital gains tax on the sale. You will receive an income stream from the trust for the rest of your life or a stated term of years. At the end of the trust term, the remainder of the trust is distributed to Coeur d'Alene Homes.

The benefits of a charitable remainder trust are:

• Annual income for life or number of years,
• Avoidance of capital gains tax on appreciated property,
• Income tax deduction,
• Potential reduction of estate tax, and
• Significant gift to Coeur d'Alene Homes.

Example: For many years, John's grandmother was a resident of Coeur d'Alene Homes and soon his mother will become a resident. John has owned a rental house for many years. He and his wife, Sally, manage the rental. Now they are facing retirement and would prefer to travel instead of repairing leaky faucets. After much discussion with their advisors and the Coeur d'Alene Homes Development Department, they decide to donate the property to a charitable remainder trust. Because the trust is in charge of selling the property, John and Sally do not have to pay capital gains tax on the appreciation. That saves them quite a bit in capital gains taxes.

As a result of their generosity, John and Sally will receive a payment of 6% of the trust’s value each year for the rest of their lives. They will also receive an income tax deduction for a portion of the gift. At their death, the remaining balance in the trust will benefit the residents of Coeur d'Alene Homes. John is thrilled that he is able to avoid the capital gains tax, be free to travel, and make a meaningful gift to Coeur d'Alene Homes where his grandmother and now his mother have received loving quality care.