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When it comes to charitable remainder trusts (CRTs), Groucho Marx’s line from the 1930 movie Duck Soup is instructive: “Why, a four-year-old child could understand this report. Run out and find me a four-year-old child. I can’t make head or tail out of it.”1
This is the third article in our three-part series about charitable trusts. Our first article covered ugly tax schemes that caused trouble for donors and their advisors,2 and our second article discussed charitable remainder unitrusts (CRUTs) and charitable remainder annuity trusts (CRATs).3 To wrap up the series, we’ll explain the gift and estate tax rules and how to qualify for the CRAT and CRUT safe harbors. And how to fix up muck ups.
Gift Tax Rules
The income tax rules (previo...
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