A charitable remainder trust pays you income for a set term, then gives what is left to charity. This calculator estimates your annual CRUT income, the present-value charitable deduction, and the remainder that ultimately reaches the charity.
| Assets | Payout | Term | Growth | Charitable Deduction | Remainder to Charity |
|---|---|---|---|---|---|
| $1,000,000 | 5% | 20 yr | 6.0% | $324,846 | $1,220,190 |
| $500,000 | 5% | 20 yr | 6.0% | $162,423 | $610,095 |
| $2,000,000 | 5% | 20 yr | 6.0% | $649,692 | $2,440,380 |
The deduction is the present value of the charity's future remainder, discounted at the IRS §7520 rate (5% assumed). Rows generated from the same formula the calculator uses.
A charitable remainder trust (CRT) is a split-interest trust: you (or a named beneficiary) receive a stream of payments for a term, and a qualified charity receives whatever remains. Because the charity's interest is irrevocable, you get an immediate income tax deduction equal to the present value of that remainder — while deferring or avoiding capital gains on appreciated assets placed in the trust.
| Feature | CRUT (unitrust) | CRAT (annuity trust) |
|---|---|---|
| Payment basis | Fixed % of trust value, revalued yearly | Fixed dollar amount, set at funding |
| Inflation protection | Yes — payments rise with trust value | No — fixed forever |
| Additional contributions | Allowed | Not allowed |
| Payout range | 5%–50% | 5%–50% |
Your deduction is the present value of the remainder, computed using IRS actuarial tables and the §7520 rate for the month of transfer. A higher payout rate and longer term both shrink the remainder and therefore the deduction:
Deduction = FMV − Σ [ Paymentt ÷ (1 + §7520)t ]
The classic CRT donor holds highly appreciated, low-basis assets — say a $1 million stock position with a $100,000 cost basis. Selling outright triggers roughly $180,000 of federal capital gains tax at 20% plus NIIT, leaving less to invest. Contributed to a CRUT instead, the trust sells the asset tax-free, reinvests the full $1 million, and pays the donor a percentage of the growing balance each year. The donor receives a charitable deduction now, a lifetime income stream, and the satisfaction of a large gift.
What the donor gives up is control: the remainder is irrevocably the charity's, and the trust cannot be unwound. The economics work best when the trust earns more than the payout rate — the surplus compounds for the charity, and in a unitrust the donor's payments rise alongside it. For donors already charitably inclined with a concentrated low-basis position, the combination of capital gains avoidance and an immediate deduction often makes the after-tax cost of the gift far lower than writing a check.
⚠️ Important: Deduction amounts depend on IRS actuarial tables and the §7520 rate for your month of transfer; figures here are estimates. CRTs involve complex tax rules, the 10% remainder test, and self-dealing restrictions. Work with a qualified estate attorney and CPA.