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Notice: Changes to Technology

We are pleased and excited to announce significant changes to CharitablePlanning.com. Though you may not realize it at first glance, the website has been completely redone as part of our ongoing efforts to better serve our users.

Improvements include:

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  • More mobile friendly. View from your cell phone or tablet.
  • Advanced calculations. More than two lives. Shorter of and greater of term or lives.
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  • Contributing authors. View their biographies and commentary.

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CharitablePlanning.com is an online tool for planning professionals seeking to manage their research, save time and make educated decisions. In addition to a fully searchable library, useful calculations and personal file management, subscriptions include daily commentary from our team of experts on important events, as well as access to the definitive Handbook on the field of Charitable Planning.

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Recent Commentary

LLC Owned by a Flip-CRUT

Thursday, October 22, 2020
Historical

By transferring highly appreciated stock to a Flip-CRUT, which creates a single member LLC to hold the stock and other investments, taxpayers can control the Flip-CRUT's income flow, defer capital gains tax, and make gifts to charities.

Charitable Remainder Trusts and the "Simplified Method" for Reporting the Section 1411 Net Investment Income Tax

Tuesday, March 4, 2014

In 2010, Congress enacted the Health Care and Education Reconciliation Act of 2010, creating new IRC § 1411, which imposes a 3.8% surtax on the net investment income of individuals, estates, and trusts. In December 2012, the IRS issued proposed regulations that included a method (the Simplified Method) for charitable remainder trust (CRT) trustees to capture and report net investment income to the trust's non-charitable income beneficiaries. Final regulations issued in December 2013 took a different approach, but in new proposed regulations issued at the same time, the Simplified Method was retained as an alternative election.

The Simplified Method works as a complement to the pre-existing "four-tier" structure used by CRTs for income tax reporting. Under the Simplified Method, all net investment income (NII) received after December 31, 2012, is aggregated on a cumulative basis and distributed before excluded income. A trustee should consider electing the Simplified Method when the trust's income beneficiaries do not meet the applicable modified adjusted gross income threshold or when the trust has realized or realizable capital losses coupled with a short expected remaining term.

Rate for Charitable Calculations Remains at 0.4%

Wednesday, October 21, 2020
Rates / Tables / Statistics

In Rev. Rul. 2020-22, the Service announced the Section 7520 rate for November will remain at .4% rate, a historic low, for the fourth month in a row. The average rate for 2019 was 2.6%, while the average rate thus far for 2020 is 1.0%.

IRS Updates Applicable Federal Rates for November 2020

Friday, October 16, 2020

The IRS has announced the Applicable Federal Rates for November 2020, including the Section 7520 rate of 0.4%.