> I would abolish charitable remainder trusts from the tax code.
They've been reducing the scope of new trusts over time. When I looked into it around 2014, a young person couldn't actually make a lifetime income CRUT because the requirement for 5% distribution, and the low interest rates at the time made the actuarial calculations show a zero balance for the charity at the end, but you need to show at least 10% for the charity at the end. A fixed term just doesn't seem as good.
I ended up just paying federal cap gains and CA income on most of it, but I did donate some of the near $0 basis stock to a DAF, and sold a small portion of the equity after moving to WA. Some of that was QSBS which was nice, but having seen the 2001 stock market, leaving it undiversified to save on taxes didn't seem worth it.
Charitable remainder trusts are setup as irrevocable, if properly drafted. It would be difficult to equitably unwind them after the fact.
Changing how CRUTs are treated ex-post facto would also raise doubts about how Roth IRAs will be treated. There's already people who don't trust that the federal government will keep those tax free.
There are all sorts of decisions made based partially on taxes that the government later changes going forward. And those changes cause a ton of issues. Just seems like should all be one way or the other.
They've been reducing the scope of new trusts over time. When I looked into it around 2014, a young person couldn't actually make a lifetime income CRUT because the requirement for 5% distribution, and the low interest rates at the time made the actuarial calculations show a zero balance for the charity at the end, but you need to show at least 10% for the charity at the end. A fixed term just doesn't seem as good.
I ended up just paying federal cap gains and CA income on most of it, but I did donate some of the near $0 basis stock to a DAF, and sold a small portion of the equity after moving to WA. Some of that was QSBS which was nice, but having seen the 2001 stock market, leaving it undiversified to save on taxes didn't seem worth it.