Forums Support Library CFP – Charitable Financial Planner Charitable Lead Unitrust Summary Report

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    • Kathleen Reynolds
      Keymaster
      Post count: 428

      CLUT Summary
      The deduction for a charitable contribution of a unitrust interest is limited to the fair market value of the unitrust interest on the date of contribution (Treasury Reg. §1.170A-6(c)(3)(ii)). The present value of the unitrust interest is determined by subtracting the present value of all interests in the property other than the unitrust interest from the fair market value of the transferred property (Treasury Reg. §1.170A-6(c)(3)(ii) and 20.2055-2(f)(2)(v)).

      The fair market value of a remainder interest in a charitable remainder unitrust is its present value (Treasury Reg. §1.664-4(a)(1); the present value is determined under this Section). An adjusted payout rate is determined by multiplying the fixed percentage payout by the appropriate payout sequence factor from Table F(1) (for transfers prior to May 1989) or Table F for the appropriate interest rate (for transfers after April 1989) which corresponds to the number of months by which the valuation date precedes the payout date.

      The program automatically enters the remainder factor that is governed by the type of calculation used (Term or Life). You can find the remainder factor in the IRS Publication 1458, Actuarial Values Beta Volume. When the remainder factor is computed, the present value of the remainder interest is obtained by multiplying the factor times the fair market value of the trust assets.

      The unitrust income interest is obtained by subtracting the present value of the remainder interest form the fair market value of the trust assets.

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