A Charitable Remainder Trust (CRT) is another powerful financial tool for families selling a farm or ranch. It enables a family selling appreciated property to bypass tax on the sale and generate lifetime income for retirement. Not only can you bypass tax on the sale of land with a CRT, you can also bypass tax on the sale of livestock, crops, machinery and equipment.
Using a CRT to sell appreciated property can:
- Bypass taxes on the sale
- Decrease other income taxes with charitable deductions and credits
- Increase annual income for retirement
- Reduce or eliminate estate tax
- Increase wealth passed to heirs
- Create legacy gifts to favorite charities
How A Charitable Remainder Trust Works
You (the donor) establish a Charitable Remainder Trust (CRT) and transfer assets (e.g., land, livestock, crops, machinery, equipment) to the trust, removing the assets’ values from your estate. The trustee of the CRT then sells the assets and, since the trust is a tax-exempt entity, there are no income taxes due upon the sale. The proceeds from the sale are then invested within the trust in a manner designed to provide a lifetime income for the beneficiaries. Two sets of beneficiaries are established, the income beneficiaries (generally the donor and his or her spouse), and the remainder beneficiaries (the charity or charities that will receive whatever assets remain in the trust after the income beneficiaries die.)
To schedule a free consultation, call 800-517-1031.