Charitable Remainder Unitrust (CRUT) Calculator
Model income and tax benefits of a charitable remainder unitrust (CRUT).
Charitable Strategy
Current Strategy
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A charitable remainder unitrust (CRUT) is a planning tool for someone holding a highly appreciated asset (stock, real estate, a business interest) who wants income now, a tax deduction today, and a gift to charity later. You contribute the asset to an irrevocable trust, which can sell it without triggering capital gains tax up front, pays you a percentage of its value each year for life or a set term, and leaves the remainder to charity.
This calculator values the charitable remainder using the official IRS actuarial method to find your up-front deduction, then projects the trust year by year and compares it against simply selling the asset today.
How does this calculator work?
Choose the trust type (one life, two lives, or a fixed term), enter the ages or term, the value and cost basis of the asset you're contributing, the trust's growth and payout rates, your tax rate, and the IRS §7520 rate for the month of the gift.
The calculator values the charitable remainder under IRS §1.664-4 using the official mortality table (Table 2010CM) to find your up-front income-tax deduction, then projects the trust year by year and compares it to simply selling the asset today (the "current strategy").
It shows the deduction, the tax savings, your after-tax income, and how much is ultimately left to your beneficiaries under each strategy.
Worked example
Contribute $1,000,000 of stock with a $200,000 cost basis to a one-life CRUT for a 70-year-old, paying 5%, versus selling the stock outright. (Assumes the calculator's default 5% IRS §7520 rate.)
- Asset value / cost basis
- $1,000,000 / $200,000
- Capital gain if sold directly
- $800,000
- Tax deferred into the trust
- no up-front capital-gains tax
- Annual payout (5%)
- $50,000/yr
- Up-front charitable deduction
- $525,989
How the numbers work
Sell the stock yourself and you'd realize an $800,000 gain ($1,000,000 − $200,000 basis) and owe capital-gains tax on it immediately, leaving less to reinvest.
Contribute it to the trust instead and the trust sells it with no up-front capital-gains tax, so the full $1,000,000 stays invested. A 5% unitrust then pays you $50,000 in year one, recalculated against the trust's value each year after.
Your up-front charitable deduction is the contribution times an IRS remainder factor, driven by the payout rate, your life expectancy, and the §7520 rate, representing the portion projected to reach charity at the end. For this 70-year-old at a 5% payout, that deduction is $525,989.
Selling directly would trigger capital-gains tax on the $800,000 gain immediately, shrinking the amount left to reinvest. The CRUT lets the full $1,000,000 go to work, paying you 5% a year and giving you a deduction today, though the remainder ultimately goes to charity rather than your heirs.
The trade-off is access and legacy: the trust is irrevocable, and what's left at the end benefits charity, so a CRUT suits charitably-inclined owners more than those whose main goal is passing assets to family.
Charitable Remainder Unitrust (CRUT) Calculator glossary
- Trust Type
- Whether the trust runs for one life, two lives, or a fixed term: it sets the actuarial basis for your deduction.
- Trust Withdrawal Rate
- The unitrust payout rate: the percent of the trust's value paid out to you each year (minimum 5%).
- IRS §7520 Rate
- The rate the IRS publishes monthly (always a multiple of 0.2%), used to value the charitable remainder and your deduction.
- Contribution Cost Basis
- What you originally paid for the contributed asset, used to compute the capital-gains tax a sale would trigger.
- Income Tax Deduction
- Your up-front charitable deduction: the contribution multiplied by the IRS remainder factor.
- Value Left to Beneficiaries
- The total value passing to your heirs at the end, shown for both the charitable and current strategies.
- Irrevocable Trust
- A trust that can't be changed or undone once created: the structure a CRUT uses, which is why the decision is permanent.
- Remainder Beneficiary
- The charity that receives whatever is left in the trust at the end of the term or your life.
- Capital Gains Tax
- The tax on selling an appreciated asset; a CRUT lets the trust sell without you owing it up front.
- Unitrust Payout
- A payout recalculated each year as a fixed percentage of the trust's current value, so income rises and falls with the trust.
Charitable Remainder Unitrust (CRUT) Calculator FAQs
How is the charitable deduction calculated?+
It's the contribution times the IRS remainder factor for your trust type, payout rate, ages or term, and the §7520 rate, computed from the official §1.664-4 actuarial method and Table 2010CM mortality table.
Why does a CRUT avoid capital gains tax?+
Because you donate the appreciated asset to the trust rather than selling it yourself, the trust can sell it without you owing capital gains tax up front, leaving more to grow and pay out.
What payout rate can I choose?+
A unitrust payout must be at least 5%. Higher payouts give you more income but a smaller charitable deduction and less left for charity.
Is a CRUT right for everyone?+
No. It's irrevocable and the remainder goes to charity rather than heirs, so it best fits charitably-minded owners of highly appreciated assets. Given the complexity and the actuarial and tax rules involved, set one up with an estate-planning attorney and tax advisor.
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