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Howard and Janet were age 55 when they purchased some development land outside of town. They thought it would be a good investment that they could later sell for a higher price.
Over the years, development from town has moved toward the property and their land is now next to a large commercial store. They now rent the property to the commercial store for overflow parking.
Howard: We have owned this property for over 10 years. It has been a good investment and has increased in value. We have received just enough rental income in the last few years to pay the taxes. However, we now would like to sell.
Janet: It would be nice if we could sell without paying a large tax. Our tax advisor has told us that if we were to sell, there would be a large capital gains tax. We also could use some tax deductions this year.
The good news is that Howard and Janet can use a charitable unitrust to receive three very nice benefits. The benefits are:
Howard: We are delighted with our charitable unitrust. With it, we saved about $36,000 in capital gains tax and almost $18,000 in income taxes. That is over $54,000 in tax savings!
Janet: Plus, we increased our income. The land was producing almost no income before. Now, we receive over $12,000 in income each year. This increased income is one of my favorite parts of the plan.
Howard: The benefits of the charitable unitrust to us are outstanding, and we are especially thrilled to know that the funds remaining in the unitrust after our deaths will benefit many more people through the work of the charitable organization that will receive them.
*Please note: The story, names and image above represent an example of the benefits of this type of estate planning tool. They do not represent actual donors to Gospel for Asia.
Since the amounts of your charitable unitrust benefits may differ from the scenario above, you may want to click here to calculate your benefits based on your age.
Gospel for Asia's Charitable Unitrusts are administered by WaterStone and can be funded with cash, securities or real estate with a minimum value of $100,000. Income payments from a charitable unitrust may be received quarterly or annually.