section 1 - The American College Online Learning Center

13. Overview14. Types(2) The donor seeks to avoid the startup and ongoing administration expenseof a charitable remainder unitrust(3) The donor lacks investment acumen to manage a charitable remainderunitrust and desires the professional investment management of thepooled-income funda. Charitable remainder trust(1) Donor gifts cash or assets(2) Do deduction for present value of remainder interest(3) Income (fixed for CRAT; variable for CRUT) paid back to donor(4) Remainder to charity at end of the trust termb. Charitable gift annuity(1) Donor gifts cash or assets(2) Often used for gifts of $50,000 or even less(3) Charity itself is the payer; no trust involved(4) Deduction is for remainder interest(5) Income paid to donor is first treated as ordinary income or capital gain;balance is tax-free return of principal during donor’s life expectancyc. Pooled-income fund(1) Donor gifts cash or assets into commingled fund with assets from otherdonors(2) Donor paid her pro rata share of income like a mutual fund owner(3) Receives deduction for the present value of remainder interest(4) Income retains its character as dividends or interest(5) Income may never be tax-free; may not accept tax-exempt bonds(6) Remainder of fund passes to charity sponsoring the PIFa. Charitable remainder trust(1) Charitable remainder annuity trust (CRAT)(2) Standard charitable remainder unitrust (STAN-CRUT)(3) Variations of the standard charitable unitrust (STAN-CRUT)b. Charitable gift annuity(a) Net income charitable remainder unitrust (NICRUT)(b) Net income with makeup charitable remainder unitrust (NIMCRUT)(c) Flip unitrust (FLIP-CRUT)(1) Immediate payment(2) Deferred — for at least one year or a deferral period certain(3) Flexible — deferral for at least year with an election period permittingdetermination of commencement of paymentsc. Pooled-income fund4.31