Are you sitting on a veritable gold mine in stocks or real estate? Or maybe you’re planning to sell your business interest for a tidy sum. In any event, you’ll have to pay the tax piper one way or another through income tax, estate tax or gift tax, or a combination of all three.
Fortunately, there’s a way to create a triple tax bonanza with just one stroke of your pen.
Strategy: Set up a charitable remainder trust (CRT). Not only do you slash your family tax bill, you reward a deserving charity. You win, the charity wins … and Uncle Sam loses.
As an added incentive, a CRT can help avoid the new 3.8% Medicare surtax (see box below).
Here’s the drill: You transfer appreciated property—like stock, real estate or a business interest—to a trust set up to last for your lifetime or a specific term of years. The trust provides payments to the designated “income beneficiary” (e.g., you or your spouse) during the CRT’s existence. ...(register to read more)