Ongoing stewardship of a life income gift donor can sometimes include revisiting whether the cashflow from a remainder trust or a gift annuity is still meaningful within the donor's larger financial picture, or whether that income stream might itself be the source of a further deductible gift. This session will present two case studies—one involving the commutation or surrender of a portion or all of the income interest in a charitable remainder trust, outright or in exchange for a gift annuity, and another involving the assignment to the issuing charity of a portion or all of a gift annuity. In each case, we will discuss the tax treatment of these transfers, and we will reflect on some of the planning that might have been done at the outset to anticipate the possibility that the donor might decide at some point to accelerate the remainder gift.
- Identify situations in which the commutation or surrender of an income interest in a remainder trust or the assignment of a gift annuity might be indicated.
- Describe the basic tax consequences of each of these transactions, and identify unresolved issues.
- Be aware of several potential state law issues affecting each of these transactions.
Donor Relations, Gift Design, Program Administration
Expanding Expertise, Enhancing Program
Accelerating the Remainder Gift: Two Case Studies363 KB
Syllabus 3.01.03; Syllabus 3.01.04; CGP2018