The following example compares the results for an individual selling an asset and investing the after tax proceeds against the results for contributing the same asset to a Charitable Remainder Trust for his or her benefit. Costs of sales are not included in the example.
If you sell vacant land worth $1,100,000.00, which you bought for $100,000.00 and your investment goal is a five percent (5%) annual return, the result would be:
$1,100,000.00 minus $300,000.00 ($1,000,000.00 gain x 30% tax) = $800,000.00. Your annual income would be $800,000.00 x 5% = $40,000.00 per year.
If you contribute the asset to a Charitable Remainder Trust paying 5% per year, the result, after the trust sells the asset, would be:
$1,100,000.00 x 5% = $55,000.00 annual income the first year (later years may vary). You will also receive a substantial charitable income tax deduction in the year of your contribution; for example, a single person aged 75, under these circumstances, would receive a charitable income tax deduction in the range of $650,000.00, the unused portion of which, if any, may be carried forward for 5 years.
At the termination of the Charitable Remainder Trust, the remaining assets will pass to LA Opera, where your gift will help to bring beauty and drama of opera to future generations.
The foregoing is a general summary; results may vary based on individual circumstances.
For more information please contact Howard Moss, Senior Planned Giving Officer, at (213) 972-3141 or email email@example.com