Charitable Remainder Trusts
9. Example: Income After Sale Without CRT
If they sell the stock for its full market value of $500,000 as shown here, they would have a gain of $400,000 and would have to pay $60,000* in capital gains tax - 15% of $400,000 is $60,000. That would leave them with $440,000 to re-invest.
Using a 6% return, this would provide them with an annual income of $26,400. If we multiply this by their life expectancy of 26 years, we get a total lifetime income before taxes of $686,400. Of course, there is no charitable tax deduction if they sell the stock themselves.
*NOTE: The top capital gains rate on assets held for more than 12 months is now 15%.