IRS Approves CLAT with Increasing Payout

Since the issuance of sample charitable lead annuity trust (“CLAT”) forms in Revenue Procedure 2007-45, 2007-29 I.R.B. 89, sophisticated charitable gift planners have been fascinated with the planning possibilities of a CLAT with a payout that increases over the term of the trust. That ruling indicated that a CLAT, unlike its charitable remainder trust counterpart (the CRAT), need not have an unchanging, level payout over the term of the trust. Now, in PLR 201216045, the IRS has again indicated its acceptance of this principle. Continue…

Final Regs on CLT Income Allocations

IRS has issued final regulations under IRC §642(c) detailing the consequences of an ordering provision in a trust or will that purports to govern the character of amounts paid to a charitable beneficiary.  This will affect charitable lead trusts (CLTs) in particular, but other trusts or estates that make payments or permanently set aside amounts for a charitable purpose will also have to take these rules into account. Continue…

It’s been a relatively slow news period for charitable gift planners so far this year, with few rulings, cases or other developments of significance. Nevertheless, there have been some minor developments, and in this issue we will review some of those.

A Bit of Motion on Extenders?

The Charitable IRA and other charitable tax incentives (for certain inventory and conservation donations) that were extended through the end of 2011 by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312), are so far unavailable for contributions made this year. These are part of a group of more than 50 tax provisions that have expired and are currently awaiting Congressional action. And of course, like everything else in that position, their fate is unclear at present. Continue…