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Sale and Unitrust

Are your appreciated assets, such as personal or commerical real estate, producing little or no income? If you sell your appreciated assets, you will pay a large capital gains tax. A sale and charitable remainder unitrust may be the solution to mitigate or avoid capital gains tax.

Benefits of a sale and unitrust

• Receive cash from the sale. You can use this cash to purchase another residence, to save for retirement, to travel, to meet your daily needs or to meet some other financial goal.
• Receive income from the unitrust for life or a term of years.
• Obtain an income tax deduction that may reduce your tax bill in the year of the sale.
• When transferring a portion of your primary residence to fund a unitrust, you may apply your one-time home exclusion to reduce or eliminate capital gains tax that would otherwise be due from the sale.

How a sale and unitrust works

1. You establish a charitable remainder unitrust
2. You transfer a portion of an asset to the unitrust.
3. The asset is sold.
4. You receive a portion of cash from the sale, and a portion is paid to the unitrust.
5. The unitrust will provide you with income for the rest of your life.
6. You receive a charitable deduction on the portion paid to the unitrust that will offset the tax on the cash that you receive from the sale.

Next Steps:

1. Contact UIndy's Office of Gift Planning at 317-791-2553 or [email protected] for additional information on a sale and unitrust or to speak with Darcy about which life income gift is right for you.
2. Seek the advice of your financial or legal advisor.