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Charitable Remainder Trusts A second technique for dealing with appreciated property is the establishment of a "charitable remainder trust" that will someday benefit a charity. The concept is fairly simple: One takes shares of low basis common stock upon which one would pay a big capital gains tax if sold and place them in a special trust for the charity. 
The assets are sold, but because they are sold by the charity and not you, there is no capital gains tax due. Then, the proceeds are invested in high yielding assets. Before you held a highly appreciated, low yielding asset. Now, you can specify in the trust instrument that you want to receive as a payout from the trust, either a specific amount annually, or a specific percent of the trust corpus -- say 8%. You get an immediate income tax deduction for setting up the trust, because the funds remaining in the trust pass to charity either on your death, or the death of husband and wife. This arrangement turns unproductive assets you cannot afford to sell into higher yielding ones, while giving you an income tax deduction against other income. Back
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