October 17, 2002 | Read Time: 1 minute
The Internal Revenue Service says it received 99,869 informational tax returns in 1999 from charitable remainder trusts, a popular form of planned gift. That’s an increase of 14,809 over 1998, the first year the IRS published a study of the trusts.
Of the total returns in 1999, 21,630 were filed by charitable remainder annuity trusts, and 78,239 by charitable remainder unitrusts. By comparison, 20,137 charitable remainder annuity trusts and 64,923 charitable remainder unitrusts filed returns in 1998.
In an annuity trust, a donor transfers cash, stock, or property to the trust, which then provides a yearly fixed payment — equal to at least 5 percent of the value of the asset at the time the gift agreement was made — to the donor, a beneficiary, or both. After the donor and any beneficiaries have died, the trust assets go to charity.
In a unitrust, a donor puts a contribution in the trust, which then makes regular payments to a donor or other beneficiary based on a fixed percentage of the fair market value of the net assets of the trust as they are valued each year. After the beneficiary dies, or a trust limited to a certain number of years expires, the remainder of the trust goes to charity.
Charitable annuity trusts reported ordinary income, excluding capital gains or losses from stock sales, of $300-million in 1999. Charitable remainder unitrusts reported total assets of more than $81-billion.
The report appears in the IRS Statistics of Income Bulletin for summer 2002. The summer bulletin is available for $38 from the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, Pa. 15250. It can be ordered by phone at (202) 874-0410, or by sending an e-mail to sis@irs.gov.
