A CHARITABLE TRUST is an irrevocable trust established for charitable purposes, whereby the donor maintains an economic interest in the donation and derives a material benefit.

Benefits to Donor
  • Fixed Return. Donor receives a fixed return (income) for as long as you wish.
  • Immediate Tax Deduction. Donor receives an immediate income tax deduction.
  • Deferred Capital Gains. There is no capital gains tax applied on the transferred securities in the trust.
  • Non-Taxable Income. A portion of the annuity payments aren’t taxable; it is treated as the return of the principal Donor gave to the charity until you reach your statistical life expectancy
  • Long Term Gifting. You will support your charitable interests for the long-term since the principal amount of your gift is not spent; rather it is invested and grows through time to benefit the organization and yourself.
  • Legacy. You will create a legacy of assisting IRUSA Waqf through this gift

Example:

Ahmed currently owns stock worth $100,000 that he purchased 20 years ago for $25,000.

  • He transfers it to a CRT, naming himself as the income beneficiary for the next 10 years at a rate of 5% and the charity as the remainder beneficiary. He is now eligible for an income tax deduction of the net present value of the future interest the charity would receive at the end of 10 years.
  •  The Trustee then sells the stocks and invests in an income producing asset. No capital gains tax is due on the sale.
  • Ahmed receives the income (taxable) for the next 10 years of $5,000 per annum, after which the charity receives the remaining asset.