Tax Exempt Family Foundations:
A trend that may increase the attraction of the
charitable remainder trust is the U.S. Congress'
constant fiddling with the tax code.
While CRTs are not in any danger, as of January 1,
1995 the tax avoidance value of contributions of
appreciated property to a tax-exempt qualified family
foundation has undergone a profound change. Prior to
that date the worth of such gifts was calculated at
current market value for charitable income tax
deduction purposes. Now they will be valued only at
original cost to the donor, a considerable come down in
tax advantage. The prospects of a congressional move
to repeal this change are uncertain at best.
Of course such appreciated property gifts can
obtain full current market value deductibility if
donated to a qualified CRT, and in a sense while the
money saved may not go to a family foundation, it will
still be "all in the family."
