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Bill
Bill, Enrolled Agent
Category: Tax
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Experience:  EA, CEBS - 34 years experience providing financial advice
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Where do I claim a Charitable Remainder Unitrust deduction

Resolved Question:

Where do I claim a Charitable Remainder Unitrust deduction on my Federal return and what substantiation is required?
Submitted: 4 years ago.
Category: Tax
Expert:  Bill replied 4 years ago.
Have you established and contributed to a Charitable Remainder Unitrust (CRUT) this year?
Customer: replied 4 years ago.
Yes, a crut was established in 2008 and the attorney gave us a deduction summary with the amount of our charitable deduction
Expert:  Bill replied 4 years ago.

Your charitable deduction amount would be claimed on Schedule A of your Form 1040. Your total charitable contributions for the year are limited to 50% of your adjusted gross income (AGI). However, the contributions may be limited to 30% if assets with long term capital gains were contributed. If your contributions exceed the limits then the excess amount can be carried over and deducted in future years (limited to 5 years).

 

Lines 16 and/or 17 - http://www.irs.gov/pub/irs-pdf/f1040sab.pdf

 

Customer: replied 4 years ago.
I need more detail as follows: Because of the size of the deduction I will need to use form 8283
What should I list for where the deduction came from, the name of the CRUT or the 4 charities who will receive the donation when the trust ends?
Expert:  Bill replied 4 years ago.

If the securities are publicly traded then you would complete Section A of Form 8283 and enter the name and address of the CRUT in column (a). You would also complete columns (b) - (h). Since the form is not formatted for CRUTs or CRATs you would need to add columns with additional information such as the remainder deduction factor and multiply this factor by the fair market value of the asset. This information could all be included as an attachment and referencing the attachment on the applicable lines. You should also include the deduction summary from the attorney.

 

If property other than marketable securities was contributed then Section B would need to be completed.

 

The CRUT trustee would sign Part IV.

 

http://www.charitabletrust.com/Newsletter/Newsletter_Archive/Supporting-Documents/8283_Deduction.pdf

 

http://www.irs.gov/pub/irs-pdf/f8283.pdf

 

http://lssne.giftlegacy.com/giftlaw/casewk.jsp?WebID=GL2009-2031&D=200927

 

 

 

Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3078
Experience: EA, CEBS - 34 years experience providing financial advice
Bill and 7 other Tax Specialists are ready to help you
Customer: replied 4 years ago.
Thank you Bill, that is very helpful

I have been using TurboTax Premier to do the Fed Taxes, do you know if I will be able to take this deduction on their software? I think I may have to add the 8283 separately and recalculate the total deductions manually
Expert:  Bill replied 4 years ago.
I don't use TurboTax (I use another software) but you should be able to enter the information and the form should be automatically completed. But since the form is not designed for CRUTs, you will have to make the adjustments for the remainder factor manually or through an attachment.
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3078
Experience: EA, CEBS - 34 years experience providing financial advice
Bill and 7 other Tax Specialists are ready to help you

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