How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask BK-CPA Your Own Question

BK-CPA
BK-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 818
Experience:  Owner of a CPA firm
36384704
Type Your Tax Question Here...
BK-CPA is online now
A new question is answered every 9 seconds

I received an inheritance 5 years ago. It was commercial property

Customer Question

I received an inheritance 5 years ago. 27 relatives sold the land, keeping the mineral rights. My share was 430K. It was commercial property so I invested half the funds I received at the sale in rental property. I put $200K into a Charitable Remainder Trust as recommended by my CPA. It was in bonds and mutual funds. I told him I didn't want to be in the stock market. When the big drop occurred, I lost over half my investment. He did not warn me when the downhill slump began. When I realized what had happened, I pulled the mutual funds and put $79K into a Met Life Variable Annuity and 4K into the Wells Reit Fund. I'm losing more money as the bonds aren't doing well and the met life variable annuity has also lost money. I have spoken with a trusted financial advisor and wish to put the funds into a Fixed Annuity. I do not have any confidence in my CPA and cannot afford to lose any more money. I am 72. Can I dissolve the Charitable Remainder Trust and just put it in the name of my own trust? If so, would I pay heavy taxes as my CPA says I would? Can I dissolve the bonds and put them into the Fixed Annuity Fund?
Submitted: 4 years ago.
Category: Tax
Expert:  BK-CPA replied 4 years ago.

I agree that canceling your charitable remainder trust now would carry tax consequences, namely because you already received a deduction upon its creation.

 

Assets that are investments within the trust could be replaced by other assets more suitable (profitable) without voiding the trust agreement itself. That appears to be a more practical solution for you, assuming your problem is with the performance of the investments and not the trust itself. Look to your trust agreement too for any specifics with your personal trust.

 

Again, assuming your issue is of course the losses and not the trust itself, then you also need to consider that CPA's do not typically give stock tips on any sort of a professional level (they are not licensed for that in general). You would be leaning towards (full service) brokerage firms, investment advisory firms, and or portfolio management firms for advice as to "what should I invest in." The CPA told you how to invest (the trust) for tax purposes, but you are typically free/expected, as I said, to manage the income producing assets of a charitable remainder trust to the best of your (the trustee's) ability.

 

I'm sorry your investments did not pan out that well. Most peoples' did not, but many managed to make some money back too and may continue to here going forward. This may not be what you want to hear, but ultimately you must watch your own investments first and foremost, you need to hire the right person(s) for managing investments if you (like most people) want someone that is likely to do a better job than you, and finally, you need to make a rational decision now (your CPA may actually still be quite competent from what I can tell at this point, seeing as how many a (certified) financial advisor/planner/analyst/etc. lost money during the crash, and otherwise it sounds like you may have (had) some solid tax planning in place...).

 

Good luck. Thank you for your question and let me know if there is something more I can clarify.



Edited by BK-CPA on 9/2/2010 at 7:33 AM EST

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
 
 
 
Chat Now With A Tax Professional
BK-CPA
BK-CPA
Tax Professional
818 Satisfied Customers
Owner of a CPA firm