Charitable Remainder Trust Calculator (CRAT & CRUT)

Not tax or legal advice. CRT design requires a qualified estate attorney and IRS actuarial computations. This calculator illustrates the planning concept and gives order-of-magnitude estimates for structuring conversations.

A charitable remainder trust lets you contribute a highly appreciated asset, defer capital gains tax, receive an income stream for years, claim a charitable deduction today, and pass the remainder to charity at term end. For $30M+ families with concentrated positions in founder stock, private equity, or a closely held business, the CRT arithmetic can be compelling — particularly when the remainder beneficiary is a donor-advised fund or private foundation you control.

CRAT vs. CRUT: which structure fits your situation?

Both types transfer appreciated assets to an irrevocable trust, avoid immediate capital gains, generate an income stream, and deliver the remainder to charity. The difference is how your annual income is calculated.

Most $30M+ donors working with a fee-only advisor choose the CRUT for longer terms because income grows with trust value. The CRAT works when the primary goal is a fixed, predictable income stream with a defined end date — retirement income planning, for instance.

How the charitable deduction works

When you fund a CRT, you receive a charitable deduction equal to the IRS-computed present value of what the charity will receive at the end of the trust's term. This is calculated using the §7520 rate as the discount rate — not your actual expected growth rate.¹

The deduction is locked in at the time of contribution. If your trust grows 15% per year while the §7520 rate was 5.0%, the charity gets far more than the IRS assumed — you don't owe more tax. Conversely, if the trust underperforms, the deduction doesn't shrink. This asymmetry is part of the CRT's appeal in a higher-rate environment.

2026 deduction limits and OBBBA changes

• 30% AGI limit for appreciated property (§170(b)(1)(C)). If you contribute long-term capital gain property to a CRT with a public charity as remainder beneficiary, your deduction is limited to 30% of AGI per year. Unused amounts carry forward for five years, giving you six tax years total to use the deduction.²
• 0.5% AGI floor (OBBBA, effective 2026). The first 0.5% of your AGI in charitable contributions each year is non-deductible. For a $2M AGI taxpayer: the first $10,000 is not deductible. At UHNW scale, this floor is trivial relative to a CRT deduction.
• 35% deduction cap for 37% bracket filers (OBBBA, effective 2026). High-income itemizers can only claim 35¢ of tax benefit per dollar of charitable deduction — not 37¢. For a $1.5M deduction, the cap costs you: $30,000 in foregone benefit ($1.5M × 2%).

The 10% remainder test

IRC §664 requires that the present value of the charitable remainder interest — computed using the §7520 rate at the time of contribution — must equal at least 10% of the initial net fair market value of the assets transferred to the trust.⁴

If your CRT fails this test at the proposed payout rate, you have three options:

1. Lower the annual payout rate
2. Shorten the trust term
3. Use a two-life or single-life term based on a younger beneficiary's life expectancy

The calculator flags failures in real time. Failure is more common with CRATs at high payout rates over long terms, and at low §7520 rates (which raise the present value of annuity payments, eating into the remainder). When the §7520 rate rises — as it has from 0.8% in 2021 to 5.0% in May 2026 — the 10% test becomes easier to pass because the IRS assumes the charity's remainder is discounted at a higher rate.

How CRT distributions are taxed: the tier system

Your annual income from a CRT is not taxed as ordinary income automatically. The IRS uses a four-tier ordering system (§664(b)) to characterize what you receive each year:

1. Ordinary income — the trust's net ordinary income for the current and prior years is distributed first (interest, dividends, rental income)
2. Short-term capital gains
3. Long-term capital gains — this is where most of the distributions from an appreciated-asset CRT land. The trust sells the contributed asset tax-free, and then distributes those capital gains to you over time as you receive your income stream
4. Tax-exempt income
5. Return of corpus (not taxable)

For a UHNW donor who contributes $5M of appreciated tech stock (basis $500K), the trust avoids the immediate $4.5M × 23.8% = $1.07M capital gains tax. Instead, the trust reinvests the full $5M. As you receive income over the years, distributions are characterized as long-term capital gains (taxed at your 23.8% rate) until the capital gains "basket" is depleted. Later distributions — once capital gains are exhausted — come out as return of corpus, tax-free.

The result: capital gains tax that would have been $1.07M in year one is spread over 10–20 years, invested for the entire period, and some of it may never be taxed at all if the trust outlasts the capital gains basket.

When a CRT makes sense at $30M+

A CRT is not always the right tool. It permanently removes assets from your estate and from your heirs' inheritance. Before structuring one, the key questions are:

• Do you have genuine charitable intent? The remainder goes to charity. If your goal is purely tax efficiency with no giving intent, explore exchange funds, direct indexing tax-loss harvesting, or a GRAT instead.
• Is the asset highly appreciated? The CRT's core benefit is avoiding immediate capital gains tax. If your basis is 80% of FMV, the tax benefit is minimal. The CRT shines when basis is 5–20% of FMV — founder stock, early-stage PE, pre-IPO equity.
• Do you need income from this asset? If you have ample liquidity from other sources, you may prefer a direct DAF contribution (simpler, no income stream required, better deduction rate) or a GRAT (transfers to heirs rather than charity).
• Is this a concentrated position or illiquid asset? CRTs work well with hard-to-sell assets — closely held business interests, pre-IPO stock subject to lock-up, real estate with high embedded gains. The trust can sell the asset and reinvest the proceeds without triggering your personal tax liability.

CRT coordination with your estate plan

A CRT does not use your federal estate/gift tax exemption ($15M in 2026 under OBBBA). Assets in the CRT are removed from your taxable estate entirely — both the corpus and future appreciation. This makes the CRT complementary to, not competing with, your GRAT program or SLAT.

One important constraint: if you name your spouse as co-beneficiary on a CRUT and the trust terminates on the survivor's death, the marital deduction may offset the estate tax inclusion for your spouse's interest — but this requires careful drafting. Coordinate with your estate attorney before naming family members as co-annuitants.

The $111,000 QCD limit (2026) is a separate, much simpler tool for donors over 70½ who want to give from IRAs directly to charity. For UHNW families with taxable brokerage accounts holding appreciated stock, the CRT is typically the higher-leverage structure.