What is a charitable remainder trust?

A charitable remainder trust (CRT) is an irrevocable trust that pays income to the donor or beneficiaries for a set period, then transfers the remaining assets to a designated charity. It provides an immediate charitable tax deduction, avoids capital gains on donated appreciated assets, and reduces estate taxes.

How does a charitable remainder trust calculator work?

A CRT calculator estimates your annual income payments, the charitable deduction amount based on IRS Section 7520 rates, capital gains tax avoided on appreciated assets, and the projected value of the charitable remainder. Enter your asset value, payout rate, trust term, and applicable IRS rate.

How much is the charitable deduction for a CRT?

The charitable deduction equals the present value of the remainder interest passing to charity, calculated using the IRS Section 7520 rate. It must be at least 10 percent of the initial contribution value. Deductions are limited to 30 percent of AGI for appreciated assets and can be carried forward 5 years.

What is the minimum payout rate for a charitable remainder trust?

The minimum payout rate for a CRT is 5 percent of the initial contribution for a CRAT, or 5 percent of the annual fair market value for a CRUT. The maximum payout rate is 50 percent. The remainder interest passing to charity must equal at least 10 percent of the initial contribution.

Can a charitable remainder trust avoid capital gains tax?

Yes. When you contribute appreciated assets such as stocks or real estate to a CRT, the trust sells them without paying capital gains tax. The proceeds remain in the trust and generate income for you. This allows the full pre-tax value to be invested, producing higher income than if you had sold the assets and paid capital gains first.

What happens to a charitable remainder trust at the end of the term?

At the end of the trust term, the remaining assets pass to the designated charity or charities. The donor receives no further payments. If a net income CRUT was used, any accumulated income shortfalls may be paid out before the remainder passes to charity.

Charitable Remainder Trust Calculator

Trust Type

Asset Value Contributed

Fair market value of assets transferred to trust

Cost Basis of Assets

What you originally paid — 0 if fully appreciated

Payout Rate

Min 5% — Max 50% (IRS requirement)

Trust Term

yrs

Number of years (max 20) or life expectancy

IRS Section 7520 Rate

Current monthly rate from IRS.gov (Mar 2026: ~5.2%)

Your Income Tax Rate

Federal + state marginal rate for deduction value

Annual Income Payment

⚠️ Important: This calculator provides estimates for educational purposes only. Charitable remainder trust calculations require a licensed estate planning attorney and qualified CPA. The actual charitable deduction depends on IRS tables, beneficiary ages, and specific trust terms. Always consult a professional before establishing a CRT.

Was this calculator helpful?

Sources & Methodology

🏛️

IRS — Charitable Remainder Trusts (Section 664)

Official IRS guidance on CRT rules, payout requirements, minimum remainder interest, and deduction limits used in all calculations

🏛️

IRS Section 7520 Interest Rates

Monthly IRS applicable federal rate used to calculate the present value of the charitable remainder interest and deduction amount

📖

Planned Giving Design Center — CRT Reference

Industry-standard formulas for CRAT annuity factor and CRUT remainder factor calculations verified against PGDC tables

Methodology: Annual income = Asset Value x Payout Rate (CRUT) or fixed dollar amount (CRAT). Capital gains avoided = (Asset Value - Cost Basis) x long-term capital gains rate (20%). Charitable deduction estimated as: Asset Value x (1 - Payout Rate / IRS 7520 Rate) adjusted for trust term using present value factor. Tax savings on deduction = Deduction Amount x Income Tax Rate. Deductions limited to 30% of AGI for appreciated property; 5-year carryforward applies. These are estimates only.

Last reviewed: March 2026 — payout rules and deduction limits verified against IRS Publication 1459 and current Section 7520 rates.

Charitable Remainder Trust Calculator — How CRT Income and Tax Deductions Work

A charitable remainder trust (CRT) is one of the most powerful estate planning tools available to high-net-worth individuals with appreciated assets. It lets you convert a low-yield, highly appreciated asset — such as real estate, stock, or a business interest — into a lifetime income stream, avoid capital gains tax, take an immediate charitable deduction, and ultimately benefit a charity of your choice.

Charitable Remainder Trust Formula — How the CRT Calculator Works

CRUT Annual Income = Trust Value x Payout Rate

Example: $500,000 trust at 6% payout rate = $30,000/year
Capital gains avoided: ($500,000 - $50,000 basis) x 20% = $90,000 saved
Charitable deduction estimate: ~$150,000-$200,000 depending on IRS 7520 rate and term
Tax savings on deduction (37% bracket): ~$55,500-$74,000

CRAT Annual Income = Initial Asset Value x Payout Rate (fixed forever)

Example: $500,000 trust at 6% CRAT = $30,000/year fixed regardless of trust performance
CRAT payments never change. CRUT payments fluctuate with trust value.

CRAT vs CRUT — Which Charitable Remainder Trust Is Right for You?

Feature	CRAT (Annuity Trust)	CRUT (Unitrust)
Payment amount	Fixed dollar amount	% of trust value (varies)
Inflation protection	None	Yes — grows with trust
Additional contributions	Not allowed	Allowed
Investment risk	Trust bears it alone	Shared with beneficiary
Best for	Predictable income need	Long-term growth preference
Minimum payout	5% of initial value	5% of annual value
Payment floor	Yes — fixed minimum	No floor

Capital Gains Tax Savings — The Core Benefit of a Charitable Trust

The most immediate financial benefit of a charitable remainder trust is avoiding capital gains tax on appreciated assets. If you own $500,000 of stock with a $50,000 cost basis and sell it directly, you owe $90,000 in federal capital gains tax (20%), leaving only $410,000 to invest. By contributing the stock to a CRT instead, the full $500,000 stays in the trust and generates income — effectively giving you a $90,000 advantage from day one.

This CRT capital gains tax savings is why financial planners frequently recommend charitable remainder trusts for clients holding low-basis real estate, appreciated company stock, or built-up business interests they want to diversify out of.

Charitable Deduction Rules — IRS Section 664 and 7520

The charitable tax deduction for a CRT equals the present value of the remainder interest that will eventually pass to charity. This is calculated using the IRS Section 7520 rate — a monthly published rate based on 120% of the applicable federal mid-term rate. A higher 7520 rate produces a larger charitable deduction. A lower 7520 rate produces smaller deductions but larger income streams.

Key IRS rules for CRT deductions:

Minimum remainder: The charitable remainder must equal at least 10% of the initial contribution value. If your payout rate is too high or term too long, the trust may not qualify.
Deduction limit: Deductions for appreciated property contributed to a CRT are limited to 30% of your adjusted gross income (AGI) per year.
5-year carryforward: Unused deductions can be carried forward for up to 5 additional tax years.
Appraisal required: Non-cash assets (real estate, closely-held stock) require a qualified appraisal within 60 days before contribution.

IRS Section 7520 Rate — How It Affects Your CRT

7520 Rate	Effect on Deduction	Effect on Income	Best Trust Type
Low (2-3%)	Smaller deduction	Higher income potential	CRUT
Moderate (4-5%)	Balanced	Balanced	Either
High (5-7%)	Larger deduction	Lower relative income	CRAT

💡 Timing tip: Establish your CRT in a month when the IRS Section 7520 rate is high if maximizing the charitable deduction is your primary goal. Establish it when rates are low if maximizing income is the priority. You can check the current month's 7520 rate at IRS.gov. The March 2026 rate is approximately 5.2%.

Frequently Asked Questions

A charitable remainder trust (CRT) is an irrevocable trust where you transfer appreciated assets, receive income payments for a set period, and the remaining assets pass to charity at the end of the term. The three main benefits are: an immediate charitable tax deduction, avoidance of capital gains tax on donated appreciated assets, and a lifetime or fixed-term income stream. CRTs are governed by IRS Section 664.

A CRUT pays a percentage of the trust value recalculated annually — typically 5% to 7%. On a $500,000 trust at 6%, that is $30,000 per year, growing or shrinking as the trust value changes. A CRAT pays a fixed dollar amount calculated as the payout rate applied to the initial contribution. The IRS requires a minimum payout of 5% and a maximum of 50%.

The charitable deduction equals the present value of the remainder interest that will pass to charity, calculated using the IRS Section 7520 rate. It must be at least 10% of the initial contribution. The deduction is limited to 30% of AGI per year for appreciated property and can be carried forward for 5 years. On a $500,000 contribution, deductions typically range from $100,000 to $250,000 depending on payout rate, term, and 7520 rate.

Yes. When you contribute appreciated assets to a CRT, the trust sells them tax-free. The full pre-tax value remains invested in the trust, generating higher income than if you had sold outside the trust and paid capital gains. On a $500,000 asset with $50,000 basis, you avoid $90,000 in federal capital gains tax. State capital gains taxes are also avoided depending on your state.

A CRAT (Charitable Remainder Annuity Trust) pays a fixed dollar amount every year regardless of trust performance. A CRUT (Charitable Remainder Unitrust) pays a fixed percentage of the trust value recalculated each year, so payments fluctuate with investment performance. CRUT payments can increase with inflation and strong returns. Additional contributions are allowed to a CRUT but not a CRAT. Most estate planners recommend CRUTs for long-term income planning.

Most attorneys and trust administrators require a minimum of $100,000 to $250,000 in assets to make a CRT cost-effective, given legal setup costs of $3,000 to $8,000 and annual administrative fees of 0.5% to 1.5% of trust assets. Below $100,000 the fees tend to consume too much of the benefit. CRTs are typically used by donors contributing $250,000 to $5 million in appreciated assets.

Almost any asset can be contributed to a CRT including publicly traded stock, real estate, closely-held business interests, mutual funds, bonds, and cash. The most tax-efficient contributions are highly appreciated low-basis assets where the capital gains tax savings are largest. Real estate contributions require a qualified appraisal. Retirement accounts (IRAs, 401ks) generally should not be contributed to a CRT due to adverse tax treatment.

Related Calculators