|
|
|
Member
Group: Forum Members
Last Login: 4/26/2008 4:08:12 PM
Posts: 1,
Visits: 3
|
|
| I have a client who set up a charitable unitrust last year with low basis stock acquired from an employer stock option plan. After the contribution, the trust sold the stock at a large gain. I'm assuming that the donor's tax basis will carryover to the trust and a capital gain should be reported by the unitrust upon sale of the stock, but I'm not certain if this is the appropriate tax treatment. I can't think of any reason why the tax basis would be adjusted to FMV at the time of the contribution to the trust, but if someone knows why it should, I would appreciate their input, with any tax authority they may be able to cite.
|
|
|
|
|
Power Member
Group: Forum Members
Last Login: 2 days ago @ 11:00:56 AM
Posts: 113,
Visits: 489
|
|
Normally a CRUT is created with low basis stock which is sold immediately by the trust. The basis carries over as with any other gift. Because this is option stock, it could be more complicated. That's because there is a compensation element to stock acquired with employer stock options. If the client is required to report any income because of the excercise of the options or the transfer to the trust, there would be additional basis for the shares in the CRUT.
Mary Kay Foss
|
|
|
|