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Member
Group: Forum Members
Last Login: 5/19/2008 1:33:37 PM
Posts: 1,
Visits: 1
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| I have a client who desires to transfer a mini-storage business, currently owned as a sole proprietorship, to a CRT. Is there a method to get around the UBTI issue, and assignment of income generally. One thought, was to create an LLC, and transfer a non-managing member interest to the CRT. Any thoughts? Thank you.
Richard Keene
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| There are new rules for UBTI and charitable remainder trusts starting in 2007. In the past if a CRT had even one dollar of UBTI for the year the trust was tainted and all income was subject to income taxes. Starting in 2007 you are given a 1,000 exemption on UBTI and any UBTI over $1,000 is taxed at 100%. So if you have $5,000 of UBTI and $5,000 of capital gain income, you would have a $4,000 tax on the UBTI (($5,000 - $1,000 * 100%)) and capital gains would still be treated as they were in prior years.
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