Sale and Unitrust
Are your appreciated assets, such as personal or commercial real estate, producing little or no income? If you sell your appreciated assets, you will pay a large capital gains tax. A sale and charitable remainder unitrust may be the solution to mitigate or avoid capital gains tax.
Flowchart: Donor transfers an undivided portion of property to a unitrust. When the property is sold, the donor and the unitrust receive cash from the sale. The donor receives payouts from the unitrust and
IU Health receives the remainder at the end of the trust term.
Benefits of a sale and unitrust
- Receive cash from the sale, which can be used to purchase another residence, save for retirement, travel, meet daily needs, or achieve other financial goals.
- Receive income from the unitrust for life, lives, or a term of year.
- Obtain an income tax deduction that may reduce your tax bill in the year of the sale.
- The money remaining in the trust after all the trust payments have been made is used to support innovations in healthcare, remove barriers to care, extend care beyond hospital walls to impact the social determinants of health and, ultimately, build a healthier Indiana.
Did You Know?
When transferring a portion of your primary residence to fund a unitrust, you may apply your one-time home exclusion to reduce or eliminate capital gains tax that would otherwise be due from the sale. Your tax advisor can assist you to determine if you should utilize this strategy.
How a sale and unitrust works
- You establish a charitable remainder unitrust and transfer a portion of an asset to the unitrust.
- The asset is sold. You receive cash from the sale, and the remaining sale's proceeds are paid to the charitable unitrust.
- The unitrust will provide you with income for the rest of your life.
- You receive a charitable deduction on the percentage paid to the unitrust to offset the tax on the cash that you receive from the sale.
- The money remaining in the trust after all the trust payments have been made is transferred to IU Health Foundation.
Contact us
If you have any questions about a sale and unitrust, please contact us. We would be happy to assist you and answer any questions you might have.
