Establishing a Charitable Trust: Thoughts on Estate Planning for Bay Area Residents

Filed in CPA Blog by on February 7, 2015
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Estate planning is a very important issue for anyone who is up in their years, and/or has substantial assets. By planning ahead, you can leave a legacy to your heirs or to charities that you want to promote. It’s a worthy thing to do, and by working with us as your CPA team, we can also use charitable giving as part of your tax planning.

Trim Steep New Taxes with a Charitable Trust in San Francisco

 

In our recent July newsletter, we featured some great tips about how to trim steep taxes with a ‘charitable trust.’ Here’s an excerpt:

Safe Harbor LLP - San Francisco CPA Firm - July Newsletter

High-income taxpayers face escalated effective tax rates as a result of new tax laws (see the CPA Client Bulletin for April 2013). Moreover, the higher rates are not limited to athletes, entertainers, and corporate CEOs who regularly collect substantial paychecks and bonuses. Taxpayers who ordinarily are in moderate tax brackets may trigger the new premium rates, surtaxes, and deduction phaseouts in any year when they sell a business, sell 2 investment property, or take portfolio profits. One strategy can defer these extraordinary gains for years or even decades. This tactic allows you to spread the gains over many years, so you may be able to keep your annual income down and, thus, avoid the extra taxes aimed at the top earners. If you might face such a situation in the future, consider setting up a charitable remainder trust (CRT) for the asset sales.

Read more in our July client bulletin, available here.

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