An Enrolled Agent with over 30 years' experience providing common-sense tax, insurance and financial solutions. Married for over 45 years, having raised two sons, both married to girls named Carla. Go figure.
For the grantor, there are a few potential tax benefits that can come with setting up a charitable trust.
With traditional IRAs and most employer-sponsored retirement plans, taxes are not payable until funds are withdrawn.
Tax-deferred retirement account withdrawals before age 59½ generally trigger a 10% federal income tax penalty.
There can be a substantial benefit to deferring taxes as long as possible.
Many traditional tax-advantaged investment strategies have gone away, but there are still some alternatives.
Capital gains are profits realized from the sale of assets; a tax is triggered only when an asset is sold, not held.
Everything you own, whatever the form of ownership, is subject to federal, and possibly state, estate taxes.
The federal gift tax applies to gifts of property or money while the donor is living.
IRAs and employer-sponsored retirement plans are subject to annual contribution limits set by the federal government.
Required minimum distribution is the annual amount that must be withdrawn from a qualified retirement plan/account.