Charitable Remainder Trust Calculator 2026 β CRAT vs CRUT
Calculate annual income, charitable deduction, and tax savings from a Charitable Remainder Annuity Trust (CRAT) or Unitrust (CRUT) using March 2026 Section 7520 rate.
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Quick:
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IRS requires 5%β50% range
Max 20 years for fixed term
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$30,000
Annual Income from Trust
$162,400
Charitable Deduction (PV)
$51,968
Income Tax Savings
$600,000
Total Income Over Term
Trust Details
| Item | Value |
|---|---|
| Contribution amount | $500,000 |
| Trust type | CRUT |
| Payout rate | 6% |
| Section 7520 rate (March 2026) | 5.2% |
| Term | 20 years |
| Remainder interest (PV) | $162,400 |
| Remainder as % of contribution | 32.5% |
| 10% minimum test | Pass |
How Charitable Remainder Trusts Work
A CRT is an irrevocable split-interest trust: you (or other named beneficiaries) receive an income stream for a period, then the remaining assets pass to your chosen charity. You get an immediate tax deduction for the present value of the charitable gift.
CRAT vs CRUT: Key Differences
CRAT Annual Payment = Initial Contribution Γ Payout Rate% (fixed forever)
CRUT Annual Payment = Trust FMV (at year start) Γ Payout Rate% (varies each year)
CRAT Remainder = FV of Trust β PV of Payments (discounted at Β§7520 rate)
CRUT Remainder = Contribution Γ (1 β Payout Rate)^Term
CRUT Annual Payment = Trust FMV (at year start) Γ Payout Rate% (varies each year)
CRAT Remainder = FV of Trust β PV of Payments (discounted at Β§7520 rate)
CRUT Remainder = Contribution Γ (1 β Payout Rate)^Term
Charitable Deduction Calculation
Charitable Deduction = PV of Charitable Remainder Interest
= Contribution β PV of Income Stream
(using IRS actuarial tables at the Β§7520 rate of 5.2%)
= Contribution β PV of Income Stream
(using IRS actuarial tables at the Β§7520 rate of 5.2%)
Extended
CRAT vs CRUT Comparison & Optimal Payout Analysis
Side-by-side comparison and find the payout rate that maximizes your income and deduction
CRAT vs CRUT Side-by-Side at Your Inputs
| Feature | CRAT | CRUT |
|---|
Optimal Payout Rate Analysis
Different payout rates produce different deductions and income streams. Higher payout = more income but smaller charitable deduction.
| Payout Rate | Annual Income | Charitable Deduction | Tax Savings | 10% Test |
|---|
Frequently Asked Questions
What is the difference between a CRAT and a CRUT?
A CRAT (Charitable Remainder Annuity Trust) pays a fixed dollar annuity each year, based on the initial funding amount β it never changes regardless of investment performance. A CRUT (Charitable Remainder Unitrust) pays a fixed percentage of the trust's value as revalued annually, so payments rise or fall with market performance.
What is the Section 7520 rate and why does it matter?
The Section 7520 rate (also called the "applicable federal rate" for estate and gift tax purposes) is published monthly by the IRS. It is used to calculate the present value of the charitable remainder interest. A higher 7520 rate produces a larger charitable deduction. For March 2026, the rate is approximately 5.2%.
What is the 10% minimum remainder test?
The IRS requires that the present value of the charitable remainder interest must equal at least 10% of the initial contribution. If your chosen payout rate and term produce a remainder below 10%, the trust fails this test and will not be recognized as a valid CRT. This calculator flags trusts that may fail.
Can I get a charitable deduction for contributing to a CRT?
Yes. When you fund a CRT, you receive an immediate charitable income tax deduction equal to the present value of the remainder interest that will eventually pass to charity. The deduction is limited to 30% of AGI (for appreciated property) or 50% of AGI (for cash), with a 5-year carryforward for excess amounts.
How is CRT income taxed to the beneficiary?
CRT distributions follow a "four-tier" ordering rule: (1) ordinary income, (2) capital gains, (3) other income, (4) corpus. If the trust sold appreciated property, distributions are first characterized as capital gain until all gain is distributed. This allows partial deferral of capital gains tax.