Increasing Charities’ Access to Fundsby Representative Patrick J. Tiberi
Posted on 2015-12-08
in the house of representatives
Tuesday, December 8, 2015
Mr. TIBERI. Mr. Speaker, charitable remainder trusts present an
opportunity for donors to transfer assets for the benefit of charity.
Lack of certainty regarding the tax consequences of early terminations
of these trusts has deterred early terminations, which has deferred the
transfer of substantial assets to charity. Early terminations of
charitable remainder trusts should be encouraged because they permit
charities to access their share of the trust's assets earlier (and, in
some instances, decades earlier) than otherwise would be the case. This
is particularly compelling given that, under current economic
conditions, many charities have been forced to cut back on many
My bill provides that, on an early termination of a charitable remainder trust, the donor and the charity will apportion the value of the trust using the same methodology that was used to determine the value of the remainder interest on formation. The donor will recognize capital gain on the total value received, the charity will receive its share of the trust's assets, and the early termination will not constitute self-dealing or otherwise disqualify the charitable remainder trust.
Today, Rep. Rangel and I are introducing this bill which clarifies the tax consequences of early terminations of charitable remainder trusts and encourages the early transfer of funds in such trusts to charities. Mr. Speaker, I urge all my colleagues to support our bill to give charities earlier access to funds for use in their worthwhile endeavors.