1. Advanced CRT Design Reynolds T. Cafferata, Rodriguez, Horii, Choi & Cafferata, LLP

2. CRTs are back

3. Easy Assets

4. Difficult situations S Corporation

5. Flavors of CRTs Annuity Unitrust Net Income Unitrust Net Income Make Up Combination of Methods (“Flip Trust”)

6. What if the donor wants? Distributions some years and not others?

7. Spigot CRT

8. Unitrust Amount > Net Income What if Net Income is 0?

9. What’s Net Income? Trust Accounting Income Cash Accounting Interest, Dividends, Rents & Royalties Not Gain from the sale of assets Entities Create Income with distributions Not the same as taxable income

10. Invest to Control Income

11. Use an entity to control income

12. Choices of Entities Variable Annuity Partnership Single Member LLC

13. Distributions from Entities Cash is Income unless: Liquidation Redemption Exceeds 20% of Value of Entity Property and other distributions are Principal California Look-Through Rule

14. Challenges Self-dealing Constructive Receipt Creation of Income When Distribution is Desired

15. S Corporation Stock

16. S Corporation Basics Flow Through Taxation Shareholder Limits U.S. Citizens 501(c)(3) Organizations Trusts for the above

17. S Corps and CRTs Do not mix Ineligible Shareholder UBTI for 501(c)(3) Organizations

18. S Corp Can Fund a CRT S Corp Is Beneficiary of CRT 20 Year Term Maximum S Corp

19. Challenges S Corp Must be Beneficiary Deemed Liquidation

20. Encumbered Property

21. Potential Issues Bargain Sale UBTI Grantor Trust Disqualification

22. Pay It Off or Transfer It

23. Aged Debt Avoids UBTI Not Acquisition Debt If: Donor Owned Property 5 Years Debt on Property for 5 Years Charity Does Not Assume Debt

24. Grantor Trust is Not a CRT CRT Cannot Be a Grantor Trust Income owned by donor Applies if CRT can pay donor’s debts Recourse Debt is Donor’s Debt Non-Recourse Debt may be OK

25. Solutions to Recourse Debt Pay it off or Transfer It Get Lender to Waive Recourse Keep out of Trust and Indemnify Trust

26. CRT Money Tree