CHARITABLE REMAINDER TRUST (CRT) & CHARITABLE DONATION VALUe
IRS-Defensible Valuations for Charitable Planning, Reporting & Examination Support
My Financial Valuation provides independent, audit-defensible valuation services for Charitable Remainder Trusts (CRTs) and charitable donation planning involving real estate, partnership interests, closely held businesses, and complex assets.
Our work supports attorneys, CPAs, fiduciaries, and high-net-worth families in structuring, funding, reporting, and defending charitable transfers where valuation accuracy directly determines:
- charitable deductions
- income tax consquences
- remainder interest calculations
- IRS examination exposure
We specialize in situations where contributed assets are illiquid, complex, partially owned, or enterprise-driven — and where valuation errors create material audit and penalty risk.
When CRT & Charitable Donation Valuation Is Required
Independent valuation is typically required for:
- funding of Charitable Remainder Trusts (CRUTs and CRATs)
- charitable gifts of real estate, partnership interests, and business interests
- non-cash charitable contributions exceeding IRS reporting thresholds
- valuation support for Form 8283 and related filings
- remainder interest and income interest modeling
- examination and audit defense
Our valuations are prepared to satisfy the qualified appraisal requirements under IRS regulations and Revenue Ruling 59-60, and to withstand technical review.
Assets Commonly Contributed to CRTs and Charitable Trusts
We frequently value:
- income-producing real estate and development property
- minority interests in real estate holding companies
- family limited partnerships (FLPs) and LLC interests
- closely held operating businesses
- fractional interests and tiered entity structures
- special-use and complex real estate
These assets require integrated enterprise + real estate valuation discipline, not template appraisals.
Unitrust vs. Annuity Trust
Charitable Remainder Trusts are commonly structured in two primary forms: Charitable Remainder Unitrusts (CRUTs) and Charitable Remainder Annuity Trusts (CRATs). While both provide an income stream to non-charitable beneficiaries with the remainder passing to charity, they differ materially in how annual distributions are determined — with important valuation and reporting implications.
Charitable Remainder Unitrust (CRUT)
Under a Unitrust, the annual payment is calculated as a fixed percentage of the trust’s assets, re-valued each year. Because distributions fluctuate with asset value and performance, the beneficiary’s income stream is variable and market-dependent.
Unitrust valuation requires careful analysis of:
- fair market value of contributed assets at funding
- volatility and liquidity of trust assets
- income-producing capacity and reinvestment assumptions
- actuarial remainder interest sensitivity
There are no guarantees of a fixed payment amount — distributions rise or fall with asset value.
Charitable Remainder Annuity Trust (CRAT)
Under an Annuity Trust, the trust specifies a fixed annual dollar payment. This provides a stable and predictable income stream, independent of year-to-year asset value changes (subject to the trust’s ability to meet payment obligations).
CRAT valuation focuses on:
- initial fair market value of contributed assets
- annuity payout obligations relative to asset performance
- liquidity sufficiency and sustainability
- actuarial remainder interest compliance
Why This Distinction Matters
The Unitrust vs. Annuity structure directly affects:
- income stream valuation
- remainder interest economics
- charitable deduction calculation
- asset suitability and funding risk
- audit sensitivity and documentation standards
Illiquid assets — particularly real estate and partnership interests — require disciplined valuation modeling to avoid misstatement and examination exposure.
Valuation Methodology & Professional Standards
Our CRT and charitable donation valuations integrate:
- real estate appraisal discipline (Certified General Appraiser)
- enterprise and ownership-interest valuation (CVA, ASA, MAFF)
- minority interest and discount analysis
- actuarial and income-stream modeling
- precedent-informed methodology
All reports comply with:
- USPAP
- IRS qualified appraisal standards
- Revenue Ruling 59-60
- NACVA and ASA Professional Standards and Ethics
Audit & Examination Sensitivity
Charitable contribution valuations are among the highest-scrutiny categories in IRS examinations. Penalties are frequently asserted when:
- values are unsupported
- discounts are aggressive
- appraisers lack independence or qualifications
- documentation is inadequate
My Financial Valuation emphasizes:
- conservative, precedent-informed assumptions
- defensible discount methodology
- full documentation suitable for IRS review
- valuation positions designed for survivability, not maximization
Professional Credentials & Integrated Capability
My Financial Valuation’s practice is led by a principal holding:
- Accredited Senior Appraiser (ASA)
- Master Analyst in Financial Forensics (MAFF)
- Certified Valuation Analyst (CVA)
- Certified Commercial Investment Member (CCIM)
- Certified General Real Estate Appraiser (multi-state)
This rare combination allows us to integrate:
- enterprise valuation
- real estate valuation
- minority interest discounting
- charitable transfer economics
in a single, coherent valuation opinion.
Begin with a Confidential Consultation
Whether your planning involves real estate, holding companies, or closely held enterprises, charitable transfers require valuation judgment before irreversibility.
We invite attorneys, CPAs, fiduciaries, and families to begin with a confidential consultation to assess scope, reporting requirements, and examination risk.
Disclaimer
This page is for informational purposes only and does not constitute legal or tax advice. Charitable planning should be undertaken only in consultation with qualified legal and tax professionals.