Gift Tax Returns for Charitable Remainder Trusts

Donors who make charitable gifts are required to file federal gift tax returns whenever the gift involves a “partial interest,” including a charitable remainder trust [Code §6019(3)]. However, the income beneficiary of a charitable remainder trust who assigns the entire income interest to the remainderman should not have to file a gift tax return. In all other cases, the gift tax return is required even where the donor is the only person with a retained life interest (a one-life unitrust with the donor as beneficiary, for example). Donors who retain interests for persons other than themselves will have made additional gifts for gift tax purposes unless the private gift has been rendered incomplete—generally accomplished by the donor retaining the right to revoke the beneficiary’s interest.

back