Splitting charitable remainder trusts in divorce – What are the tax consequences?

Description

Abstract: While the division of some marital assets in divorce can seem straightforward, questions have arisen about making a pro rata, 50-50 division of a charitable remainder trust (CRT) into two trusts for the spouses. In response, the IRS issued Revenue Ruling 2008-41, which addresses the tax consequences of such a division. Specifically, this article addresses excise taxes in regard to self-dealing, taxable expenditures, and asset transfers between private foundations, while a sidebar looks at whether a CRT can be divided into separate trusts for multiple — but nonmarried — income recipients without triggering adverse tax consequences.