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(a) of the section. Subsection (a) includes organizations
pursuing religious, charitable, scientific, literary, or
educational purposes, or fostering amateur sports competition, or
preventing cruelty to children or animals, from which no net
earnings inure to a noncharitable private party and which do not
participate in political campaigning. See sec. 2055(a)(2).
However, no deduction shall be allowed if a charity receives a
remainder interest in property and if an interest in the same
property also passes to an individual or a noncharitable entity,
unless the charitable remainder interest is in a charitable
remainder annuity trust, a charitable remainder unitrust, or a
pooled income fund. See sec. 2055(e)(2)(A). The trust
established by decedent purports to be a CRAT, and if it were, a
gift of trust assets to charity would qualify for the charitable
deduction.
Section 664(d)(1) contains the definition of a charitable
remainder annuity trust. A trust only qualifies as a CRAT if:
(1) It pays out a sum certain, not less than 5 percent of the
initial fair market value of the trust assets, annually or more
frequently to one or more persons for either the lifetime of such
person or a term of years (not more than 20 years); (2) no other
payments, besides those described in (1), are paid to or for the
use of a person other than an organization described by section
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Last modified: May 25, 2011