Mark Kohler shows how a Charitable Remainder Unit Trust lets you donate crypto to a trust, sell it tax-free inside, and still collect income. A $1 million gain taxed at 30% becomes a fraction of that, plus you get a charitable deduction and the charity gets the remainder.
Let's say you're sitting on some crypto that is currently worth $1.2 million and your purchase price was $200,000. Now, your gain would be a $1 million capital gain. That's the problem. Now, the capital gain could easily be 30%, so you might pay $300,000 in tax. So what do we do? We are going to try to get rid of this with a charitable remainder unit trust. Now, credit has multiple steps, and it starts with setting up the trust itself. Now, you're going to work with an ATT process, but you got to understand it because you're the captain of your own ship. Now, in this trust, we're going to set up two beneficiaries, an income beneficiary who is going to be you. So you get to have the income from this trust, and then we are going to have a residual beneficiary. And this means when you die, or 20 years, whichever is longer, we're going to give this money to a charity. So we're going to put charity down here. Step two, we're going to donate the crypto to the trust. Now, when you donate that crypto to the cred, you immediately get a tax deduction. Guess who the trustee is? You. You're going to be the investment trustee. You get to direct how that money is going to be invested. So you're going to get a tax deduction. This tax deduction is around 10% of the fair market value. So you're looking at about $120,000 tax deduction. And you get to take that over approximately five years. Now, once you do this, you're going to sell your crypto and guess what? Tax free. Because charities don't pay tax.
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