Charitable Lead Annuity Trust (ECLAT)

[ChiHoang]

I have clients that put in $1,000,000 in ECLAT. Is it true that they can use up to 30% adjusted gross income for the deduction of the $1,000,000 per year that they placed into that charitable trust ? If so, do I deduct that on schedule A under cash contribution ?

Thanks for your answer.

[ChiHoang]

Can anyone answer my question regarding the ECLAT (Charitable Lead Annuity Trust) that I sent yesterday ? Thanks

[sjrcpa]

This is too complex for a quick, free answer from strangers on the internt on April 12.

First, the charitable contribution deduction is not $1,000,000. There are calculations to perform.

[Choang]

Is it not 30% of AGI ?

[sjrcpa]

Maybe. I am saying the charitable contribution itself is probably not $1,000,000.

[ChiHoang]

They contribute $1,000,000 to the CLAT. Do I enter $1,000,000 or 30% of their AGI on schedule A ?

Can anyone answer ? or send me the link for this charitable contribution.

Thanks for your help. 

[sjrcpa]

Once you determine the amount of the $1,000,000 that is a Charitable Contribution enter that in the software, as the appropriate type of contribution and the software will apply the limit.

You are not understanding my point.

That trust has a charitable beneficiary and other beneficiary(ies). Only part of the $1,000,000 is a charitable contribution and it involves calculations based on age, interest rates, term, etc.

[ChiHoang]

Yes, $1,000,000 is a charitable contribution (present value of annuity limited by 7520reg.). Do I input that amount in the "Cash Contribution" section and name it CLAT contribution? Do I have to select "type" ? 

I am using ProSeries Basic. When I enter $1,000,000 CLAT contribution, it deducts $450K, more than 30% of $750K AGI.  Do I do something wrong ?

Thanks in advance for your quick response.

[ChiHoang]

I think I got it. I have to select "other than 50% type charity" type to get the deductions limit to 30% of AGI.