Ideal iCLAT Fact Scenarios

Ideal Fact Scenarios for the iCLAT

Ideal Scenarios

Ever since the income limitations for ROTH Conversions were lifted in 2010, the number of conversions by individuals with high levels of income has grown exponentially. The financial reasons for doing so are compelling for right owners of a traditional IRA/401(k)/403(b)/457(b). Many times, however, the conversion decision is postponed, or declined altogether, solely because of the immediate income taxes that will result from the ROTH Conversion. For those people, particularly for those people who already give on an annual or recurring basis, the iCLAT will be an effective way to greatly reduce the resulting income taxes and help facilitate the ROTH CONVERSION decision.

ROTH IRA, 401(k), 403(b) AND 457(b) CONVERSIONS

ACCELERATED INCOME TAX SAVINGS IN THE YEAR OF CONVERSION

For many charitable-minded professionals and executives, retirement brings an unexpected, and often unwelcome, surprise. Since the adjusted gross income (AGI) of most retirees is greatly reduced after retirement, they are no longer able to receive the same level of income tax savings - even if they continue their customary level of charitable giving during retirement. However, establishing an iCLAT in the year prior to retirement allows retirees to "accelerate" the vast majority of the income tax savings from their anticipated annual charitable gifts to the current taxable year, before their AGI drops during their retirement years.

SOON-TO-BE RETIRED EXECUTIVES & PROFESSIONALS

LARGER DISTRIBUTIONS FROM IRA, 401k or OTHER RETIREMENT ASSETS

INCREASED PLANNING FLEXIBILITY

For many successful entrepreneurs and business owners, the sale of their business is one of the largest transactions of their lives. Unfortunately, the IRS is too often an unwanted party to the sale transaction. Establishing an iCLAT with part or all of the cash proceeds after the sale will greatly reduce the tax liability by "accelerating" a large charitable income tax deduction in the same taxable year of the sale. If the business owner is already charitably inclined, then the iCLAT's annual payments to charity are often in amounts that are close to the charitable payments that the business owner was already making prior to the sale transaction. Of course, after the term of the iCLAT ends, then the remaining (or appreciated) sale proceeds will return back to the donor in a non-taxable transaction.