Charitable Lead Annuity Trust · 2020-01-03 · Charitable Lead Annuity Trust - Transfer $1M ShopRight, Inc. to 20-Year Shark-Fin CLAT Annual Net to Heirs Comparison Jack & Jill Flash

Charitable Lead Annuity Trust

AN ANALYSIS PREPARED EXCLUSIVELY FOR

Jack & Jill Flash

Transfer $1M ShopRight, Inc. to 20-Year Shark-Fin CLAT

An Illustration of an Inter Vivos Charitable Lead Annuity Trust

1

Charitable Lead Annuity Trust - Transfer $1M ShopRight, Inc. to 20-Year Shark-Fin CLAT

SummaryJack & Jill Flash

Inter Vivos

Projected Results in 2039 Baseline CLAT

Charitable deduction NA 650,000

Net transferable value 6,376,027 6,468,113

Estate taxes or tax savings -2,008,655 146,827

Deferred capital gains and Medicare taxes 0 -1,077,266

Net amount to 2nd generation 4,367,372 5,537,674

Future value of CLAT payouts 990,867

Planning advantage/-disadvantage to 2nd generation 1,170,302

Present value of advantage/-disadvantage @ 3.0% 648,020

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000

Baseline

CLAT

Wealth Transfer Comparison in $Thousands

Amount to Heirs Amount to Charity

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Actuarial SummaryJack & Jill Flash

CLAT payout rate Variable

Income factor used 100.000%

Remainder factor used 0.000%

Annuity exhaustion test of the Sec. 7520 Regs & Rev. Rul. 77-454 Passed

Taxable gift 0

Relevant Actuarial Calculations & Applicable Tests

100.0%

0.0%

Actuarial CLAT Split at the Time of Contribution

Lead Interest Remainder Interest

3


AssumptionsJack & Jill Flash

Personal Jack Jill

Age 55.0 52.0

Calculated life expectancy 85.5 84.3

Life expectancy override 90.0 90.0

Planning Illustration

Transfer date 01-Jan-2020

Type of analysis Inter vivos

Tax laws to apply - income taxes TCJA provisions sunset after 2025

Tax laws to apply - estate, gift & GST TCJA provisions sunset after 2025

Transfer of Property

Transferor Jack

Gift-splitting election Yes

If Yes, adjust estate tax for consenting spouse's share Yes

Trust Assumptions

CLAT planning approach Shark-fin CLAT

Type of trust Term

Trust term 20 years

CLAT payout rate Variable

CLAT payment date End of year

CLAT payout frequency Annual

Section 7520 rate 2.0%

Estate & Gift Tax Jack Jill

DSUE amount inherited 0 0

Post-1976 adjusted taxable gifts 0 0

Unified credit used 0 0

Property Transferred

Undiscounted fair market value 1,000,000

Tax basis 300,000

Gift tax valuation discount 35.0%

Estate tax valuation discount 35.0%

4


AssumptionsJack & Jill Flash

Charitable Deduction

Grantor trust Yes

Total percentage of lead interest deductible 100.0%

Years needed to utilize deduction 2

Income tax deduction recapture calculation method Internal Revenue Code

Tax Rates Jack Transferee

Federal tax bracket See schedule See schedule

Federal capital gains tax rate See schedule See schedule

State income tax rate 5.0% 5.0%

Charitable income tax deduction rate See schedule NA

Estate tax rate See schedule 40.0%

Transferred Property Investment Rates

Current cash yield 5.0%

Inc/-dec rate of cash yield 0.0%

Percentage of yield subject to tax 100.0%

Qualified dividend percentage 100.0%

Base growth rate 7.0%

Other Investment Rates CLAT Non-CLAT

Taxable income rate 2.0% 2.0%

Qualified dividend percentage 100.0% 100.0%

Growth rate 6.0% 6.0%

Tax-exempt income rate 0.0% 0.0%

Portfolio turnover rate 25.0% 25.0%

Percentage of taxable income and realized gains subject to Medicare surtax 100.0% 100.0%

Charity's rate of return 8.0% NA

Opportunity cost rate associated with payment of transfer taxes NA 7.1%

Present value discount rate NA 3.0%

Other

CLAT property reverts to grantor at termination No

Summary results are shown net of deferred capital gains and Medicare taxes Yes

Inflation rate 3.0%

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Inter Vivos CLAT vs. Baseline ComparisonJack & Jill Flash

Inter Vivos CLAT Adv/ PV of Adv/

Projected Results in 2039 Baseline CLAT -Disadv -Disadv

Charitable deduction NA 650,000 261,300 257,495

Net transferable value 6,376,027 6,468,113 92,086 50,990

Estate taxes or tax savings -2,008,655 146,827 2,155,482 1,193,535

Deferred capital gains and Medicare taxes 0 -1,077,266 -1,077,266 -596,504

Net amount to heirs 4,367,372 5,537,674 1,170,302 648,020

Future value of CLAT payouts 990,867 990,867 212,589

Combined wealth transfer 4,367,372 6,528,541 2,161,169 860,609

On the basis of current assumptions, utilizing a CLAT in this manner will

maximize the family's after-tax wealth.

The current analysis assumes a back-loaded CRAT payout rate.

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000

Baseline

Inter Vivos CLAT

After-Tax Wealth Comparison in $Thousands

Amount to Heirs Amount to Charity

6

Charitable Lead Annuity Trust - Transfer to 20-Year Shark-Fin CLAT

Annual Net to Heirs ComparisonJack & Jill Flash Part 1 of 2

Ending Estate Net

Year Balance Taxes to Heirs

2020 1,106,500 292,800 813,700

2021 1,223,030 328,926 894,104

2022 1,350,363 368,639 981,724

2023 1,489,351 412,229 1,077,122

2024 1,640,927 460,014 1,180,913

2025 1,806,108 512,341 1,293,767

2026 1,986,182 569,664 1,416,519

2027 2,182,200 632,334 1,549,866

2028 2,395,463 700,801 1,694,662

2029 2,627,382 775,552 1,851,830

2030 2,879,479 857,112 2,022,366

2031 3,153,399 946,053 2,207,346

2032 3,450,920 1,042,990 2,407,930

2033 3,773,958 1,148,589 2,625,370

2034 4,124,583 1,263,569 2,861,014

2035 4,505,026 1,388,708 3,116,319

2036 4,917,694 1,524,844 3,392,851

2037 5,365,182 1,672,882 3,692,300

2038 5,850,288 1,833,801 4,016,487

2039 6,376,027 2,008,655 4,367,372

Baseline Illustration

7


Annual Net to Heirs ComparisonJack & Jill Flash Part 2 of 2

Grantor's Estate Tax/ Deferred Future Value

Ending CLAT-Related Projected Capital Gains CLAT Adv/ of CLAT Combined

CLAT Accumulations Estate Tax & Medicare Net -Disadv to Payouts Adv/

Year Balance Net of Recapture Cost Taxes to Heirs Family 8.0% -Disadv

2020 1,119,000 15,423 6,169 207,900 920,354 106,654 1,000 107,654

2021 1,250,320 39,501 15,801 228,718 1,045,303 151,198 2,080 153,278

2022 1,395,142 63,231 25,292 251,489 1,181,591 199,867 3,246 203,114

2023 1,554,755 86,626 34,651 276,277 1,330,453 253,331 4,506 257,837

2024 1,730,567 109,657 43,863 303,175 1,493,186 312,273 5,867 318,139

2025 1,924,114 132,251 52,900 332,297 1,671,168 377,401 7,336 384,737

2026 2,137,073 149,035 59,614 361,085 1,865,408 448,889 8,923 457,812

2027 2,371,270 172,501 69,001 394,833 2,079,937 530,071 10,637 540,708

2028 2,628,699 195,265 78,106 431,253 2,314,605 619,943 12,488 632,431

2029 2,911,533 208,058 83,223 470,536 2,565,832 714,002 14,487 728,488

2030 3,221,142 188,469 75,388 512,894 2,821,329 798,962 17,645 816,608

2031 3,561,027 164,775 65,910 558,545 3,101,347 894,001 21,057 915,058

2032 3,933,997 136,493 54,597 607,741 3,408,151 1,000,221 24,742 1,024,963

2033 4,343,110 103,085 41,234 660,756 3,744,206 1,118,836 28,721 1,147,557

2034 4,791,701 63,955 25,582 717,883 4,112,191 1,251,177 33,019 1,284,196

2035 5,283,398 18,447 7,379 779,440 4,515,025 1,398,707 37,660 1,436,367

2036 5,822,156 -34,168 -13,667 845,773 4,955,883 1,563,032 42,673 1,605,705

2037 6,412,282 -94,690 -37,876 917,249 5,438,218 1,745,918 48,087 1,794,005

2038 7,058,461 -164,002 -65,601 994,270 5,965,790 1,949,304 53,934 2,003,237

2039 6,835,181 -367,067 -146,827 1,077,266 5,537,674 1,170,302 990,867 2,161,169

Inter Vivos CLAT Scenario CLAT Summary

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CLAT Illustration - 2nd Generation TransferJack & Jill Flash

Inter Vivos Grantor Trust-Type CLAT - Transfer to 2nd Generation

On the basis of current assuptions, utilizing a CLAT in the illustrated manner is projected to produce a net after-tax

advantage of $1,170,302 in 2039, or $648,020 in today's dollars, not including the annual distributions to charity.

JackTransfers

$1,000,000

Inter Vivos CLAT$1,000,000

CLAT Valuein 2039

$6,835,181

Net to Heirsin 2039

$5,537,674

Cap Gains & HI Taxes

$1,077,266

CharityFV of Payouts

$990,867

CharityCLAT Payouts

$960,619

Charitable Deduction$650,000

Charitable Deduction Benefit

$261,300

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Jack & Jill Flash


Sensitivity Analyses

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Sensitivity Analysis - Growth RatesJack & Jill Flash

2nd Gen GST Cumulative FV to To 2nd To 3rd

CLAT CLAT Payouts Charity Generation Generation

1,089,085 NA 960,619 990,867 -156,440 NA

1,930,912 NA 960,619 990,867 123,313 NA

3,109,526 NA 960,619 990,867 499,907 NA

4,791,790 NA 960,619 990,867 1,044,255 NA

7,231,685 NA 960,619 990,867 1,878,684 NA

10,645,001 NA 960,619 990,867 3,039,327 NA10.0%

2039 Net to Heirs Charitable Transfers Projected Adv/-Disadv

Growth

0.0%

2.0%

4.0%

6.0%

8.0%

The illustration above shows the impact of pretax growth rate assumptions (inside and outside the trust) on the projected

results. The graph shows the advantages or disadvantages of a CLAT, as compared to the baseline scenario, in

today's dollars. Note that all other assumptions are the same as those listed on the Assumptions schedule.

$200,000

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

0.0% 2.0% 4.0% 6.0% 8.0% 10.0%

Pretax Growth Rates

Planning Advantage/-Disadvantage over Baseline to 2nd Generation in Today's Dollars

11


Sensitivity Analysis - Portfolio Turnover RatesJack & Jill Flash

2nd Gen GST Cumulative FV to To 2nd To 3rd

CLAT CLAT Payouts Charity Generation Generation

5,341,905 NA 960,619 990,867 824,236 NA

5,514,932 NA 960,619 990,867 1,132,548 NA

5,589,618 NA 960,619 990,867 1,251,083 NA

5,654,238 NA 960,619 990,867 1,335,987 NA

5,692,112 NA 960,619 990,867 1,385,410 NA

5,717,052 NA 960,619 990,867 1,417,783 NA100.0%

2039 Net to Heirs Charitable Transfers Projected Adv/-Disadv

Turnover

0.0%

20.0%

40.0%

60.0%

80.0%

results. The graph shows the advantages or disadvantages of a CLAT, as compared to the baseline scenario, in

today's dollars. Note that all other assumptions are the same as those listed on the Assumptions schedule.

The illustration above shows the impact of portfolio turnover rate assumptions (inside and outside the trust) on the projected

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

Portfolio Turnover Rates

Planning Advantage/-Disadvantage over Baseline to 2nd Generation in Today's Dollars

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Sensitivity Analysis - CLAT Payout RatesJack & Jill Flash

Gift Tax Char Cumulative 2nd 3rd To 2nd To 3rd

Deduction Payouts Generation Generation Generation Generation

531,421 650,000 5,049,278 NA 681,906 NA

650,000 910,000 4,636,251 NA 268,879 NA

650,000 1,170,000 4,009,095 NA -358,277 NA

650,000 1,430,000 3,131,380 NA -1,235,992 NA

650,000 1,690,000 1,947,939 NA -2,419,433 NA

650,000 1,950,000 476,848 NA -3,890,524 NA15.000%

2039 Charitable Transfers Net to Heirs Projected Adv/-Disadv

Payout

5.000%

7.000%

9.000%

11.000%

13.000%

relationship between the CLAT payout rate and a) the charitable deduction, b) the cumulative payouts to charity and c) the

net projected transfer to heirs. All other assumptions are the same as those listed on the Assumptions schedule.

The illustration above shows the impact of the CLAT payout rate assumption on the projected results. The graph shows the

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

5.000% 7.000% 9.000% 11.000% 13.000% 15.000%

CLAT Payout Rates

CLAT Trends

Gift Tax Charitable Deduction Cumulative Payouts Net to 2nd Generation

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Jack & Jill Flash


Supporting Schedules for

BASELINE SCENARIO

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Baseline IllustrationJack & Jill Flash Part 1 of 2

Gross

Estate

Beginning Taxable Unrealized Ending Value

Year Balance Income Growth Gains Balance 65.0%

Start 1,000,000 700,000 1,000,000 0

2020 1,000,000 50,000 70,000 770,000 1,070,000 695,500

2021 1,070,000 53,500 74,900 844,900 1,144,900 744,185

2022 1,144,900 57,245 80,143 925,043 1,225,043 796,278

2023 1,225,043 61,252 85,753 1,010,796 1,310,796 852,017

2024 1,310,796 65,540 91,756 1,102,552 1,402,552 911,659

2025 1,402,552 70,128 98,179 1,200,730 1,500,730 975,475

2026 1,500,730 75,037 105,051 1,305,781 1,605,781 1,043,758

2027 1,605,781 80,289 112,405 1,418,186 1,718,186 1,116,821

2028 1,718,186 85,909 120,273 1,538,459 1,838,459 1,194,998

2029 1,838,459 91,923 128,692 1,667,151 1,967,151 1,278,648

2030 1,967,151 98,358 137,701 1,804,852 2,104,852 1,368,154

2031 2,104,852 105,243 147,340 1,952,192 2,252,192 1,463,925

2032 2,252,192 112,610 157,653 2,109,845 2,409,845 1,566,399

2033 2,409,845 120,492 168,689 2,278,534 2,578,534 1,676,047

2034 2,578,534 128,927 180,497 2,459,032 2,759,032 1,793,371

2035 2,759,032 137,952 193,132 2,652,164 2,952,164 1,918,906

2036 2,952,164 147,608 206,651 2,858,815 3,158,815 2,053,230

2037 3,158,815 157,941 221,117 3,079,932 3,379,932 2,196,956

2038 3,379,932 168,997 236,595 3,316,528 3,616,528 2,350,743

2039 3,616,528 180,826 253,157 0 3,869,684 2,515,295

Property Retained in the Family

15


Baseline IllustrationJack & Jill Flash Part 2 of 2

Beginning Taxable Realized Transferred Income Ending

Investment Income Growth Gains Unrealized Property & Medicare Capital Gains Investment

Year Balance 2.0% 6.0% 25.0% Gains Cash Yield Taxes Taxes Balance

Start 0 0

2020 0 0 0 0 0 50,000 1,900 11,600 36,500

2021 36,500 730 2,190 548 1,643 53,500 2,082 12,708 78,130

2022 78,130 1,563 4,688 1,583 4,748 57,245 2,295 14,011 125,320

2023 125,320 2,506 7,519 3,067 9,200 61,252 2,539 15,503 178,555

2024 178,555 3,571 10,713 4,978 14,935 65,540 2,815 17,189 238,375

2025 238,375 4,768 14,303 7,309 21,928 70,128 3,124 19,071 305,378

2026 305,378 6,108 18,323 10,063 30,188 75,037 3,466 20,978 380,401

2027 380,401 7,608 22,824 13,253 39,759 80,289 3,844 23,265 464,014

2028 464,014 9,280 27,841 16,900 50,700 85,909 4,259 25,781 557,004

2029 557,004 11,140 33,420 21,030 63,090 91,923 4,716 28,541 660,231

2030 660,231 13,205 39,614 25,676 77,028 98,358 5,215 31,565 774,627

2031 774,627 15,493 46,478 30,876 92,629 105,243 5,761 34,871 901,208

2032 901,208 18,024 54,072 36,675 110,026 112,610 6,358 38,481 1,041,075

2033 1,041,075 20,821 62,464 43,123 129,368 120,492 7,009 42,420 1,195,424

2034 1,195,424 23,908 71,725 50,273 150,820 128,927 7,718 46,715 1,365,552

2035 1,365,552 27,311 81,933 58,188 174,565 137,952 8,491 51,394 1,552,863

2036 1,552,863 31,057 93,172 66,934 200,803 147,608 9,333 56,488 1,758,879

2037 1,758,879 35,178 105,533 76,584 229,751 157,941 10,249 62,031 1,985,250

2038 1,985,250 39,705 119,115 87,217 261,650 168,997 11,245 68,061 2,233,760

2039 2,233,760 44,675 134,026 98,919 0 180,826 12,328 74,617 2,506,343

Investment Fund

16



Jack & Jill Flash



CHARITABLE LEAD ANNUITY TRUST SCENARIO

17


Inter Vivos Grantor Trust-Type CLAT IllustrationJack & Jill Flash Part 1 of 4

Taxable

Beginning Income to Unrealized CLAT EndingYear Balance Investments Growth Gains Payouts Balance

Start 1,000,000 700,000 1,000,000

2020 1,000,000 50,000 70,000 770,000 0 1,070,000

2021 1,070,000 53,500 74,900 844,900 0 1,144,900

2022 1,144,900 57,245 80,143 925,043 0 1,225,043

2023 1,225,043 61,252 85,753 1,010,796 0 1,310,796

2024 1,310,796 65,540 91,756 1,102,552 0 1,402,552

2025 1,402,552 70,128 98,179 1,200,730 0 1,500,730

2026 1,500,730 75,037 105,051 1,305,781 0 1,605,781

2027 1,605,781 80,289 112,405 1,418,186 0 1,718,186

2028 1,718,186 85,909 120,273 1,538,459 0 1,838,459

2029 1,838,459 91,923 128,692 1,667,151 0 1,967,151

2030 1,967,151 98,358 137,701 1,804,852 0 2,104,852

2031 2,104,852 105,243 147,340 1,952,192 0 2,252,192

2032 2,252,192 112,610 157,653 2,109,845 0 2,409,845

2033 2,409,845 120,492 168,689 2,278,534 0 2,578,534

2034 2,578,534 128,927 180,497 2,459,032 0 2,759,032

2035 2,759,032 137,952 193,132 2,652,164 0 2,952,164

2036 2,952,164 147,608 206,651 2,858,815 0 3,158,815

2037 3,158,815 157,941 221,117 3,079,932 0 3,379,932

2038 3,379,932 168,997 236,595 3,316,528 0 3,616,528

2039 3,616,528 180,826 253,157 3,569,684 0 3,869,684

Property Transferred to the CLAT

18



Beginning Taxable Realized Transferred

Investment Income Growth Gains Unrealized Property CLATYear Balance 2.0% 6.0% 25.0% Gains Cash Yield Payouts

Start 0 0 0

2020 0 0 0 0 0 50,000 1,000

2021 49,000 980 2,940 735 2,205 53,500 1,000

2022 105,420 2,108 6,325 2,133 6,398 57,245 1,000

2023 170,099 3,402 10,206 4,151 12,453 61,252 1,000

2024 243,959 4,879 14,638 6,773 20,318 65,540 1,000

2025 328,015 6,560 19,681 10,000 29,999 70,128 1,000

2026 423,384 8,468 25,403 13,850 41,551 75,037 1,000

2027 531,291 10,626 31,877 18,357 55,072 80,289 1,000

2028 653,084 13,062 39,185 23,564 70,693 85,909 1,000

2029 790,240 15,805 47,414 29,527 88,580 91,923 1,000

2030 944,382 18,888 56,663 36,311 108,932 98,358 2,000

2031 1,116,290 22,326 66,977 43,977 131,932 105,243 2,000

2032 1,308,836 26,177 78,530 52,616 157,847 112,610 2,000

2033 1,524,152 30,483 91,449 62,324 186,972 120,492 2,000

2034 1,764,576 35,292 105,875 73,212 219,635 128,927 2,000

2035 2,032,669 40,653 121,960 85,399 256,196 137,952 2,000

2036 2,331,234 46,625 139,874 99,018 297,053 147,608 2,000

2037 2,663,341 53,267 159,800 114,213 342,640 157,941 2,000

2038 3,032,349 60,647 181,941 131,145 393,436 168,997 2,000

2039 3,441,934 68,839 206,516 149,988 449,964 180,826 932,619

CLAT Investment Fund

19



Qualified

End Present Value Dividends + Planned Triggered

Valuation of Year Discount of Payouts Ordinary Capital CapitalYear for Payout Payout Period 650,000 Income Gains Gains Corpus

Start

2020 650,000 1,000 1.00000 980 1,000 0 0 0

2021 650,000 1,000 2.00000 961 987 13 0 0

2022 650,000 1,000 3.00000 942 965 35 0 0

2023 650,000 1,000 4.00000 924 940 60 0 0

2024 650,000 1,000 5.00000 906 912 88 0 0

2025 650,000 1,000 6.00000 888 885 115 0 0

2026 650,000 1,000 7.00000 871 858 142 0 0

2027 650,000 1,000 8.00000 853 832 168 0 0

2028 650,000 1,000 9.00000 837 808 192 0 0

2029 650,000 1,000 10.00000 820 785 215 0 0

2030 650,000 2,000 11.00000 1,609 1,527 473 0 0

2031 650,000 2,000 12.00000 1,577 1,487 513 0 0

2032 650,000 2,000 13.00000 1,546 1,450 550 0 0

2033 650,000 2,000 14.00000 1,516 1,416 584 0 0

2034 650,000 2,000 15.00000 1,486 1,383 617 0 0

2035 650,000 2,000 16.00000 1,457 1,353 647 0 0

2036 650,000 2,000 17.00000 1,428 1,325 675 0 0

2037 650,000 2,000 18.00000 1,400 1,298 702 0 0

2038 650,000 2,000 19.00000 1,373 1,273 727 0 0

2039 650,000 932,619 20.00000 627,626 249,665 149,988 313,428 219,538

CLAT Payouts to Charity

20

Charitable Lead Annuity Trust - Transfer $1M to 20-Year Shark-Fin CLAT

Inter Vivos Grantor Trust-Type CLATJack & Jill Flash Part 4 of 4

Qualified

Dividends + Ending

Ordinary Qualified Capital InvestmentYear Income Dividends Gains Balance

Start 0

2020 49,000 49,000 0 49,000

2021 53,493 53,493 722 105,420

2022 58,388 58,388 2,098 170,099

2023 63,714 63,714 4,091 243,959

2024 69,507 69,507 6,685 328,015

2025 75,803 75,803 9,884 423,384

2026 82,646 82,646 13,708 531,291

2027 90,083 90,083 18,189 653,084

2028 98,163 98,163 23,372 790,240

2029 106,943 106,943 29,312 944,382

2030 115,718 115,718 35,838 1,116,290

2031 126,081 126,081 43,465 1,308,836

2032 137,336 137,336 52,066 1,524,152

2033 149,560 149,560 61,740 1,764,576

2034 162,835 162,835 72,595 2,032,669

2035 177,252 177,252 84,752 2,331,234

2036 192,908 192,908 98,342 2,663,341

2037 209,910 209,910 113,511 3,032,349

2038 228,371 228,371 130,418 3,441,934

2039 0 0 0 2,965,496

Undistributed Current-Year Income

21


CLAT Grantor IllustrationJack & Jill Flash Part 1 of 2

Income Tax

Charitable Taxable Realized

Beginning Deduction Income Growth Gains UnrealizedYear Balance Benefit 2.0% 6.0% 25.0% Gains

2020 0 130,650 2,613 7,839 1,960 5,879

2021 126,367 130,650 5,140 15,421 5,325 15,975

2022 260,040 5,201 15,602 7,894 23,683

2023 261,273 5,225 15,676 9,840 29,520

2024 260,634 5,213 15,638 11,289 33,868

2025 257,992 5,160 15,480 12,337 37,011

2026 253,171 5,063 15,190 13,050 39,151

2027 246,152 4,923 14,769 13,480 40,440

2028 236,502 4,730 14,190 13,658 40,973

2029 223,919 4,478 13,435 13,602 40,806

2030 208,058 4,161 12,483 13,322 39,967

2031 188,469 3,769 11,308 12,819 38,456

2032 164,775 3,296 9,887 12,086 36,257

2033 136,493 2,730 8,190 11,112 33,335

2034 103,085 2,062 6,185 9,880 29,640

2035 63,955 1,279 3,837 8,369 25,108

2036 18,447 369 1,107 6,554 19,661

2037 -34,168 -683 -2,050 4,403 13,208

2038 -94,690 -1,894 -5,681 1,882 5,645

2039 -164,002 -3,280 -9,840 -1,049 0

Current-Year Returns

22


CLAT Grantor IllustrationJack & Jill Flash Part 2 of 2

Potential Ending

Qualified Recapture of Balance Net

Dividends + Income Ending Charitable of Deduction

Ordinary Qualified Capital & Medicare Capital Gains Balance Deduction BenefitYear Income Dividends Gains Taxes Taxes Accumulated Benefit Recapture

2020 50,000 50,000 0 2,074 12,661 126,367 110,944 15,423

2021 54,480 54,480 13 2,468 15,070 260,040 220,538 39,501

2022 59,353 59,353 35 2,754 16,816 261,273 198,041 63,231

2023 64,654 64,654 60 3,032 18,509 260,634 174,007 86,626

2024 70,419 70,419 88 3,306 20,186 257,992 148,336 109,657

2025 76,688 76,688 115 3,583 21,878 253,171 120,920 132,251

2026 83,504 83,504 142 3,867 23,405 246,152 97,118 149,035

2027 90,915 90,915 168 4,160 25,182 236,502 64,001 172,501

2028 98,971 98,971 192 4,467 27,037 223,919 28,654 195,265

2029 107,728 107,728 215 4,789 28,985 208,058 0 208,058

2030 117,245 117,245 473 5,138 31,096 188,469 0 188,469

2031 127,568 127,568 513 5,497 33,274 164,775 0 164,775

2032 138,786 138,786 550 5,879 35,585 136,493 0 136,493

2033 150,975 150,975 584 6,285 38,042 103,085 0 103,085

2034 164,218 164,218 617 6,718 40,659 63,955 0 63,955

2035 178,605 178,605 647 7,178 43,447 18,447 0 18,447

2036 194,233 194,233 675 7,670 46,421 -34,168 0 -34,168

2037 211,208 211,208 702 8,194 49,595 -94,690 0 -94,690

2038 229,644 229,644 727 8,754 52,982 -164,002 0 -164,002

2039 249,665 249,665 463,416 26,933 163,013 -367,067 0 -367,067

CLAT Taxable Income Taxes

23


CLAT Grantor Recapture of Income Tax Charitable DeductionJack & Jill Flash

Cumulative Cumulative Potential Potential

Discounted Charitable Recapture of Recapture of

Expected Discount Discounted CLAT Deduction Charitable Charitable

Elapsed Years Factor CLAT CLAT Income/Gains Claimed Deduction Deduction

Year Years Remaining 2.00% Income/Gains Income/Gains (A) (B) (B) - (A) Benefit

2020 1.000000 19.000000 0.980392 50,000 49,020 49,020 325,000 275,980 110,944

2021 2.000000 18.000000 0.961169 54,493 52,377 101,397 650,000 548,603 220,538

2022 3.000000 17.000000 0.942322 59,388 55,963 157,360 650,000 492,640 198,041

2023 4.000000 16.000000 0.923845 64,714 59,786 217,146 650,000 432,854 174,007

2024 5.000000 15.000000 0.905731 70,507 63,860 281,006 650,000 368,994 148,336

2025 6.000000 14.000000 0.887971 76,803 68,199 349,205 650,000 300,795 120,920

2026 7.000000 13.000000 0.870560 83,646 72,819 422,024 650,000 227,976 97,118

2027 8.000000 12.000000 0.853490 91,083 77,738 499,763 650,000 150,237 64,001

2028 9.000000 11.000000 0.836755 99,163 82,975 582,738 650,000 67,262 28,654

2029 10.000000 10.000000 0.820348 107,943 88,551 671,289 650,000 0 0

2030 11.000000 9.000000 0.804263 117,718 94,676 765,965 650,000 0 0

2031 12.000000 8.000000 0.788493 128,081 100,991 866,956 650,000 0 0

2032 13.000000 7.000000 0.773033 139,336 107,711 974,667 650,000 0 0

2033 14.000000 6.000000 0.757875 151,560 114,863 1,089,531 650,000 0 0

2034 15.000000 5.000000 0.743015 164,835 122,475 1,212,006 650,000 0 0

2035 16.000000 4.000000 0.728446 179,252 130,575 1,342,581 650,000 0 0

2036 17.000000 3.000000 0.714163 194,908 139,196 1,481,777 650,000 0 0

2037 18.000000 2.000000 0.700159 211,910 148,370 1,630,147 650,000 0 0

2038 19.000000 1.000000 0.686431 230,371 158,133 1,788,281 650,000 0 0

2039 20.000000 0.000000 0.672971 713,081 479,883 2,268,164 650,000 0 0

24


CLAT Basis & Gains Triggered on PayoutJack & Jill Flash

Tentative Potential Ending

Predistribution CLAT Adjusted Post-Payout Triggering Gains AdjustedYear Basis Payout Basis Value Payout Triggered Basis

2020 350,000 1,000 349,000 1,119,000 0 0 349,000

2021 404,215 1,000 403,215 1,250,320 0 0 403,215

2022 464,701 1,000 463,701 1,395,142 0 0 463,701

2023 532,506 1,000 531,506 1,554,755 0 0 531,506

2024 608,697 1,000 607,697 1,730,567 0 0 607,697

2025 694,385 1,000 693,385 1,924,114 0 0 693,385

2026 790,740 1,000 789,740 2,137,073 0 0 789,740

2027 899,012 1,000 898,012 2,371,270 0 0 898,012

2028 1,020,547 1,000 1,019,547 2,628,699 0 0 1,019,547

2029 1,156,801 1,000 1,155,801 2,911,533 0 0 1,155,801

2030 1,309,357 2,000 1,307,357 3,221,142 0 0 1,307,357

2031 1,478,903 2,000 1,476,903 3,561,027 0 0 1,476,903

2032 1,668,305 2,000 1,666,305 3,933,997 0 0 1,666,305

2033 1,879,604 2,000 1,877,604 4,343,110 0 0 1,877,604

2034 2,115,034 2,000 2,113,034 4,791,701 0 0 2,113,034

2035 2,377,038 2,000 2,375,038 5,283,398 0 0 2,375,038

2036 2,668,288 2,000 2,666,288 5,822,156 0 0 2,666,288

2037 2,991,709 2,000 2,989,709 6,412,282 0 0 2,989,709

2038 3,350,498 2,000 3,348,498 7,058,461 0 0 3,348,498

2039 3,748,151 932,619 2,815,532 6,835,181 532,966 313,428 3,128,960

25



Jack & Jill Flash



TAX RATES

26


Tax RatesJack & Jill Flash

Federal Effective State Combined Federal Effective State Combined Heirs

Ordinary Income Tax Ordinary Combined Charitable Ordinary Income Tax Ordinary Combined

Income Tax Rate Income Tax Capital Gains Deduction Estate Tax Income Tax Rate Income Tax Capital GainsYear Rate 5.0% Rate Tax Rate Tax Rate Rate Rate 5.0% Rate Tax Rate

2020 37.0% 3.2% 40.2% 23.2% 40.2% 40.0% 37.0% 3.2% 40.2% 23.2%

2021 37.0% 3.2% 40.2% 23.2% 40.2% 40.0% 37.0% 3.2% 40.2% 23.2%

2022 37.0% 3.2% 40.2% 23.2% 40.0% 37.0% 3.2% 40.2% 23.2%

2023 37.0% 3.2% 40.2% 23.2% 40.0% 37.0% 3.2% 40.2% 23.2%

2024 37.0% 3.2% 40.2% 23.2% 40.0% 37.0% 3.2% 40.2% 23.2%

2025 37.0% 3.2% 40.2% 23.2% 40.0% 37.0% 3.2% 40.2% 23.2%

2026 39.6% 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0%

2027 39.6% 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0%

2028 39.6% 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0%

2029 39.6% 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0%

2030 39.6% 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0%

2031 39.6% 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0%

2032 39.6% 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0%

2033 39.6% 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0%

2034 39.6% 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0%

2035 39.6% 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0%

2036 39.6% 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0%

2037 39.6% 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0%

2038 39.6% 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0%

2039 39.6% 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0%

Jack Heirs

27

Documents

Charitable Lead Annuity Trust · 2020-01-03 · Charitable Lead Annuity Trust - Transfer $1M ShopRight, Inc. to 20-Year Shark-Fin CLAT Annual Net to Heirs Comparison Jack & Jill Flash