The Charitable Remainder Trust Strategy That Lets a 68-Year-Old Sell a $2.4 Million Concentrated Stock Position Without Triggering a $480,000 Tax Bill

1 hour ago 3

David Beren

Sat, May 30, 2026 astatine 11:31 AM CDT 4 min read

Quick Read

A concentrated single-stock presumption worthy $2.4M with lone $180K outgo ground creates a $2.22M embedded superior summation that would trigger astir $640K successful combined federal, state, and nett concern income taxes if sold directly, leaving lone $1.76M to reinvest.
A charitable remainder unitrust (CRUT) lets the holder transportation appreciated shares tax-free, debar the contiguous superior gains tax, and make a six-figure income taxation deduction portion inactive receiving yearly status income, though the main becomes irrevocable erstwhile contributed to the trust.
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A 68-year-old retired enforcement sits connected $2.4 cardinal of a azygous stock, apt shares from a long-ago IPO oregon decades astatine a erstwhile employer. Her outgo ground is $180,000, meaning astir $2.22 cardinal of embedded semipermanent superior gain. She wants to diversify, make status income, and yet permission thing to her alma mater and a assemblage foundation. What she does not privation is to message the IRS a cheque for astir fractional a cardinal dollars connected the mode out.

Variations of this question aboveground perpetually connected the Bogleheads forum and r/fatFIRE, usually phrased arsenic immoderate mentation of "I person 1 banal that ate my portfolio, and I can't merchantability without getting destroyed connected taxes." The charitable remainder unitrust, governed by IRC Section 664, is the instrumentality astir often missed by readers who are not already moving with an property attorney.

The Situation successful One Block

Age: 68, retired, successful bully health
Concentrated position: $2.4M marketplace value, $180K basis
Embedded semipermanent gain: $2.22M
Charitable intent: Yes, but not the afloat position
Liquidity needed from principal: None expected

The Tax Friction Is the Whole Story

The lone fiscal hostility that matters is the spread betwixt selling successful a taxable relationship versus a tax-exempt structure. Run the direct-sale mathematics astatine the apical 20% national superior gains rate, positive the 3.8% NIIT, positive a typical 5% authorities levy. On $2.22 cardinal successful gains, that is astir $640,000 successful combined tax. She nets $1.76 cardinal to reinvest.

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Most Americans drastically underestimate however overmuch they request to discontinue and overestimate however prepared they are. But information shows that people with 1 habit person much than treble the savings of those who don’t.

Now, way it done a charitable remainder unitrust. She contributes appreciated shares to the CRUT. The trustee sells wrong the trust, and due to the fact that the CRUT is simply a tax-exempt entity nether Section 664, the afloat $2.4 cardinal is reinvested tax-free. She avoids the contiguous superior gains hit, picks up a charitable income taxation deduction (the contiguous worth of the remainder, utilizing the IRS Section 7520 rate), and captures income taxation savings dispersed implicit six years.

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