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Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

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I became totally and permanently disabled after a working for 44 years. I returned to college late in life (while working full-time) to fulfill my dream of becoming an RN and at that time found it necessary to secure student loans. Three years after being declared totally and permanently disabled my student loans were discharged. In January 2013 we received a 1099-C form declaring said student loans that were discharged however that amount could be considered as income for 2012. This was a large amount of money and we live on two pensions and social security income.

I started looking on the internet for information regarding 1099-C and felt that this was something that we could not handle alone. I made phone calls locally to a very reputable tax group in a city near us and they said it would cost $500 for an appointment and that they really prefer to do corporate taxes and they referred me to a local person who had worked for them at one time, we called and explained the situation and an appointment was made and then the comment was made that "I will have to do some research on this" and flags immediately went up and we called back and cancelled that appointment. I had been researching the IRSwebsite and every place else I could think of and I was not comfortable doing our own taxes this year. We called another local tax preparer that we had used in the past and made an appointment, however prior to the appointment, while still seeking information regarding our situation,

I came across a website for Gary l. Bode, MSA, CPA, PC in Wilmington, NC. I called Mr. Bodeand explained our situation and asked if he could help. He spoke very knowledgeably regarding the situation and stated that yes; he felt he could help us. As Mr. Bode was in North Carolina and we were in New York I scanned all of our documents including back-up documents for all of our claims and forwarded all to him. Mr. Bode kept in touch with us via email; we have spoken on the telephone several times and have become very comfortable with his knowledge and professionalism. Also, as I am a true "worrier" I have continued looking into information regarding our tax situation and I came upon another web page for Mr. Bode that included testimonials which spoke of his experience with this type of tax situation as it became prevalent during the recession. This reinforced in our minds that we had made the right decision in hiring this person as our tax preparer.

I share all of this as our taxes are now ready to be filed (we do owe tax for 2012 but not the astronomical figure we thought we were facing), and we are confident that they have been prepared with the utmost care by a gentleman who has an excellent working knowledge of the situation we faced and the tax laws that were applicable to said situation.

 

Bill and Carol

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Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

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CPA discusses Charitable Remainder Trusts and Charitable Lead Trusts | 2012

A Wilmington, NC CPA discusses split interest charitable Trusts

We're a CPA firm with a virtual office to accomodate long distance clients. For a free phone consult call (910) 399-2705.

With charitable giving becoming popular as part of estate and/or retirement planning, here is an overview of the most popular charitable/retirement (Estate) combination Trusts. I think most of us want to know our retirement is appropriately funded before supporting a charitable cause.

“Charitable Remainder Trusts (CRTs) and Charitable Lead Trusts (CLTs) are mirror images of each other.”
-Gary Bode, Wilmington NC CPA

Both are irrevocable, split interest Trusts of less than 20 years duration. The split interests are a) some charitable institution and b) the donor (or the donor’s heirs). Both CRTs and CLTs come in two distribution variations: a fixed dollar annuity, and, a fixed percentage of the Trust’s fair market value, as primary pay out amounts. CRTs pay a fixed annuity amount (CRAT), or fixed percentage of the trust (CRUT), to the donor first, with the remainder going to charity. CLTs pay a fixed annuity amount (CLAT), or fixed percentage of the trust (CLUT), to the charity first, with the remainder going to the donor. A CRAT would be appropriate when guaranteed amounts are needed for retirement, or desired as bequests to heirs.

Potential tax benefits of CRTs and CLTs include:

  • They are tax exempt at the Trust level.
  • The donor receives income and gift tax deductions for the year of actual contribution.
  • Low basis assets that have appreciated, like real estate that has increased in value, can be transferred into them and then sold without incurring any income tax.

Additional wording in IRS Revenue Procedure 2007-45, for CLTs, allows for increasing the annual annuity amount, or the percentage of the trust, to the charitable institution over the term of the trust. So the IPCLAT is an Increasing Payment Charitable Lead Annuity Trust.  An article in the July 2010 Journal of Accountancy suggests an application of the IPCLAT is to allow growth of principal in the early years of the trust, with hopes of the economy improving.

The entire acronym jungle of split interest charitable trusts has one obvious concern for anyone considering them as a retirement vehicle: make sure your personal needs for retirement will be met before funding charitable concerns.

Feel free to call us for a free phone consult at (910) 399-2705.

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