Flip Charitable Remainder Unitrust

Transcription

1 Flip Charitable Remainder Unitrust An Illustration of the Use of a Net Income with Make-up Charitable Remainder Unitrust that "Flips" or Converts to a Standard Charitable Remainder Unitrust in Year 7 AN ANALYSIS PREPARED EXCLUSIVELY FOR Transfer $1M Land to 20-Year FlipCRUT 1

2 Disclaimer This financial plan is designed to provide educational and/or general information and is not intended to provide specific legal, accounting and/or tax advice. Any comparisons and projections including expected rates of return are presented for purposes of illustration only. Nevertheless, we believe that the comparisons as well as the other projections shown provide an important and valid basis for consideration when planning for your financial future. IMPORTANT: The projections or other information generated by this financial plan regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results herein may vary with each use of the software tool(s) used to generate this financial plan and over time. The financial plan may contain ideas for your consideration concerning aspects of your life such as tax, retirement and estate planning, but these are not presented as, and must not be taken for, legal or tax advice. It is your responsibility to determine if, and how, the suggestions contained in the financial plan should be implemented or otherwise followed. You must carefully consider all relevant factors in making these types of decisions. For specific advice on these aspects of your overall financial plan, you should consult your professional tax and legal advisors. The report that follows is based upon: - information and assumptions that you have provided or reviewed; - current tax laws; - appropriate financial planning concepts; - historic asset class characteristics; - additional assumptions and information discussed with your advisor. The outcome of the analysis will be dependent to a significant extent upon the information and the reasonableness of the planning assumptions. It is your responsibility to provide accurate and complete information. Please contact your advisor with any changes to your information and/or planning assumptions. Inaccurate information and/or unreasonable planning assumptions can materially impact the results of this financial plan. The simulation of returns at the individual asset, account and/or portfolio level drives the investment projections and proposed financial plan. In all cases investment projections are not to be considered definitive estimates of how the individual assets you own now or in the future will perform. Therefore, it is important that you recognize that the comparisons shown may include comparisons of two asset allocation models the asset allocation of your current portfolio and the asset allocation projected in our proposed plan and not comparisons of the individual securities you own. Model comparisons and the projected rates of return are based on past performance of the relevant asset classes. Past performance is not a guarantee of future results. No future rate of return can be predicted with certainty. The report that follows does not make specific investment recommendations or analyze particular securities. Rather, the report typically contains a proposed asset allocation model based upon your stated risk tolerance, age, current asset allocation and value of your assets. The asset allocation models we use are continuously re-evaluated and are periodically changed as a result. We are under no obligation to revise any financial planning report already prepared if an allocation model is changed after it is issued to you. Actual results are influenced by events that are both within and outside of your control. The rates actually returned by asset classes will differ from our projections. The rates actually returned by any allocation model noted within the financial plan will likely differ from those returned by any individual portfolio of securities constructed to follow a specific allocation model. Any rate of return shown or used in the financial plan is not intended to predict nor guarantee the actual results of an investment product. 2

3 Disclaimer the actual results of an investment product. IMPORTANT: Investments in stocks, bonds, mutual funds, and other securities are not bank products, are not FDIC insured, and may be subject to loss of principal. We have read and understand the above information and disclosures. We understand the basis upon which the report that follows was prepared. We recognize the nature of the asset allocation comparisons and estimated returns as illustrations only. We acknowledge that the report may contain a recommendation for adjusting the asset allocation of our current investment portfolio(s), but it does not provide any guaranteed rates of return, advice on particular securities or any specific legal, tax or accounting advice. Customer Signature 3

4 Summary Taxable Inter Vivos FlipCRUT Adv/ PV of Adv/ Projected Results in 2033 Sale FlipCRUT -Disadv -Disadv Charitable deduction NA 100,020 42,609 42,609 Cap gains and Medicare taxes on sale in , , ,239 Pretax value accumulated 2,760,434 2,429, , ,219 Deferred capital gains and Medicare taxes -108,180-85,955 22,224 12,306 Net assets accumulated 2,652,254 2,343, , ,913 Amount to charity 0 684, , ,919 Combined wealth accumulation 2,652,254 3,028, ,974-23,994 On the basis of current assumptions, utilizing a FlipCRUT in this manner will not maximize the income beneficiary's wealth, but may be advantageous when combined with the amount left to charity. Wealth Accumulation Comparison in $Thousands Inter Vivos FlipCRUT Taxable Sale $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Net Assets Accumulated Amount to Charity 4

5 Wealth Transfer Summary Taxable Inter Vivos FlipCRUT Adv/ PV of Adv/ Projected Results in 2033 Sale FlipCRUT -Disadv -Disadv Pretax value accumulated 2,760,434 2,429, , ,219 Estate taxes -1,104, , ,355 73,288 Net to heirs 1,656,260 1,457, , ,931 Amount to charity 0 684, , ,919 Combined wealth transfer 1,656,260 2,142, ,105 36,987 On the basis of current assumptions, utilizing a FlipCRUT in this manner will not maximize the family's after-tax wealth, but may be advantageous when combined with the amount left to charity. Wealth Transfer Comparison in $Thousands Inter Vivos FlipCRUT Taxable Sale $0 $500 $1,000 $1,500 $2,000 $2,500 Net to Heirs Amount to Charity 5

6 Actuarial Summary Actuarial CRUT Split at the Time of Contribution 10.0% 90.0% Income Interest Remainder Interest Relevant Actuarial Calculations & Applicable Tests FlipCRUT payout rate % Income factor % Remainder factor % 10% actuarial remainder test under IRC sec. 664(d) Passed Calculation of Charitable Deduction Amount on which charitable deduction is based Fair market value Value of transfer 1,000,000 Total percentage of remainder interest deductible 100.0% Remainder factor % Charitable deduction 100,020 6

7 Assumptions Planning Illustration Transfer date 01-Jan-2014 Transferor Jack Type of analysis Inter vivos Trust Assumptions Type of trust Term Trust term 20 years FlipCRUT payout rate method Maximum FlipCRUT payout rate % FlipCRUT valuation date Start of year Months valuation date precedes payout 12 FlipCRUT payout frequency Annual Section 7520 rate 2.2% Section 7520 mortality table 2000CM Property Transferred Undiscounted fair market value 1,000,000 Valuation discount 0.0% Tax basis 100,000 Conversion of NIMCRUT to Standard CRUT Year in which transferred property is sold 6 Timing of sale Start of year Sales proceeds equal calculated value Yes Charitable Deduction Deduction is based on fair market value or tax basis Fair market value Total percentage of remainder interest deductible 100.0% Years needed to utilize deduction 1 7

8 Assumptions Tax Rates Baseline FlipCRUT Senior Generation Federal income tax rate 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 NA See schedule Estate tax rate See schedule See schedule Heirs Federal income tax rate NA NA Federal capital gains tax rate NA NA State income tax rate NA NA Estate tax rate NA NA Transferred Property Investment Rates Current income rate 0.0% Qualified dividend percentage NA Growth rate 8.0% Investment Rates FlipCRUT Non-FlipCRUT 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% % of short-term capital gains 50.0% 50.0% Present value discount rate NA 3.0% Discount rate for remainder interest 8.0% NA Medicare Surtax Baseline FlipCRUT % of taxable income and realized gains subject to Medicare surtax in trust NA 100.0% % of taxable income and realized gains subject to Medicare surtax outside of trust 100.0% 100.0% Other Post-contribution gains are allocated to income Summary results are shown net of deferred capital gains and Medicare taxes FlipCRUT payouts & deduction benefits are consumed Yes Yes No 8

9 Annual After-Tax Assets Illustration Comparison of After-Tax Ending Balances & Amounts to Charity $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 After-Tax Assets - Baseline After-Tax Assets - FlipCRUT Amount to Charity The illustration above compares the after-tax assets available to the income beneficiaries of the FlipCRUT with the assets accumulated by the family in the baseline scenario. The annual year-end values of the FlipCRUT are also shown. 9

10 Annual Net to Heirs Illustration Comparison of the After-Tax Wealth Transfer to Heirs & Amounts to Charity $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 Net to Heirs - Baseline Net to Heirs - FlipCRUT Amount to Charity The illustration above compares the after-tax wealth transferred to heirs with a FlipCRUT to the net transfer to heirs in the baseline scenario. The annual year-end values of the FlipCRUT are also shown. 10

11 Annual After-Tax Assets Comparison Taxable Sale Scenario FlipCRUT Scenario - Income Bene Accumulations FlipCRUT Summary Deferred Deferred FlipCRUT Adv/ Combined Capital Gains Combined Capital Gains -Disadv to Combined Ending & Medicare After-Tax Ending & Medicare After-Tax Income Amount Adv/ Year Balances Taxes Balances Balance Taxes Balance Beneficiary to Charity -Disadv ,080, , ,360 45, , ,319 1,080, , ,166, , ,605 48, , ,010 1,166, , ,259, , ,909 51,567 1,286 50, ,629 1,259, , ,360, ,811 1,022,678 54,694 1,587 53, ,571 1,360, , ,469, ,980 1,102,348 57,934 1,850 56,084-1,046,264 1,469, , ,255,987 17,720 1,238, ,341 2, , ,011 1,066, , ,336,788 28,437 1,308, ,625 6, , ,601 1,032, , ,419,518 37,450 1,382, ,685 11, , ,216 1,000, , ,504,892 45,207 1,459, ,967 16, , , , , ,593,521 52,054 1,541, ,890 22, , , , , ,685,941 58,258 1,627,682 1,038,856 27,669 1,011, , , , ,782,633 64,026 1,718,607 1,170,258 33,280 1,136, , , , ,884,042 69,518 1,814,524 1,306,487 39,073 1,267, , , , ,990,589 74,860 1,915,729 1,447,936 45,061 1,402, , , , ,102,680 80,152 2,022,528 1,595,005 51,258 1,543, , , , ,220,715 85,472 2,135,243 1,748,105 57,679 1,690, , , , ,345,095 90,886 2,254,210 1,907,660 64,342 1,843, , , , ,476,229 96,446 2,379,783 2,074,110 71,263 2,002, , , , ,614, ,198 2,512,333 2,247,913 78,461 2,169, , , , ,760, ,180 2,652,254 2,429,547 85,955 2,343, , , ,974 11

12 Annual Net to Heirs Comparison Part 1 of 2 Taxable Sale Scenario Combined Combined Ending Gross Estate Net Year Balances Estate Taxes to Heirs ,080,000 1,080, , , ,166,400 1,166, , , ,259,712 1,259, , , ,360,489 1,360, , , ,469,328 1,469, , , ,255,987 1,255, , , ,336,788 1,336, , , ,419,518 1,419, , , ,504,892 1,504, , , ,593,521 1,593, , , ,685,941 1,685, ,376 1,011, ,782,633 1,782, ,053 1,069, ,884,042 1,884, ,617 1,130, ,990,589 1,990, ,236 1,194, ,102,680 2,102, ,072 1,261, ,220,715 2,220, ,286 1,332, ,345,095 2,345, ,038 1,407, ,476,229 2,476, ,492 1,485, ,614,531 2,614,531 1,045,813 1,568, ,760,434 2,760,434 1,104,174 1,656,260 12

13 Annual Net to Heirs Comparison Part 2 of 2 FlipCRUT Scenario FlipCRUT Adv/-Disadv Excluding Including Ending Estate Net Amount Amount Amount Year Balance Taxes to Heirs to Charity to Charity to Charity ,555 18,222 27,333 1,080, , , ,530 19,412 29,118 1,166, , , ,567 20,627 30,940 1,259, , , ,694 21,878 32,816 1,360, , , ,934 23,174 34,760 1,469, , , , , ,205 1,066, , , , , ,175 1,032, , , , , ,811 1,000, , , , , , , , , , , , , , , ,038, , , , , , ,170, , , , , , ,306, , , , , , ,447, , , , , , ,595, , , , , , ,748, ,242 1,048, , , , ,907, ,064 1,144, , , , ,074, ,644 1,244, , , , ,247, ,165 1,348, , , , ,429, ,819 1,457, , , ,105 13

14 Wealth Accumulation with a Charitable Remainder Unitrust Inter Vivos FlipCRUT Illustration Charitable Deduction Benefit $42,609 Jack Transfers $1,000,000 Charitable Deduction $100,020 FlipCRUT Hold Property $1,000,000 FlipCRUT Sale & Conversion $1,469,328 Income Beneficiary FlipCRUT Payouts $1,882,283 Value of FlipCRUT in 2033 $684,637 Family's Accumulations $2,343,592 Charity Remainder Interest $684,637 On the basis of current assumptions, utilizing a FlipCRUT in the illustrated manner is projected to produce a net accumulation disadvantage of $308,663 in 2033, or $170,913 in today's dollars, not including the amount that ultimately passes to charity. 14

15 Wealth Transfer with a Charitable Remainder Unitrust Inter Vivos FlipCRUT Illustration Charitable Deduction Benefit $42,609 Jack Transfers $1,000,000 Charitable Deduction $100,020 FlipCRUT Hold Property $1,000,000 FlipCRUT Sale & Conversion $1,469,328 Income Beneficiary FlipCRUT Payouts $1,882,283 Value of FlipCRUT in 2033 $684,637 Family's Accumulations $2,429,547 Estate Taxes $971,819 Net to Heirs in 2033 $1,457,728 Charity Remainder Interest $684,637 On the basis of current assumptions, utilizing a FlipCRUT in the illustrated manner is projected to produce a wealth transfer disadvantage of $198,532 in 2033, or $109,931 in today's dollars, not including the amount that ultimately passes to charity. 15

16 Flip Charitable Remainder Unitrust Sensitivity Analyses AN ANALYSIS PREPARED EXCLUSIVELY FOR Transfer $1M Land to 20-Year FlipCRUT 16

17 Wealth Accumulation Sensitivity Analysis - Growth Rates 2033 FlipCRUT Ending Values Planning Adv/-Disadv Growth Cumulative Income Projected to PV to Baseline Payouts Beneficiary Charity Income Bene Income Bene 0.0% 1,441,238 1,398,180 1,245, , , , % 1,762,281 1,534,530 1,535, , , , % 2,159,953 1,694,343 1,896, , , , % 2,652,254 1,882,283 2,343, , , , % 3,261,202 2,103,934 2,897, , , , % 4,013,660 2,365,970 3,583,005 1,256, , ,462 Wealth Accumulation Planning Advantage/-Disadvantage over Baseline in Today's Dollars $0 $50,000 $100,000 $150,000 $200,000 $250, % 2.0% 4.0% 6.0% 8.0% 10.0% Pretax Growth Rates 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 FlipCRUT, 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. 17

18 Wealth Accumulation Sensitivity Analysis - Portfolio Turnover Rates 2033 FlipCRUT Ending Values Planning Adv/-Disadv Turnover Cumulative Income Projected to PV to Baseline Payouts Beneficiary Charity Income Bene Income Bene 0.0% 2,965,613 1,888,390 2,625, , , , % 2,682,067 1,883,504 2,368, , , , % 2,597,135 1,878,619 2,299, , , , % 2,560,352 1,873,733 2,272, , , , % 2,540,169 1,868,848 2,258, , , , % 2,527,463 1,863,962 2,252, , , ,508 Wealth Accumulation Planning Advantage/-Disadvantage over Baseline in Today's Dollars $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 $200, % 20.0% 40.0% 60.0% 80.0% 100.0% Portfolio Turnover Rates The illustration above shows the impact of portfolio turnover rate assumptions (inside and outside the trust) on the projected results. The graph shows the advantages or disadvantages of a FlipCRUT, 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. 18

19 Wealth Accumulation Sensitivity Analysis - FlipCRUT Payout Rates 2033 Charity Income Beneficiary Planning Adv/-Disadv Payout Charitable Remainder Cumulative Ending Projected to PV to Deduction Value Payouts Value Income Bene Income Bene 5.000% 366,802 1,845,477 1,409,129 1,983, , , % 242,003 1,233,799 1,636,592 2,187, , , % 158, ,187 1,780,149 2,270, , , % 102, ,002 1,877,854 2,339, , , % NA NA NA NA NA NA % NA NA NA NA NA NA NA = a trust that is not a valid FlipCRUT; the actuarial value of the remainder interest is less than 10%. FlipCRUT Trends $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $ % 7.000% 9.000% % FlipCRUT Payout Rates Charitable Deduction Remainder to Charity Income Beneficiary's Accumulations The illustration above shows the impact of the FlipCRUT payout rate assumption on the projected results. The graph shows the relationship between the FlipCRUT payout rate and a) the charitable deduction, b) the ending value to charity and c) the income beneficiary's accumulations. All other assumptions are the same as those listed on the Assumptions schedule. 19

20 Wealth Accumulation Sensitivity Analysis - Sale Year 2033 FlipCRUT Ending Values Planning Adv/-Disadv Sale Year Cumulative Income Projected to PV to Baseline Payouts Beneficiary Charity Income Bene Income Bene 5 2,596,412 1,839,121 2,326, , , , ,709,581 1,931,773 2,362, , , , ,828,763 2,051,991 2,402, , , , ,954,098 2,204,710 2,447, , , , ,085,681 2,395,601 2,494, , , , ,223,501 2,631,162 2,542, , , ,051 Wealth Accumulation Planning Advantage/-Disadvantage over Baseline in Today's Dollars $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400, Year of Sale of Unmarketable Property The illustration above shows the impact of the timing of sale of the unmarketable property on the projected results. The graph shows the advantages or disadvantages of a FlipCRUT, 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. 20

21 Wealth Transfer Sensitivity Analysis - Growth Rates 2033 Baseline Wealth Transfer with FlipCRUT Projected FlipCRUT Adv/-Disadv Growth Net Net Amount Combined Excluding Amount Including Amount to Heirs to Heirs to Charity Transfer to Charity to Charity 0.0% 864, , ,396 1,009, , , % 1,072, , ,724 1,297, , , % 1,332,433 1,166, ,684 1,667, , , % 1,656,260 1,457, ,637 2,142, , , % 2,059,559 1,820, ,208 2,750, , , % 2,561,095 2,272,390 1,256,127 3,528, , ,422 Wealth Transfer Planning Advantage/-Disadvantage over Baseline in Today's Dollars $150,000 $100,000 $50,000 $0 $50,000 $100,000 $150,000 $200, % 2.0% 4.0% 6.0% 8.0% 10.0% Pretax Growth Rates Excluding Charity Including Charity 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 FlipCRUT, 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. 21

22 Wealth Transfer Sensitivity Analysis - Portfolio Turnover Rates 2033 Baseline Wealth Transfer with FlipCRUT Projected FlipCRUT Adv/-Disadv Turnover Net Net Amount Excluding Amount Including Amount to Heirs to Heirs to Charity Transfer to Charity to Charity 0.0% 2,077,776 1,770, ,791 2,469, , , % 1,692,634 1,485, ,468 2,172, , , % 1,592,088 1,407, ,145 2,084, , , % 1,551,484 1,376, ,822 2,041, , , % 1,529,870 1,360, ,499 2,013, , , % 1,516,478 1,351, ,176 1,993, , ,922 Wealth Transfer Planning Advantage/-Disadvantage over Baseline in Today's Dollars $50,000 $0 $50,000 $100,000 $150,000 $200, % 20.0% 40.0% 60.0% 80.0% 100.0% Portfolio Turnover Rates Excluding Charity Including Charity The illustration above shows the impact of portfolio turnover rate assumptions (inside and outside the trust) on the projected results. The graph shows the advantages or disadvantages of a FlipCRUT, 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. 22

23 Wealth Transfer Sensitivity Analysis - FlipCRUT Payout Rates 2033 Wealth Transfer with FlipCRUT Projected FlipCRUT Adv/-Disadv PV FlipCRUT Adv/-Disadv Payout Net Amount Excluding Amount Including Amount Excluding Amount Including Amount to Heirs to Charity to Charity to Charity to Charity to Charity 5.000% 1,233,762 1,845, ,498 1,422, , , % 1,360,364 1,233, , , , , % 1,412, , , , ,103 63, % 1,455, , , , ,178 38, % NA NA NA NA NA NA % NA NA NA NA NA NA NA = a trust that is not a valid FlipCRUT; the actuarial value of the remainder interest is less than 10%. Wealth Transfer Planning Advantage/-Disadvantage over Baseline in Today's Dollars $200,000 $150,000 $100,000 $50,000 $0 $50,000 $100,000 $150,000 $200,000 $250, % 7.000% 9.000% % FlipCRUT Payout Rates Excluding Charity Including Charity The illustration above shows the impact of FlipCRUT payout rate assumptions on the projected results. The graph shows the advantages or disadvantages of a FlipCRUT, 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. 23

24 Wealth Transfer Sensitivity Analysis - Sale Year 2033 Baseline Wealth Transfer with FlipCRUT Projected FlipCRUT Adv/-Disadv Sale Year Net Net Amount Combined Excluding Amount Including Amount to Heirs to Heirs to Charity Transfer to Charity to Charity 5 1,621,512 1,447, ,270 2,107, , , ,691,882 1,469, ,148 2,179, , , ,765,691 1,493, ,921 2,258, , , ,842,708 1,520, ,308 2,345, , , ,922,361 1,547, ,167 2,439, , , ,003,377 1,572, ,536 2,539, , ,688 Wealth Transfer Planning Advantage/-Disadvantage over Baseline in Today's Dollars $50,000 $0 $50,000 $100,000 $150,000 $200,000 $250, Year of Sale of Unmarketable Property Excluding Charity Including Charity The illustration above shows the impact of the timing of sale of the unmarketable property on the projected results. The graph shows the advantages or disadvantages of a FlipCRUT, 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. 24

25 Flip Charitable Remainder Unitrust Supporting Schedules for BASELINE SCENARIO AN ANALYSIS PREPARED EXCLUSIVELY FOR Transfer $1M Land to 20-Year FlipCRUT 25

26 Taxable Sale Illustration - Unmarketable Property Beginning Valuation of Year for Estate Tax Beginning Sales Investable Growth Realized Unrealized Ending Purposes Year Balance Proceeds Balance 8.0% Gains Gains Balance 100.0% Start 1,000, , ,000, ,000,000 80, ,000 1,080,000 1,080, ,080, ,080,000 86, ,066,400 1,166,400 1,166, ,166, ,166,400 93, ,159,712 1,259,712 1,259, ,259, ,259, , ,260,489 1,360,489 1,360, ,360, ,360, , ,369,328 1,469,328 1,469, ,469,328 1,469, ,369,

27 Taxable Sale Illustration - Investment Fund Part 1 of 2 Current-Year Returns Beginning Income from Realized Realized of Year Taxable Transferred Tax-Exempt Short-Term Long-Term Beginning Sales Income Property Income Growth Capital Gains Capital Gains Unrealized Year Balance Proceeds 2.0% 0.0% 0.0% 6.0% 12.5% 12.5% Gains ,469,328 29, ,160 11,020 11,020 66, ,255, , ,359 17,685 17, , ,336, , ,207 23,290 23, , ,419, , ,171 28,114 28, , ,504, , ,294 32,372 32, , ,593, , ,611 36,230 36, , ,685, , ,156 39,817 39, , ,782, , ,958 43,233 43, , ,884, , ,043 46,555 46, , ,990, , ,435 49,846 49, , ,102, , ,161 53,154 53, , ,220, , ,243 56,521 56, , ,345, , ,706 59,979 59, , ,476, , ,574 63,556 63, , ,614, , ,872 67,276 67, ,656 27

28 Taxable Sale Illustration - Investment Fund Part 2 of 2 Taxes Income Short-Term Long-Term & Medicare Capital Gains Capital Gains Ending Year Taxes Taxes Taxes Balance ,954 4, ,239 1,255, ,299 7,534 9,845 1,336, ,786 9,921 11,506 1,419, ,215 11,976 12,996 1,504, ,604 13,790 14,368 1,593, ,965 15,434 15,663 1,685, ,307 16,962 16,913 1,782, ,640 18,417 18,144 1,884, ,970 19,832 19,374 1,990, ,301 21,234 20,621 2,102, ,638 22,644 21,898 2,220, ,983 24,078 23,215 2,345, ,341 25,551 24,583 2,476, ,712 27,075 26,009 2,614, ,100 28,660 27,500 2,760,434 28

29 Flip Charitable Remainder Unitrust Supporting Schedules for FLIP-CHARITABLE REMAINDER UNITRUST SCENARIO AN ANALYSIS PREPARED EXCLUSIVELY FOR Transfer $1M Land to 20-Year FlipCRUT 29

30 Inter Vivos FlipCRUT Illustration - Trust Accounting Part 1 of 3 Beginning of Year Balances End of Year Pre-Payout Balances Valuation Total Valuation Total for Payout FlipCRUT for Payout Distributable FlipCRUT Transferred Purposes Investment Valuation Transferred Purposes Investment Valuation Year Property 100.0% Fund for Payout Property 100.0% Fund for Payout Start 1,000,000 1,000, ,000,000 1,000, ,000,000 1,080,000 1,080, ,000, ,080,000 1,080, ,080,000 1,166,400 1,166, ,080, ,166,400 1,166, ,166,400 1,259,712 1,259, ,166, ,259,712 1,259, ,259,712 1,360,489 1,360, ,259, ,360,489 1,360, ,360,489 1,469,328 1,469, ,360, ,469,328 1,469, ,469, ,586,874 1,469, ,066,120 1,066, ,151,409 1,066, ,032,921 1,032, ,115,554 1,032, ,000,756 1,000, ,080,816 1,000, , , ,047, , , , ,014, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,642 30

31 Inter Vivos FlipCRUT Illustration - Trust Accounting Part 2 of 3 FlipCRUT Payouts & Arrearage Scheduled Combined FlipCRUT Fiduciary Beginning End End Ending Payout Accounting of Year of Year of Year FlipCRUT Year % Income Arrearage Payout Arrearage Balances Start , ,140 1,080, , , ,171 1,166, , , ,805 1,259, , , ,809 1,360, , , ,014 1,469, , , , , ,561 1,066, ,489 53, , ,032, ,799 60, , ,000, ,224 64, , , ,760 67, , , ,405 69, , , ,154 69, , , ,004 69, , , ,952 68, , , ,995 67, , , ,130 66, , , ,355 64, , , ,666 63, , , ,060 61, , , ,536 60, , ,637 31

32 Inter Vivos FlipCRUT Illustration - Trust Accounting Part 3 of 3 Character of FlipCRUT Payouts Undistributed Baskets Qualified Qualified Dividends + Planned Triggered Dividends + Ordinary Qualified Short-Term Long-Term Long-Term Tax-Exempt Ordinary Short-Term Long-Term Tax-Exempt Year Income Dividends Capital Gains Capital Gains Capital Gains Income Corpus Income Capital Gains Capital Gains Income Start ,387 29,387 11, , , ,322 21,322 16,261 80, , ,658 20,658 19,943 74, , ,015 20,015 22,463 68, , ,392 19,392 24,119 64, , ,788 18,788 25,135 60, , ,203 18,203 25,677 57, , ,636 17,636 25,871 54, , ,087 17,087 25,811 52, , ,555 16,555 25,566 49, , ,039 16,039 25,190 47, , ,540 15,540 24,720 46, , ,056 15,056 24,186 44, , ,587 14,587 23,609 42, , ,133 14,133 23,007 41, ,

33 Inter Vivos FlipCRUT Illustration - Property Transferred to FlipCRUT Beginning of Year Beginning Sales Investable Growth Realized Unrealized Ending Year Balance Proceeds Balance 8.0% Gains Gains Balance Start 1,000, , ,000, ,000,000 80, ,000 1,080, ,080, ,080,000 86, ,066,400 1,166, ,166, ,166,400 93, ,159,712 1,259, ,259, ,259, , ,260,489 1,360, ,360, ,360, , ,369,328 1,469, ,469,328 1,469, ,369,

34 Inter Vivos FlipCRUT Illustration - Investment Fund Current-Year Returns Income Beginning Realized Realized From of Year Taxable Tax-Exempt Short-Term Long-Term Transferred End Beginning Sales Income Income Growth Capital Gains Capital Gains Unrealized Property of Year Ending Year Balance Proceeds 2.0% 0.0% 6.0% 12.5% 12.5% Gains 0.0% Payout Balance ,469,328 29, ,160 11,020 11,020 66, ,755 1,066, ,066, , ,967 16,261 16,261 97, ,489 1,032, ,032, , ,975 19,943 19, , ,799 1,000, ,000, , ,045 22,463 22, , , , , , ,176 24,119 24, , , , , , ,364 25,135 25, , , , , , ,609 25,677 25, , , , , , ,908 25,871 25, , , , , , ,261 25,811 25, , , , , , ,664 25,566 25, , , , , , ,118 25,190 25, , , , , , ,619 24,720 24, , , , , , ,168 24,186 24, , , , , , ,761 23,609 23, , , , , , ,399 23,007 23, , , ,637 34

35 FlipCRUT Income Beneficiary Illustration Part 1 of 2 Current-Year Returns Realized Realized Charitable Taxable Tax-Exempt Short-Term Long-Term Beginning Deduction Income Income Growth Capital Gains Capital Gains Unrealized Year Balance Benefit 2.0% 0.0% 6.0% 12.5% 12.5% Gains , , , , , , , , , ,567 1, , , ,694 1, ,282 1,150 1,150 6, ,934 1, ,476 1,297 1,297 7, ,341 8, ,420 4,275 4,275 25, ,625 11, ,218 7,359 7,359 44, ,685 13, ,181 10,542 10,542 63, ,967 15, ,338 13,824 13,824 82, ,890 18, ,713 17,207 17, , ,038,856 20, ,331 20,697 20, , ,170,258 23, ,215 24,299 24, , ,306,487 26, ,389 28,023 28, , ,447,936 28, ,876 31,877 31, , ,595,005 31, ,700 35,870 35, , ,748,105 34, ,886 40,013 40, , ,907,660 38, ,460 44,318 44, , ,074,110 41, ,447 48,794 48, , ,247,913 44, ,875 53,455 53, ,729 35

36 FlipCRUT Income Beneficiary Illustration Part 2 of 2 Taxes on Returns Income Short-Term Long-Term After-Tax & Medicare Capital Gains Capital Gains FlipCRUT Ending Year Taxes Taxes Taxes Payouts Balance , , , , , , , ,821 3,009 83, , ,135 4,239 80, , ,310 4,491 5,505 77, , ,650 5,889 6,809 74, , ,001 7,330 8,152 71,498 1,038, ,362 8,817 9,539 69,012 1,170, ,736 10,352 10,972 66,668 1,306, ,123 11,938 12,455 64,446 1,447, ,523 13,580 13,992 62,329 1,595, ,938 15,281 15,587 60,306 1,748, ,370 17,046 17,244 58,367 1,907, ,818 18,879 18,968 56,503 2,074, ,285 20,786 20,764 54,709 2,247, ,771 22,772 22,635 52,979 2,429,547 36

37 After-Tax FlipCRUT Payout Illustration FlipCRUT Payouts Taxes on Payouts Income Short-Term Long-Term After-Tax Ordinary Qualified Short-Term Long-Term Tax-Exempt & Medicare Capital Gains Capital Gains FlipCRUT Year Income Dividends Capital Gains Capital Gains Income Corpus Taxes Taxes Taxes Payouts ,387 11, , ,789 4, , , ,322 16,261 80, ,503 6,927 23,512 83, ,658 19,943 74, ,362 8,496 21,817 80, ,015 22,463 68, ,227 9,569 20,415 77, ,392 24,119 64, ,095 10,275 19,238 74, ,788 25,135 60, ,967 10,707 18,232 71, ,203 25,677 57, ,844 10,938 17,360 69, ,636 25,871 54, ,724 11,021 16,590 66, ,087 25,811 52, ,608 10,996 15,902 64, ,555 25,566 49, ,496 10,891 15,279 62, ,039 25,190 47, ,387 10,731 14,706 60, ,540 24,720 46, ,281 10,531 14,176 58, ,056 24,186 44, ,179 10,303 13,680 56, ,587 23,609 42, ,080 10,058 13,214 54, ,133 23,007 41, ,984 9,801 12,772 52,979 37

38 FlipCRUT Basis & Gains Triggered on Payout Tentative Potential Long-Term Ending Predistribution FlipCRUT Adjusted Post-Payout Triggering Capital Gains Adjusted Year Basis Payout Basis Value Payout Triggered Basis , ,000 1,080, , , ,000 1,166, , , ,000 1,259, , , ,000 1,360, , , ,000 1,469, , ,520, ,755 1,000,000 1,066, ,000, ,053, , ,356 1,032, , , , ,100 1,000, , , , , , , , , , , , , , , , , , , , , , ,120 98, , , , ,826 94, , , , ,561 91, , , , ,985 89, , , , ,833 86, , , , ,906 83, , , , ,046 81, , , , ,132 78, , , ,596 38

39 Flip Charitable Remainder Unitrust Supporting Schedules for TAX RATES AN ANALYSIS PREPARED EXCLUSIVELY FOR Transfer $1M Land to 20-Year FlipCRUT 39

40 Tax Rates - Baseline Scenario Jack Heirs Federal Effective State Combined Federal Effective State Combined Ordinary Income Tax Ordinary Combined Ordinary Income Tax Ordinary Combined Income Tax Rate Income Tax LT Cap Gains Estate Tax Income Tax Rate Income Tax LT Cap Gains Estate Tax Year Rate 5.0% Rate Tax Rate Rate Rate 5.0% Rate Tax Rate Rate % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% 40

41 Tax Rates - FlipCRUT Scenario Jack Heirs Federal Effective State Combined Federal Effective State Combined Ordinary Income Tax Ordinary Combined Charitable Ordinary Income Tax Ordinary Combined Income Tax Rate Income Tax LT Cap Gains Deduction Estate Tax Income Tax Rate Income Tax LT Cap Gains Estate Tax Year Rate 5.0% Rate Tax Rate Tax Rate Rate Rate 5.0% Rate Tax Rate Rate % 3.0% 42.6% 23.0% 42.6% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% % 3.0% 42.6% 23.0% 40.0% 39.6% 3.0% 42.6% 23.0% 40.0% 41