Strategy Comparison
CRT § 664 · GRAT § 2702 · § 6166 Installment — side-by-side assumptions and outputs
Shared assumption
Used as CRT contribution, GRAT funding, and § 6166 closely-held business value.
Eligibility checks below adapt to the selected asset.
CRT § 664 — eligibility & gates
All gates pass
- ✓Asset type is CRT-eligibleRev. Rul. 92-48; § 1361(b)(1)(B); § 691
- ✓Payout 5% within 5%–50% statutory band§ 664(d)(1)(A) / (d)(2)(A)
- ✓≥ 10% remainder PV (actual 35.8%)§ 664(d)(1)(D); § 664(d)(2)(D)
- ✓Term ≤ 20 years (current 20)§ 664(d)(1)(A) / (d)(2)(A)
Engine warnings
- Deduction capped at 30% of AGI; $584,859 carries forward 5 yrs (§ 170(d)).
GRAT § 2702 — eligibility & gates
All gates pass
- ✓Asset suitable for GRAT (volatility / upside boosts hurdle outperformance)Walton v. Comm'r, 115 T.C. 589 (2000)
- ✓Term ≥ 2 years (current 2)Reg. § 25.2702-3(d)(3)
- ✓Annual annuity step-up ≤ 20% (current 20%)Reg. § 25.2702-3(b)(1)(ii)
- ✓Growth beats § 7520 hurdle by 7.00 pts§ 7520; § 2702(b)
- ✓Term 2 yrs — mortality risk acceptable§ 2036(a)(1)
Engine warnings
- Mortality risk: if grantor dies mid-term, ~$5,821,951 pulled back into estate (§ 2036). Consider 2-yr rolling GRAT stack.
CRT § 664
Assumptions
GRAT § 2702
Assumptions
Structure: Walton zeroed-out (default)
§ 6166 Election
Assumptions
Outputs
CRT § 664
Charitable deduction (capped)$3,000,000
Income-tax savings$1,110,000
LTCG avoided at funding$1,904,000
First-year payout$535,000
Total payouts (PV)$7,620,453
Projected remainder to charity$13,872,274
Net benefit vs. outright sale-$3,812,682
✓ 10% remainder test
Outputs
GRAT § 2702
Year-1 annuity to grantor$5,378,049
Total payments (nominal)$10,756,098
Taxable gift$0
Remainder gift-tax-free$1,142,537
Estate-tax savings$457,015
Mortality risk (mid-term)$5,821,951
✓ Beats § 7520 hurdle (7.00 pts)
Outputs
§ 6166 Election
Tax deferred (biz portion)$4,000,000
Non-biz tax due at month 9$3,200,000
2% portion$700,000
45% × § 6621 portion$3,300,000
Total interest$1,216,000
Total cash out (PV)$3,230,800
NPV savings vs. lump sum$598,158
✓ 35% gate (55.6% of AGE)
Authority: IRC § 664; Reg. § 1.664-1 to -4
Authority: IRC § 2702(b); Reg. § 25.2702-3; Walton
Authority: IRC § 6166; § 6601(j)
Headline benefit ranking
#1§ 6166(NPV vs. lump sum)
$598,158#2GRAT § 2702(estate-tax savings)
$457,015#3CRT § 664(net vs. sale)
-$3,812,682Ranking compares each strategy's primary headline metric — they are not directly equivalent (income-tax savings vs. estate-tax savings vs. liquidity NPV). Use as a directional guide only.