Taxable Transfer

This area is for informational purposes only. The program calculates the taxable transfer when it calculates the retained interest at the Use Retained Interest prompt. Remember that the taxable transfer plus the retained interest must equal the market value of the asset. The taxable transfer is the amount remaining after the program subtracts the retained interest from the market value.

The taxable transfer is the actual amount of the gift subject to taxation. At the termination of the trust, the trust beneficiary receives the gift but is only taxed on the taxable transfer. Since the retained interest grows each year, the longer the trust lasts, the lower the taxable transfer will be.