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CCH (cch.taxgroup.com) reports:

  The IRS provided taxpayers with guidelines on dividing a charitable remainder trust (CRT) into two or more separate and equal CRTs without violating the provisions of Code Sec. 664. The effects of such a division on other provisions of the Internal Revenue Code were also addressed.

  The guidance presented two situations in which either a charitable remainder annuity trust (CRAT) or a charitable remainder unitrust (CRUT) was divided into separate trusts. In one case the trust was divided, pro rata, into as many separate and equal trusts as necessary to provide a separate trust for each recipient living at the time of the division, while in the second case, the trust was divided pursuant to a divorce. In both cases, the pro rata division of the trust that qualified as a CRT under Code Sec. 664(d) into two or more separate trusts did not cause the trust or any of the separate trusts to fail to qualify as a CRT. Furthermore, the division was not a sale, exchange or other disposition producing gain or loss, the basis under Code Sec. 1015 of each separate trust's share of each asset was the same share of the basis of that asset in the hands of the trust immediately before the division, and each separate trust's holding period for assets transferred to it by the original trust included the holding period of the asset as held by the original trust immediately before division.

  The division of the CRT also did not terminate the trust's status as a trust described in, and subject to, the private foundation provisions of Code Sec. 4947(a)(2) and did not result in the imposition of an excise tax under Code Sec. 507(c). The division did not constitute an act of self-dealing under Code Sec. 4941 or a taxable expenditure under Code Sec. 4945.

Rev. Rul 2008-41, 2008FED ¶46,515

Rev. Rul 2008-41, FINH ¶30,588

Other References:

 
Code Sec. 507

  CCH Reference - 2008FED ¶22,780.31

 
Code Sec. 664

  CCH Reference - 2008FED ¶24,468.12

  CCH Reference - FINH ¶17,075.10

 
Code Sec. 1015

  CCH Reference - 2008FED ¶29,394.021

  CCH Reference - 2008FED ¶29,394.18

 
Code Sec. 1223

  CCH Reference - 2008FED ¶30,463.675

 
Code Sec. 4941

  CCH Reference - 2008FED ¶34,031.535

 
Code Sec. 4945

  CCH Reference - 2008FED ¶34,107.021

  Tax Research Consultant

  CCH Reference - TRC ESTGIFT: 45,204