2 minute read

Another Successful Charitable Trust

We like to share planned giving success stories, and Jim and Norma’s recent experience certainly falls into that category. Jim and Norma Reilly were both raised on family ranches in the beautiful Terry (Montana) Badlands, one of the last truly undeveloped and wild places in America. Limestone outcroppings, coulees, hoodoos (tall rock spires) and buttes give way to vast prairie grasslands, home to the ranches Jim and Norma bought from their parents 50 years ago.

Much of the property comprising the Reilly Ranch had a low tax basis, and most of the improvements were fully depreciated. When a buyer came along with a good offer, Jim and Norma had some tough decisions to make.

Yellowstone Foundation worked with the Reillys’ attorney, accountant, and financial advisor to create a tax-wise plan to transfer one-third of the ranch to a Charitable Remainder Trust (CRT), with the Foundation serving as the Trustee. Together, Reillys and the CRT sold the land to the buyer, saving considerable sums on the capital gains and recapture taxes the Reillys would have otherwise triggered. They also generated a large charitable deduction to help offset the taxes they paid on the outright sale of the remaining two-thirds of the ranch.

Looking back at the transaction today, Jim says, “Yellowstone made it as simple as could be. It’s working real good and we can go do what we want with the quarterly payments we get from Yellowstone.” Norma is quick to add, “The Trust part is easy; Yellowstone gives us whatever tax forms we need, and we just give them to the accountant – and they don’t even charge us!”

Last but certainly not least, Jim and Norma like knowing that when they are gone, the funds left in the Trust will help emotionally troubled children.

It is fair to say that everyone involved in the Reilly transaction saw it as a win-win solution to a common factual scenario. If you have a ranch or other appreciated property (or even depreciated property) you are considering selling, please remember that Yellowstone Boys and Girls Ranch Foundation is always on standby to explore tax-wise charitable solutions to the built-in tax problems, and always without cost or obligation.

Reilly Mountain on the Reilly Ranch