What is the purpose of a charitable trust?

The purpose of the trust must fall into one of the specific purpose categories or is it not valid. Charitable trusts are favored by the law. They do not have to have definite beneficiaries because the party who enforces the trust is the attorney general . Also, charitable trusts are not subject to the rule against perpetuities.

Is a charitable trust tax exempt?

A charitable trust described in Internal Revenue Code section 4947 (a) (1) is a trust that is not tax exempt, all of the unexpired interests of which are devoted to one or more charitable purposes, and for which a charitable contribution deduction was allowed under a specific section of the Internal Revenue Code.

When is a charitable trust considered organized?

Generally, for purposes of the special and transitional rules for excise taxes discussed in this publication, a charitable trust will be considered organized on the first day it has amounts in trust for which a deduction was allowed under the Internal Revenue Code.