CLAT Calculator — Charitable Lead Annuity Trust

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Value a charitable lead annuity trust: the charitable deduction at the lowest of three months' Section 7520 rates, the taxable gift of the remainder, the 60% test and what is left for your family.

By Konstantin Iakovlev · Updated September 2026 · Source: IRC §§170(f)(2)(B), 2522(c)(2)(B); Rev. Proc. 2007-45; IRS Section 7520 interest rates

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Trust type

Charitable deduction

$735,213

Taxable gift to your family

$264,787

Left for your family at 7% growth

$1,409,955

How the CLAT is valued

Section 7520 rates you can choose fromAugust 2026 5.2% · September 2026 5.4% · October 2026 5.6%
Rate used (the lowest gives the largest deduction)5.2% (August 2026)
First-year annuity to charity$60,000.00
Charitable deduction (present value of the annuity)$735,213.49
Taxable gift of the remainder$264,786.51
Paid to charity over 20 years$1,200,000.00
Remainder to your family$1,409,954.92

The charity's share is 73.5% of the trust, over 60%, so the trust document must bar excess business holdings and jeopardizing investments (Reg. 1.170A-6(c)(2)(i)(D)). Most zeroed-out CLATs cross this line.

Non-grantor CLAT: no income tax deduction for you; the trust deducts what it pays to charity, and the remainder gift uses your $15 million 2026 exemption. Grantor CLAT: you deduct the present value up front (up to 30% of AGI, or 20% for appreciated property, because the gift is for the use of the charity), then pay tax on the trust income every year; if grantor status ends early, part of the deduction is recaptured.

From 2026 only charitable deductions above 0.5% of AGI count ($7,500 here), and in the 37% bracket itemized deductions are worth at most 35 cents per dollar (One Big Beautiful Bill Act).

Use the CLAT Calculator — Charitable Lead Annuity Trust above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

A charitable lead annuity trust (CLAT) pays a fixed annuity to charity for a term of years and then passes what is left to your family. The charitable deduction is the present value of the annuity at the IRS Section 7520 rate, and the taxable gift to your family is the value you put in minus that deduction. When a charitable deduction is involved, you may use the rate for the month of the transfer or either of the two months before, and the lowest rate gives the largest deduction.

A CLAT can be "zeroed out" so the deduction equals the whole contribution and no gift tax is due; if the assets then earn more than the Section 7520 rate, the excess reaches your family free of gift tax. Rev. Proc. 2007-45 sets no minimum or maximum payout and allows an annuity that rises each year if the schedule is fixed at funding. When the charity's share is more than 60% of the trust, the trust document must bar excess business holdings and jeopardizing investments.

In a non-grantor CLAT you get no income tax deduction, and the trust deducts what it pays to charity. In a grantor CLAT you deduct the present value in the year you fund it, up to 30% of AGI (20% for appreciated property), and then pay tax on the trust's income every year; part of the deduction is recaptured if grantor status ends early. From 2026 only charitable deductions above 0.5% of AGI count, and itemized deductions in the 37% bracket are worth at most 35 cents per dollar.

Example: $1 Million, 20 Years, $60,000 a Year

  1. 1 Input: $1,000,000 placed in a 20-year CLAT in October 2026 that pays a charity $60,000 a year.
  2. 2 Rate: the choice is October's 5.6%, September's 5.4% or August's 5.2%; the donor elects 5.2%, the lowest.
  3. 3 Deduction: $60,000 × 12.253558 (the 20-year annuity factor at 5.2%) = $735,213; at 5.6% it would be $711,111.
  4. 4 Result: the taxable gift to the family is $264,787. If the assets grow 7% a year, $1,409,955 is left for the family after the 20 payments, with no further gift tax.

Source: IRC §§170(f)(2)(B), 2522(c)(2)(B); Rev. Proc. 2007-45; IRS Section 7520 interest rates · Last updated: September 2026

Frequently Asked Questions

How is the CLAT charitable deduction calculated?
It is the present value of the annuity paid to charity, discounted at the Section 7520 rate. You may use the rate for the month of the transfer or either of the two months before, and the lowest rate gives the largest deduction.
What is the difference between a grantor and a non-grantor CLAT?
A grantor CLAT gives you an income tax deduction for the present value in the year you fund it, but you then pay tax on the trust's income every year. A non-grantor CLAT gives you no income tax deduction; the trust deducts the payments to charity and pays its own tax.
Is there a minimum or maximum CLAT payout?
No. Rev. Proc. 2007-45 sets no minimum or maximum annuity, and the annuity may rise each year if the schedule is fixed when the trust is funded. When the charity's share is more than 60% of the trust, the trust must bar excess business holdings and jeopardizing investments.
What does my family receive from a CLAT?
Whatever is left after the last payment to charity. The taxable gift is fixed at funding as the value put in minus the charitable deduction, so growth above the Section 7520 rate passes to them without further gift tax.

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