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FUNDAMENTALS OF PLANNED GIVINGThus, while A has made a gift to B of the income interest, A has retained theremainder interest in the property. In planned giving, usually the donor (here,A) retains the income interest and the charitable organization involved is thedonee of the remainder interest.These interests are measured by the value of the property, the age of thedonor(s), and the period of time during which the income interests will exist.The actual computation is usually made by means of interest rates and actuarialtables promulgated by the Department of the Treasury.An income interest or a remainder interest in property may, then, be contributedto charity. It is, however, unusual for a deduction to be available for a charitablegift of an income interest in property. By contrast, the charitablecontribution of a remainder interest in an item of property will—assuming all ofthe technical requirements are met—give rise to a (frequently sizable) charitablecontribution deduction.When a gift of a remainder interest in property to a charitable organization ismade, the charity usually will not acquire title to that remainder interest untilthe income interests have expired. Nonetheless, the donor receives the charitablededuction for the tax year in which the remainder interest in the property for therecipient charity is established. When a gift of an income interest in property to acharity is made, the charity acquires that interest immediately and retains it untilsuch time (sometimes measured by a term of years) as the remainder interestcommences. Again, any resulting charitable deduction is available for the taxyear in which the income interest in the property for the charity is established.Basically, the federal tax law requires that a planned gift be made by meansof a trust if a charitable deduction is to be available. The trust used to facilitate aplanned gift is known as a split-interest trust because the trust is the mechanismfor satisfying the requirements with respect to the income and remainder interests.7 That is, the trust is the medium for splitting the property into its two componentinterests. Split-interest trusts are charitable remainder trusts, pooledincome funds, and charitable lead trusts. There are some exceptions to the generalrequirement for use of a split-interest trust in planned giving. The principalone is the charitable gift annuity, which uses a contract rather than a trust. Individualsmay give a remainder interest in their personal residence or farm tocharity and receive a charitable deduction without utilizing a trust. 8 Further, acontribution of an undivided portion of one’s entire interest in property is notregarded as a contribution of a partial interest in property. 9Still, a person contemplating a planned gift to a charitable organization usuallymakes the gift by means of a split-interest trust. When one or more of theplanned gift techniques are utilized, charitable giving can result in many financialadvantages to the donor, particularly when appreciated property (such assecurities or real estate) is used.A donor, although desirous of supporting a particular charitable organization,may be unwilling or unable to fully part with property, either because of a7 IRC § 4947(a)(2).8 IRC § 170(f)(3)(B)(i). See § 15.2.9 IRC § 170(f)(3)(B)(ii). See § 15.3. 148