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§ 12.3 CHARITABLE REMAINDER UNITRUST RULESThe governing instrument of the trust may provide that any amount otherthan the unitrust amount may be paid (or may be paid in the discretion of thetrustee) to a charitable organization, provided that, in the case of a distributionin kind, the adjusted basis of the property distributed is fairly representative ofthe adjusted basis of the property available for payment on the date of payment.For example, the governing instrument of the trust may provide that a portion ofthe trust assets may be distributed currently, or upon the death of one or moreincome beneficiaries, to a charitable organization. 201(f) Period of Payment of Unitrust AmountThe period for which a unitrust amount is payable must begin with the first yearof the CRUT and continue either• for the life or lives of a named individual or individuals, or• for a term of years not to exceed 20 years. 202Only an individual or a charitable organization may receive an amount for thelife of an individual. 203 If an individual receives an amount for life, it must besolely for his or her life. Payment of a unitrust amount may terminate with theregular payment next preceding the termination of the period. (Again, theincome payment period terminates at the death of the income beneficiary(ies).)The fact that the income beneficiary may not receive this last payment may notbe taken into account for purposes of determining the present value of theremainder interest. 204In the case of an amount payable for a term of years, the length of the term ofyears must be ascertainable with certainty at the time of the creation of the trust,except that the term may be terminated by the death of the income beneficiary orby the grantor’s exercise by will of a retained power to revoke or terminate theinterest of any income beneficiary other than a charitable organization. In anyevent, the period may not extend beyond either the life or lives of a named individualor individuals or a term of years not to exceed 20 years. For example, thegoverning instrument of a CRUT may not provide for the payment of a unitrustamount to A for his life and then to B for a term of years, because it is possiblefor the period to last longer than either the lives of recipients living at creation ofthe trust or a term of years not to exceed 20 years. By contrast, the governinginstrument of the trust may provide for the payment of a unitrust amount to Afor her life and then to B for her life or a term of years (not to exceed 20 years),whichever is shorter (but not longer), if both A and B are living at the creation ofthe trust, because it is not possible for the period to last longer than the lives ofincome beneficiaries living at creation of the trust. 205201 Reg. § 1.664-3(a)(4).202 IRC § 664(d)(2)(A).203 Thus, a corporation can be an income interest beneficiary of a CRUT when the unitrust amount payment periodis a qualified term of years. Priv. Ltr. Rul. 9205031. This is so when the corporation is an S corporation. Priv.Ltr. Rul. 9340043. Similarly, a partnership can be an income interest beneficiary of a CRUT (Priv. Ltr. Rul.9419021), as can a limited liability company (Priv. Ltr. Rul. 199952071). See § 3.2.204 Reg. § 1.664-3(a)(5)(i).205 Id. 437