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§ 12.3 CHARITABLE REMAINDER UNITRUST RULESMarch 1, 2005 (the date of contribution). The property had a value on that date of $5,000.Income from this property in the amount of $250 was received on December 31, 2005. Therequired payout with respect to the additional contribution for the year of contribution was$208 (5% × $5,000 × 305/365). The income earned after the date of contribution and after theregular valuation date did not enter into the computation. aaId., example (1).EXAMPLE 12.9 (CONTINUED)EXAMPLE 12.10On July 1, 2005, X makes an additional contribution of $10,000 to a CRUT. The tax year of thetrust is the calendar year and the regular valuation date is December 31 of each year. The fixedpercentage is 5 percent. Between July 1, 2005, and December 31, 2005, the additionalproperty appreciated in value to $12,500 and earned $500 of income. Because the regularvaluation date for the year of contribution occurred after the date of the additional contribution,the additional contribution (including income earned by it) is valued on the regular valuationdate. Thus, the required payout with respect to the additional contribution is $325.87 (5% ×[$12,500 + $500] × 183/365). aaReg. § 1.664-3(b), example (2). See also Rev. Rul. 74-481, 1974-2 C.B. 190.(i) Minimum Value of Remainder InterestWith respect to each contribution of property to a CRUT, the value of the remainderinterest in the property 227 must be at least 10 percent of the net fair marketvalue of the property as of the date the property is contributed to the trust. 228This 10 percent test is applicable with respect to each transfer of property to acharitable remainder trust. Consequently, a CRUT that meets the 10 percent teston the date of transfer will not subsequently fail to meet the test if interest rateshave declined between the time of creation of the trust and the death of an individualwhose life is a measuring life. Similarly, when a CRT is created for thejoint lives of two individuals, with a remainder to charity, the trust will not ceaseto qualify as a CRT because the value of the charitable remainder was less than10 percent of the trust’s assets at the first death of these two individuals. 229There are three other rules designed to provide relief for trusts that do notmeet the general 10 percent requirement. Two of them are discussed above. 230The third is this: when an additional contribution is made after June 28, 1997, toa charitable remainder unitrust created before July 29, 1997, and the unitrustwould not meet the 10 percent requirement with respect to the additional contribution,the additional contribution is to be treated as if it had been made to anew trust that does not meet the 10 percent requirement but which does notaffect the status of the original unitrust as a charitable remainder trust. 231227 See Chapter 11.228 IRC § 664(d)(2)(D). In one instance, the value of a remainder interest in a trust at inception was less than 10percent of the initial net fair market value of the trust property, with the value of the remainder interest calculatedwithout regard to a qualified contingency (see § 12.11(c)). Priv. Ltr. Rul. 200414011.229 H. Rep. No. 105-220, 105th Cong., 1st Sess. 607 (1997).230 See § 12.2(i).231 IRC § 664(d)(4). 441