8096 / How are unmarketable assets in a charitable remainder trust treated? Is an appraisal required?

The regulations provide that if the only trustee is the grantor, a noncharitable beneficiary, or a related or subordinate party to the grantor or the noncharitable beneficiary, a CRUT’s “unmarketable assets” (defined in Q 8093) must be valued by either an “independent trustee” or by a “qualified appraisal” from a ”qualified appraiser.”¹ An “independent” trustee” is a person who is not the grantor, the grantor’s spouse, a noncharitable beneficiary, or a party who is related or subordinate to the grantor, the grantor’s spouse, or the noncharitable beneficiary. However, a co-trustee who is an “independent” trustee may value the trust’s unmarketable assets.² For an explanation of the application of the Chapter 14 special valuation rules to CRUTs, see Q 938.

The Service has ruled that a CRUT was not disqualified even though the grantors were also the sole trustees because the trust instrument provided that the trust could only accept, invest in, and hold assets with an objectively ascertainable market value.³

1.  Treas. Reg. § 1.664-1(a)(7).