Does anyone have any thoughts on whether IRC 170(f)(10) would apply to prohibit gift and income tax deductions if a Grantor CLAT was (a) funded with cash a large portion of which was used to purchase life insurance, or (b) funded with life insurance policies and cash?
Transamerica thinks it will work
"The CLAT uses the majority of the cash (between 85–90%) to purchase a life insurance policy, insuring the life of the grantor or other individual. With the remaining 10–15%, the CLAT will purchase an income-producing product (such as municipal bonds) to provide the annual income to the charity."
Steven V. Gates, Senior Advanced Markets Consultant
ASPEN Group - Ash Brokerage Corporation