Rev. Rul. 74-39

A made a gift in 1971 to a university, an organization described in section 170(c) of the Internal Revenue Code of 1954, through a trust. Pursuant to the governing instrument of the trust the university will be the trustee of the funds transferred to the trust. The trust instrument provides that each year quarterly distributions at an annual rate of 6 percent of the net fair market value of the trust assets, determined annually, are to be made to B for a term of 20 years. If B dies before the expiration of the 20-year term, the payments will be made to C for the balance of the 20-year period remaining. If C also dies before the expiration of the 20-year period, then distributions for the balance of the period remaining are to be made to C's heirs at law excluding the donor and his spouse. At the end of the 20-year term the balance remaining in the trust is to be distributed to the university. The trust is irrevocable and otherwise complies with the requirements of section 664 of the Code and the applicable Income Tax Regulations.

Held, in the instant case, the trust is a charitable remainder unitrust and the contribution for 1971 to the trust is deductible as a charitable contribution subject to the limitations of section 170(b) of the Code.