Charitable Remainder Trust

Technical topics regarding tax preparation.
#1
Tal10  
Posts:
30
Joined:
8-Dec-2014 8:19am
Location:
Wisconsin
Can a charitable remainder trust borrow funds using its financial assets as collateral and then use these borrowed funds to purchase a mortgage note? Would this be considered Unrelated Debt Financed Income subject to UBTI, even though the income generated is passive interest? The objective of the transaction is to borrow at say 2% and hold a mortgage that pays 4%. I appreciate any thoughts on this!
 

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