Last updated on May 1st, 2024 at 10:32 pm
Title 26—Internal Revenue–Volume 10
CHAPTER I—INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY (CONTINUED)
SUBCHAPTER A—INCOME TAX (CONTINUED)
PART 1—INCOME TAXES (CONTINUED)
Section 1.642(c)-6 also issued under 26 U.S.C. 642(c)(5). Section 1.642(h)-2 also issued under 26 U.S.C. 642(h). Section 1.642(h)-5 also issued under 26 U.S.C. 642(h). Section 1.643(a)-8 also issued under 26 U.S.C. 643(a)(7). Section 1.643(f)-1 also issued under 26 U.S.C. 643(f). Section 1.643(h)-1 also issued under 26 U.S.C. 643(a)(7). Section 1.642(c)-6A also issued under 26 U.S.C. 642(c)(5). Section 1.645-1 also issued under 26 U.S.C. 645. Sections 1.663(c)-1, 1.663(c)-2, 1.663(c)-3, 1.663(c)-4, 1.663(c)-5, and 1.663(c)-6 also issued under 26 U.S.C. 663(c). Section 1.664-1 also issued under 26 U.S.C. 664(a). Section 1.664-2 also issued under 26 U.S.C. 664(a). Section 1.664-3 also issued under 26 U.S.C. 664(a). Section 1.664-4 also issued under 26 U.S.C. 664(a). Section 1.664-4A also issued under 26 U.S.C. 664(a). Section 1.671-2 also issued under 26 U.S.C. 643(a)(7) and 672(f)(6). Section 1.672(f)-1 also issued under 26 U.S.C. 643(a)(7) and 672(f)(6). Section 1.672(f)-2 also issued under 26 U.S.C. 643(a)(7) and 672(f)(3) and (6). Section 1.672(f)-3 also issued under 26 U.S.C. 643(a)(7) and 672(f)(2) and (6). Section 1.672(f)-4 also issued under 26 U.S.C. 643(a)(7) and 672(f)(4) and (6). Section 1.672(f)-5 also issued under 26 U.S.C. 643(a)(7) and 672(f)(6). Section 1.679-1 also issued under 26 U.S.C. 643(a)(7) and 679(d). Section 1.679-2 also issued under 26 U.S.C. 643(a)(7) and 679(d). Section 1.679-3 also issued under 26 U.S.C. 643(a)(7) and 679(d). Section 1.679-4 also issued under 26 U.S.C. 643(a)(7), 679(a)(3) and 679(d). Section 1.679-5 also issued under 26 U.S.C. 643(a)(7) and 679(d). Section 1.679-6 also issued under 26 U.S.C. 643(a)(7) and 679(d). Section 1.684-1 also issued under 26 U.S.C. 643(a)(7) and 684(a). Section 1.684-2 also issued under 26 U.S.C. 643(a)(7) and 684(a). Section 1.684-3 also issued under 26 U.S.C. 643(a)(7) and 684(a). Section 1.684-4 also issued under 26 U.S.C. 643(a)(7) and 684(a). Section 1.684-5 also issued under 26 U.S.C. 643(a)(7) and 684(a). Section 1.701-2 also issued under 26 U.S.C. 701 through 761. Section 1.704-3 also issued under 26 U.S.C. 704(c). Section 1.704-4 also issued under 26 U.S.C. 704(c). Section 1.705-2 also issued under 26 U.S.C. 705 and 1032. Section 1.706-1T also issued under 26 U.S.C. 706(b). Section 1.706-3T also issued under 26 U.S.C. 444(f). Section 1.706-4 also issued under 26 U.S.C. 706(d). Sections 1.707-2 through 1.707-9 also issued under 26 U.S.C. 707(a)(2). Section 1.721-1 also issued under 26 U.S.C. 721. Section 1.721(c)-1 also issued under 26 U.S.C. 721(c). Section 1.721(c)-2 also issued under 26 U.S.C. 721(c). Section 1.721(c)-3 also issued under 26 U.S.C. 721(c). Section 1.721(c)-4 also issued under 26 U.S.C. 721(c). Section 1.721(c)-5 also issued under 26 U.S.C. 721(c). Section 1.721(c)-6 also issued under 26 U.S.C. 721(c). Section 1.721(c)-7 also issued under 26 U.S.C. 721(c). Section 1.731-2 also issued under 26 U.S.C. 731(c). Section 1.732-1 also issued under 26 U.S.C. 732. Section 1.732-2 also issued under 26 U.S.C. 732. Section 1.732-3 also issued under 26 U.S.C. 337(d), 732(f)(8), and 1502. Section 1.734-1 also issued under 26 U.S.C. 734. Section 1.743-1 also issued under 26 U.S.C. 743. Section 1.751-1 also issued under 26 U.S.C. 751. Section 1.752-1(a) also issued under Public Law 106-554, 114 Stat. 2763, 2763A-638 (2001). Section 1.752-6 also issued under Public Law 106-554, 114 Stat. 2763, 2763A-638 (2001). Section 1.752-7 also issued under Public Law 106-554, 114 Stat. 2763, 2763A-638 (2001). Section 1.754-1 also issued under 26 U.S.C. 754. Section 1.755-1 also issued under 26 U.S.C. 755. Section 1.755-2 also issued under 26 U.S.C. 755 and 26 U.S.C. 1060. Section 1.761-2 also issued under 26 U.S.C. 446(b) and 26 U.S.C. 761(a). Section 1.807-2 also issued under 26 U.S.C. 817A(e). Section 1.807-3 also issued under 26 U.S.C. 807(e)(6). Section 1.809-10 also issued under 26 U.S.C. 809(b)(2) and (g)(3). Section 1.811-3 also issued under 26 U.S.C. 817A(e). Section 1.812-9 also issued under 26 U.S.C. 817A(e). Section 1.817-5 also issued under 26 U.S.C. 817(h). Section 1.817A-1 also issued under 26 U.S.C. 817A(e). Section 1.832-4 also issued under 26 U.S.C. 832(b)(5)(A). Section 1.846-1 also issued under 26 U.S.C. 846. Section 1.848-2 also issued under 26 U.S.C. 845(b) and 26 U.S.C. 848(d)(4)(B). Section 1.848-3 also issued under 26 U.S.C. 848(d)(4)(B).
ESTATES, TRUSTS, BENEFICIARIES, AND DECEDENTS
Estates, Trusts, and Beneficiaries
§ 1.641 [Reserved]
§ 1.641(a)-0 Scope of subchapter J.
(a) In general. Subchapter J (sections 641 and following), chapter 1 of the Code, deals with the taxation of income of estates and trusts and their beneficiaries, and of income in respect of decedents. Part I of subchapter J contains general rules for taxation of estates and trusts (subpart A), specific rules relating to trusts which distribute current income only (subpart B), estates and trusts which may accumulate income or which distribute corpus (subpart C), treatment of excess distributions by trusts (subpart D), grantors and other persons treated as substantial owners (subpart E), and miscellaneous provisions relating to limitations on charitable deductions, income of an estate or trust in case of divorce, and taxable years to which the provisions of subchapter J are applicable (subpart F). Part I has no application to any organization which is not to be classified for tax purposes as a trust under the classification rules of §§ 301.7701-2, 301.7701-3, and 301.7701-4 of this chapter (Regulations on Procedure and Administration). Part II of subchapter J relates to the treatment of income in respect of decedents. However, the provisions of subchapter J do not apply to employee trusts subject to subchapters D and F, chapter 1 of the Code, and common trust funds subject to subchapter H, chapter 1 of the Code.
(b) Scope of subparts A, B, C, and D. Subparts A, B, C, and D (section 641 and following), part I, subchapter J, chapter 1 of the Code, relate to the taxation of estates and trusts and their beneficiaries. These subparts have no application to any portion of the corpus or income of a trust which is to be regarded, within the meaning of the Code, as that of the grantor or others treated as its substantial owners. See subpart E (section 671 and following), Part I, subchapter J, chapter 1 of the Code, and the regulations thereunder for rules for the treatment of any portion of a trust where the grantor (or another person) is treated as the substantial owner. So-called alimony trusts are treated under subparts A, B, C, and D, except to the extent otherwise provided in section 71 or section 682. These subparts have no application to beneficiaries of nonexempt employees’ trusts. See section 402(b) and the regulations thereunder.
(c) Multiple trusts. Multiple trusts that have:
(1) No substantially independent purposes (such as independent dispositive purposes),
(2) The same grantor and substantially the same beneficiary, and
(3) The avoidance or mitigation of (i) the progressive rates of tax (including mitigation as a result of deferral of tax) or (ii) the minimum tax for tax preferences imposed by section 56 as their principal purpose,
§ 1.641(a)-1 Imposition of tax; application of tax.
For taxable years beginning after December 31, 1970, section 641 prescribes that the taxes imposed by section 1(d), as amended by the Tax Reform Act of 1969, shall apply to the income of estates or of any kind of property held in trust. For taxable years ending before January 1, 1971, section 641 prescribes that the taxes imposed upon individuals by chapter 1 of the Code apply to the income of estates or of any kind of property held in trust. The rates of tax, the statutory provisions respecting gross income, and, with certain exceptions, the deductions and credits allowed to individuals apply also to estates and trust.
§ 1.641(a)-2 Gross income of estates and trusts.
The gross income of an estate or trust is determined in the same manner as that of an individual. Thus, the gross income of an estate or trust consists of all items of gross income received during the taxable year, including:
(a) Income accumulated in trust for the benefit of unborn or unascertained persons or persons with contingent interests;
(b) Income accumulated or held for future distribution under the terms of the will or trust;
(c) Income which is to be distributed currently by the fiduciary to the beneficiaries, and income collected by a guardian of an infant which is to be held or distributed as the court may direct;
(d) Income received by estates of deceased persons during the period of administration or settlement of the estate; and
(e) Income which, in the discretion of the fiduciary, may be either distributed to the beneficiaries or accumulated. The several classes of income enumerated in this section do not exclude others which also may come within the general purposes of section 641.
§ 1.641(b)-1 Computation and payment of tax; deductions and credits of estates and trusts.
Generally, the deductions and credits allowed to individuals are also allowed to estates and trusts. However, there are special rules for the computation of certain deductions and for the allocation between the estate or trust and the beneficiaries of certain credits and deductions. See section 642 and the regulations thereunder. In addition, an estate or trust is allowed to deduct, in computing its taxable income, the deductions provided by sections 651 and 661 and regulations thereunder, relating to distributions to beneficiaries.
§ 1.641(b)-2 Filing of returns and payment of the tax.
(a) The fiduciary is required to make and file the return and pay the tax on the taxable income of an estate or of a trust. Liability for the payment of the tax on the taxable income of an estate attaches to the person of the executor or administrator up to and after his discharge if, prior to distribution and discharge, he had notice of his tax obligations or failed to exercise due diligence in ascertaining whether or not such obligations existed. For the extent of such liability, see section 3467 of the Revised Statutes, as amended by section 518 of the Revenue Act of 1934 (31 U. S. C. 192). Liability for the tax also follows the assets of the estate distributed to heirs, devisees, legatees, and distributees, who may be required to discharge the amount of the tax due and unpaid to the extent of the distributive shares received by them. See section 6901. The same considerations apply to trusts.
(b) The estate of an infant, incompetent, or other person under a disability, or, in general, of an individual or corporation in receivership or a corporation in bankruptcy is not a taxable entity separate from the person for whom the fiduciary is acting, in that respect differing from the estate of a deceased person or of a trust. See section 6012(b) (2) and (3) for provisions relating to the obligation of the fiduciary with respect to returns of such persons.
§ 1.641(b)-3 Termination of estates and trusts.
(a) The income of an estate of a deceased person is that which is received by the estate during the period of administration or settlement. The period of administration or settlement is the period actually required by the administrator or executor to perform the ordinary duties of administration, such as the collection of assets and the payment of debts, taxes, legacies, and bequests, whether the period required is longer or shorter than the period specified under the applicable local law for the settlement of estates. For example, where an executor who is also named as trustee under a will fails to obtain his discharge as executor, the period of administration continues only until the duties of administration are complete and he actually assumes his duties as trustee, whether or not pursuant to a court order. However, the period of administration of an estate cannot be unduly prolonged. If the administration of an estate is unreasonably prolonged, the estate is considered terminated for Federal income tax purposes after the expiration of a reasonable period for the performance by the executor of all the duties of administration. Further, an estate will be considered as terminated when all the assets have been distributed except for a reasonable amount which is set aside in good faith for the payment of unascertained or contingent liabilities and expenses (not including a claim by a beneficiary in the capacity of beneficiary). Notwithstanding the above, if the estate has joined in making a valid election under section 645 to treat a qualified revocable trust, as defined under section 645(b)(1), as part of the estate, the estate shall not terminate under this paragraph prior to the termination of the section 645 election period. See section 645 and the regulations thereunder for rules regarding the termination of the section 645 election period.
(b) Generally, the determination of whether a trust has terminated depends upon whether the property held in trust has been distributed to the persons entitled to succeed to the property upon termination of the trust rather than upon the technicality of whether or not the trustee has rendered his final accounting. A trust does not automatically terminate upon the happening of the event by which the duration of the trust is measured. A reasonable time is permitted after such event for the trustee to perform the duties necessary to complete the administration of the trust. Thus, if under the terms of the governing instrument, the trust is to terminate upon the death of the life beneficiary and the corpus is to be distributed to the remainderman, the trust continues after the death of the life beneficiary for a period reasonably necessary to a proper winding up of the affairs of the trust. However, the winding up of a trust cannot be unduly postponed and if the distribution of the trust corpus is unreasonably delayed, the trust is considered terminated for Federal income tax purposes after the expiration of a reasonable period for the trustee to complete the administration of the trust. Further, a trust will be considered as terminated when all the assets have been distributed except for a reasonable amount which is set aside in good faith for the payment of unascertained or contingent liabilities and expenses (not including a claim by a beneficiary in the capacity of beneficiary).
(c)(1) Except as provided in subparagraph (2) of this paragraph, during the period between the occurrence of an event which causes a trust to terminate and the time when the trust is considered as terminated under this section, whether or not the income and the excess of capital gains over capital losses of the trust are to be considered as amounts required to be distributed currently to the ultimate distributee for the year in which they are received depends upon the principles stated in § 1.651(a)-2. See § 1.663-1 et seq. for application of the separate share rule.
(2)(i) Except in cases to which the last sentence of this subdivision applies, for taxable years of a trust ending before September 1, 1957, subparagraph (1) of this paragraph shall not apply and the rule of subdivision (ii) of this subparagraph shall apply unless the trustee elects to have subparagraph (1) of this paragraph apply. Such election shall be made by the trustee in a statement filed on or before April 15, 1959, with the district director with whom such trust’s return for any such taxable year was filed. The election provided by this subdivision shall not be available if the treatment given the income and the excess of capital gains over capital losses for taxable years for which returns have been filed was consistent with the provisions of subparagraph (1) of this paragraph.
(ii) The rule referred to in subdivision (i) of this subparagraph is as follows: During the period between the occurrence of an event which causes a trust to terminate and the time when a trust is considered as terminated under this section, the income and the excess of capital gains over capital losses of the trust are in general considered as amounts required to be distributed for the year in which they are received. For example, a trust instrument provides for the payment of income to A during her life, and upon her death for the payment of the corpus to B. The trust reports on the basis of the calendar year. A dies on November 1, 1955, but no distribution is made to B until January 15, 1956. The income of the trust and the excess of capital gains over capital losses for the entire year 1955, to the extent not paid, credited, or required to be distributed to A or A’s estate, are treated under sections 661 and 662 as amounts required to be distributed to B for the year 1955.
(d) If a trust or the administration or settlement of an estate is considered terminated under this section for Federal income tax purposes (as for instance, because administration has been unduly prolonged), the gross income, deductions, and credits of the estate or trust are, subsequent to the termination, considered the gross income, deductions, and credits of the person or persons succeeding to the property of the estate or trust.
§ 1.641(c)-0 Table of contents.
This section lists the major captions contained in § 1.641(c)-1.
(a) In general.
(b) Definitions.
(1) Grantor portion.
(2) S portion.
(3) Non-S portion.
(c) Taxation of grantor portion.
(d) Taxation of S portion.
(1) In general.
(2) Section 1366 amounts.
(3) Gains and losses on disposition of S stock.
(4) State and local income taxes and administrative expenses.
(e) Tax rates and exemption of S portion.
(1) Income tax rate.
(2) Alternative minimum tax exemption.
(f) Adjustments to basis of stock in the S portion under section 1367.
(g) Taxation of non-S portion.
(1) In general.
(2) Dividend income under section 1368(c)(2).
(3) Interest on installment obligations.
(4) Charitable deduction.
(h) Allocation of state and local income taxes and administration expenses.
(i) Treatment of distributions from the trust.
(j) Termination or revocation of ESBT election.
(k) Effective date.
(l) Examples.
§ 1.641(c)-1 Electing small business trust.
(a) In general. An electing small business trust (ESBT) within the meaning of section 1361(e) is treated as two separate trusts for purposes of chapter 1 of the Internal Revenue Code. The portion of an ESBT that consists of stock in one or more S corporations is treated as one trust. The portion of an ESBT that consists of all the other assets in the trust is treated as a separate trust. The grantor or another person may be treated as the owner of all or a portion of either or both such trusts under subpart E, part I, subchapter J, chapter 1 of the Internal Revenue Code. The ESBT is treated as a single trust for administrative purposes, such as having one taxpayer identification number and filing one tax return. See § 1.1361-1(m).
(b) Definitions—(1) Grantor portion—(i) In general. Subject to paragraph (b)(1)(ii) of this section, the grantor portion of an ESBT is the portion of the trust that is treated as owned by the grantor or another person under subpart E of the Code.
(ii) Nonresident alien deemed owner. If, pursuant to section 672(f)(2)(A)(ii), the deemed owner of a grantor portion of the ESBT is a nonresident alien, as defined in section 7701(b)(1)(B) (NRA), the items of income, deduction, and credit from that grantor portion must be reallocated from the grantor portion to the S portion, as defined in paragraph (b)(2) of this section, of the ESBT.
(2) S portion—(i) In general. Subject to paragraph (b)(2)(ii) of this section, the S portion of an ESBT is the portion of the trust that consists of S corporation stock and that is not treated as owned by the grantor or another person under subpart E of the Code.
(ii) Nonresident alien (NRA) deemed owner of grantor portion. The S portion of an ESBT also includes the grantor portion of the items of income, deduction, and credit reallocated under paragraph (b)(1)(ii) of this section from the grantor portion of the ESBT to the S portion of the ESBT.
(3) Non-S portion. The non-S portion of an ESBT is the portion of the trust that consists of all assets other than S corporation stock and that is not treated as owned by the grantor or another person under subpart E.
(c) Taxation of grantor portion. The grantor or another person who is treated as the owner of a portion of the ESBT includes in computing taxable income items of income, deductions, and credits against tax attributable to that portion of the ESBT under section 671.
(d) Taxation of S portion—(1) In general. The taxable income of the S portion is determined by taking into account only the items of income, loss, deduction, or credit specified in paragraphs (d)(2), (3), and (4) of this section, to the extent not attributable to the grantor portion.
(2) Section 1366 amounts—(i) In general. The S portion takes into account the items of income, loss, deduction, or credit that are taken into account by an S corporation shareholder pursuant to section 1366 and the regulations thereunder. Rules otherwise applicable to trusts apply in determining the extent to which any loss, deduction, or credit may be taken into account in determining the taxable income of the S portion. See § 1.1361-1(m)(3)(iv) for allocation of those items in the taxable year of the S corporation in which the trust is an ESBT for part of the year and an eligible shareholder under section 1361(a)(2)(A)(i) through (iv) for the rest of the year.
(ii) Special rule for charitable contributions. If a deduction described in paragraph (d)(2)(i) of this section is attributable to an amount of the S corporation’s gross income that is paid by the S corporation for a charitable purpose specified in section 170(c) (without regard to section 170(c)(2)(A)), the contribution will be deemed to be paid by the S portion pursuant to the terms of the trust’s governing instrument within the meaning of section 642(c)(1). The limitations of section 681, regarding unrelated business income, apply in determining whether the contribution is deductible in computing the taxable income of the S portion.
(iii) Multiple S corporations. If an ESBT owns stock in more than one S corporation, items of income, loss, deduction, or credit from all the S corporations are aggregated for purposes of determining the S portion’s taxable income.
(3) Gains and losses on disposition of S stock—(i) In general. The S portion takes into account any gain or loss from the disposition of S corporation stock. No deduction is allowed under section 1211(b)(1) and (2) for capital losses that exceed capital gains.
(ii) Installment method. If income from the sale or disposition of stock in an S corporation is reported by the trust on the installment method, the income recognized under this method is taken into account by the S portion. See paragraph (g)(3) of this section for the treatment of interest on the installment obligation. See § 1.1361-1(m)(5)(ii) regarding treatment of a trust as an ESBT upon the sale of all S corporation stock using the installment method.
(iii) Distributions in excess of basis. Gain recognized under section 1368(b)(2) from distributions in excess of the ESBT’s basis in its S corporation stock is taken into account by the S portion.
(4) State and local income taxes and administrative expenses—(i) In general. State and local income taxes and administrative expenses directly related to the S portion and those allocated to that portion in accordance with paragraph (h) are taken into account by the S portion.
(ii) Special rule for certain interest. Interest paid by the trust on money borrowed by the trust to purchase stock in an S corporation is allocated to the S portion but is not a deductible administrative expense for purposes of determining the taxable income of the S portion.
(e) Tax rates and exemption of S portion—(1) Income tax rate. Except for capital gains, the highest marginal trust rate provided in section 1(e) is applied to the taxable income of the S portion. See section 1(h) for the rates that apply to the S portion’s net capital gain.
(2) Alternative minimum tax exemption. The exemption amount of the S portion under section 55(d) is zero.
(f) Adjustments to basis of stock in the S portion under section 1367. The basis of S corporation stock in the S portion must be adjusted in accordance with section 1367 and the regulations thereunder. If the ESBT owns stock in more than one S corporation, the adjustments to the basis in the S corporation stock of each S corporation must be determined separately with respect to each S corporation. Accordingly, items of income, loss, deduction, or credit of an S corporation that are taken into account by the ESBT under section 1366 can only result in an adjustment to the basis of the stock of that S corporation and cannot affect the basis in the stock of the other S corporations held by the ESBT.
(g) Taxation of non-S portion—(1) In general. The taxable income of the non-S portion is determined by taking into account all items of income, deduction, and credit to the extent not taken into account by either the grantor portion or the S portion. The items attributable to the non-S portion are taxed under subparts A through D of part I, subchapter J, chapter 1 of the Internal Revenue Code. The non-S portion may consist of more than one share pursuant to section 663(c).
(2) Dividend income under section 1368(c)(2). Any dividend income within the meaning of section 1368(c)(2) is includible in the gross income of the non-S portion.
(3) Interest on installment obligations. If income from the sale or disposition of stock in an S corporation is reported by the trust on the installment method, the interest on the installment obligation is includible in the gross income of the non-S portion. See paragraph (d)(3)(ii) of this section for the treatment of income from such a sale or disposition.
(4) Charitable deduction. For purposes of applying section 642(c)(1) to payments made by the trust for a charitable purpose, the amount of gross income of the trust is limited to the gross income of the non-S portion. See paragraph (d)(2)(ii) of this section for special rules concerning charitable contributions paid by the S corporation that are deemed to be paid by the S portion.
(h) Allocation of state and local income taxes and administration expenses. Whenever state and local income taxes or administration expenses relate to more than one portion of an ESBT, they must be allocated between or among the portions to which they relate. These items may be allocated in any manner that is reasonable in light of all the circumstances, including the terms of the governing instrument, applicable local law, and the practice of the trustee with respect to the trust if it is reasonable and consistent. The taxes and expenses apportioned to each portion of the ESBT are taken into account by that portion.
(i) Treatment of distributions from the trust. Distributions to beneficiaries from the S portion or the non-S portion, including distributions of the S corporation stock, are deductible under section 651 or 661 in determining the taxable income of the non-S portion, and are includible in the gross income of the beneficiaries under section 652 or 662. However, the amount of the deduction or inclusion cannot exceed the amount of the distributable net income of the non-S portion. Items of income, loss, deduction, or credit taken into account by the grantor portion or the S portion are excluded for purposes of determining the distributable net income of the non-S portion of the trust.
(j) Termination or revocation of ESBT election. If the ESBT election of the trust terminates pursuant to § 1.1361-1(m)(5) or the ESBT election is revoked pursuant to § 1.1361-1(m)(6), the rules contained in this section are thereafter not applicable to the trust. If, upon termination or revocation, the S portion has a net operating loss under section 172; a capital loss carryover under section 1212; or deductions in excess of gross income; then any such loss, carryover, or excess deductions shall be allowed as a deduction, in accordance with the regulations under section 642(h), to the trust, or to the beneficiaries succeeding to the property of the trust if the entire trust terminates.
(k) Applicability date. This section generally is applicable for taxable years of ESBTs beginning on and after May 14, 2002. However, paragraphs (a), (b), (c), and (l)(1)(Example 1) of this section are applicable for taxable years of ESBTs that end on and after December 29, 2000. ESBTs may apply paragraphs (d)(4) and (h) of this section for taxable years of ESBTs beginning after December 31, 1996. Paragraphs (b)(1) and (2) of this section, and Example 6 in paragraph (l)(6) of this section, apply to all ESBTs after December 31, 2017.
(l) Examples. The following examples illustrate the rules of this section:
(1) Example 1: Comprehensive example.
(i) Trust has a valid ESBT election in effect. Under section 678, B is treated as the owner of a portion of Trust consisting of a 10% undivided fractional interest in Trust. No other person is treated as the owner of any other portion of Trust under subpart E. Trust owns stock in X, an S corporation, and in Y, a C corporation. During 2000, Trust receives a distribution from X of $5,100, of which $5,000 is applied against Trust’s adjusted basis in the X stock in accordance with section 1368(c)(1) and $100 is a dividend under section 1368(c)(2). Trust makes no distributions to its beneficiaries during the year.
(ii) For 2000, Trust has the following items of income and deduction:
Table 1 to paragraph (l)(1)(ii)
| Ordinary income attributable to | $5,000 |
| Dividend income from | $900 |
| Dividend from | $100 |
| Total trust income | $6,000 |
| Charitable contributions attributable to | $300 |
| Trustee fees | $200 |
| State and local income taxes | $100 |
(iii) Trust’s items of income and deduction are divided into a grantor portion, an S portion, and a non-S portion for purposes of determining the taxation of those items. Income is allocated to each portion as follows:
(A) B must take into account the items of income attributable to the grantor portion, that is, 10% of each item, as follows:
Table 2 to paragraph (l)(1)(iii)(A)
| Ordinary income from | $500 |
| Dividend income from | $90 |
| Dividend income from | $10 |
| Total grantor portion income | $600 |
(B) The total income of the S portion is $4,500, determined as follows:
Table 3 to paragraph (l)(1)(iii)(B)
| Ordinary income from | $5,000 |
| Less: Grantor portion | ($500) |
| Total S portion income | $4,500 |
(C) The total income of the non-S portion is $900 determined as follows:
Table 4 to paragraph (l)(1)(iii)(C)
| Dividend income from | $810 |
| Dividend income from | $90 |
| Total non-S portion income | $900 |
(iv) The administrative expenses and the state and local income taxes relate to all three portions and under state law would be allocated ratably to the $6,000 of trust income. Thus, these items would be allocated 10% (600/6000) to the grantor portion, 75% (4500/6000) to the S portion and 15% (900/6000) to the non-S portion.
(v) B must take into account the following deductions attributable to the grantor portion of the trust:
Table 5 to paragraph (l)(1)(v)
| Charitable contributions from | $30 |
| Trustee fees | $20 |
| State and local income taxes | $10 |
(vi) The taxable income of the S portion is $4,005, determined as follows:
Table 6 to paragraph (l)(1)(vi)
| Ordinary income from | $4,500 |
| Less: Charitable contributions from | ($270) |
| 75% of trustee fees | ($150) |
| 75% of state and local income taxes | ($75) |
| Taxable income of S portion | $4,005 |
(vii) The taxable income of the non-S portion is $755, determined as follows:
Table 7 to paragraph (l)(1)(vii)
| Dividend income from | $810 |
| Dividend income from | $90 |
| Total non-S portion income | $900 |
| Less: 15% of trustee fees | ($30) |
| 15% state and local income taxes | ($15) |
| Personal exemption | ($100) |
| Taxable income of non-S portion | $755 |
(2) Example 2: Sale of S stock.
Trust has a valid ESBT election in effect and owns stock in X, an S corporation. No person is treated as the owner of any portion of Trust under subpart E. In 2003, Trust sells all of its stock in X to a person who is unrelated to Trust and its beneficiaries and realizes a capital gain of $5,000. This gain is taken into account by the S portion and is taxed using the appropriate capital gain rate found in section 1(h).
(3) Example 3—(i) Sale of S stock for an installment note. Assume the same facts as in Example 2, in paragraph (l)(2) of this section except that Trust sells its stock in X for a $400,000 installment note payable with stated interest over ten years. After the sale, Trust does not own any S corporation stock.
(ii) Loss on installment sale. Assume Trust’s basis in its X stock was $500,000. Therefore, Trust sustains a capital loss of $100,000 on the sale. Upon the sale, the S portion terminates and the excess loss, after being netted against the other items taken into account by the S portion, is made available to the entire trust as provided in section 641(c)(4).
(iii) Gain on installment sale. Assume Trust’s basis in its X stock was $300,000 and that the $100,000 gain will be recognized under the installment method of section 453. Interest income will be recognized annually as part of the installment payments. The portion of the $100,000 gain recognized annually is taken into account by the S portion. However, the annual interest income is includible in the gross income of the non-S portion.
(4) Example 4: Charitable lead annuity trust.
Trust is a charitable lead annuity trust which is not treated as owned by the grantor or another person under subpart E. Trust acquires stock in X, an S corporation, and elects to be an ESBT. During the taxable year, pursuant to its terms, Trust pays $10,000 to a charitable organization described in section 170(c)(2). The non-S portion of Trust receives an income tax deduction for the charitable contribution under section 642(c) only to the extent the amount is paid out of the gross income of the non-S portion. To the extent the amount is paid from the S portion by distributing S corporation stock, no charitable deduction is available to the S portion.
(5) Example 5: ESBT distributions.
(i) As of January 1, 2002, Trust owns stock in X, a C corporation. No portion of Trust is treated as owned by the grantor or another person under subpart E. X elects to be an S corporation effective January 1, 2003, and Trust elects to be an ESBT effective January 1, 2003. On February 1, 2003, X makes an $8,000 distribution to Trust, of which $3,000 is treated as a dividend from accumulated earnings and profits under section 1368(c)(2) and the remainder is applied against Trust’s basis in the X stock under section 1368(b). The trustee of Trust makes a distribution of $4,000 to Beneficiary during 2003. For 2003, Trust’s share of X‘s section 1366 items is $5,000 of ordinary income. For the year, Trust has no other income and no expenses or state or local taxes.
(ii) For 2003, Trust has $5,000 of taxable income in the S portion. This income is taxed to Trust at the maximum rate provided in section 1(e). Trust also has $3,000 of distributable net income (DNI) in the non-S portion. The non-S portion of Trust receives a distribution deduction under section 661(a) of $3,000, which represents the amount distributed to Beneficiary during the year ($4,000), not to exceed the amount of DNI ($3,000). Beneficiary must include this amount in gross income under section 662(a). As a result, the non-S portion has no taxable income.
(6) Example 6: NRA as potential current beneficiary. Domestic Trust (DT) has a valid ESBT election in effect. DT owns S corporation stock. The S corporation owns U.S. and foreign assets. The foreign assets produce foreign source income. B, an NRA, is the grantor and the only trust beneficiary and potential current beneficiary of DT. B is not a resident of a country with which the United States has an income tax treaty. Under section 677(a), B is treated as the owner of DT because, under the trust documents, income and corpus may be distributed only to B during B’s lifetime. Paragraph (b)(2)(ii) of this section requires that the S corporation income of the ESBT that otherwise would have been allocated to B under the grantor trust rules must be reallocated from B’s grantor portion to the S portion of DT. In the example in this paragraph (l)(6), the S portion of DT is treated as including the grantor portion of the ESBT, and thus all of DT’s income from the S corporation is taxable to DT.
§ 1.642(a)(1)-1 Partially tax-exempt interest.
An estate or trust is allowed the credit against tax for partially tax-exempt interest provided by section 35 only to the extent that the credit does not relate to interest properly allocable to a beneficiary under section 652 or 662 and the regulations thereunder. A beneficiary of an estate or trust is allowed the credit against tax for partially tax-exempt interest provided by section 35 only to the extent that the credit relates to interest properly allocable to him under section 652 or 662 and the regulations thereunder. If an estate or trust holds partially tax-exempt bonds and elects under section 171 to treat the premium on the bonds as amortizable, the credit allowable under section 35, with respect to the bond interest (whether allowable to the estate or trust or to the beneficiary), is reduced under section 171(a)(3) by reducing the shares of the interest allocable, respectively, to the estate or trust and its beneficiary by the portion of the amortization deduction attributable to the shares.
§ 1.642(a)(2)-1 Foreign taxes.
An estate or trust is allowed the credit against tax for taxes imposed by foreign countries and possessions of the United States to the extent allowed by section 901 only for so much of those taxes as are not properly allocable under that section to the beneficiaries. See section 901(b)(4). For purposes of section 901(b)(4), the term beneficiaries includes charitable beneficiaries.
§ 1.642(a)(3)-1 Dividends received by an estate or trust.
An estate or trust is allowed a credit against the tax for dividends received on or before December 31, 1964 (see section 34), only for so much of the dividends as are not properly allocable to any beneficiary under section 652 or 662. Section 642(a)(3), and this section do not apply to amounts received as dividends after December 31, 1964. For treatment of the credit in the hands of the beneficiary see § 1.652(b)-1.
§ 1.642(a)(3)-2 Time of receipt of dividends by beneficiary.
In general, dividends are deemed received by a beneficiary in the taxable year in which they are includible in his gross income under section 652 or 662. For example, a simple trust, reporting on the basis of a fiscal year ending October 30, receives quarterly dividends on November 3, 1954, and February 3, May 3, and August 3, 1955. These dividends are all allocable to beneficiary A, reporting on a calendar year basis, under section 652 and are deemed received by A in 1955. See section 652(c). Accordingly, A may take all these dividends into account in determining his credit for dividends received under section 34 and his dividends exclusion under section 116. However, solely for purposes of determining whether dividends deemed received by individuals from trusts or estates qualify under the time limitations of section 34(a) or section 116(a), section 642(a)(3) provides that the time of receipt of the dividends by the trust or estate is also considered the time of receipt by the beneficiary. For example, a simple trust reporting on the basis of a fiscal year ending October 30 receives quarterly dividends on December 3, 1953, and March 3, June 3, and September 3, 1954. These dividends are all allocable to beneficiary A, reporting on the calendar year basis, under section 652 and are includible in his income for 1954. However, for purposes of section 34(a) or section 116(a), these dividends are deemed received by A on the same dates that the trust received them. Accordingly, A may take into account in determining the credit under section 34 only those dividends received by the trust on September 3, 1954, since the dividend received credit is not allowed under section 34 for dividends received before August 1, 1954 (or after December 31, 1964). Section 642(a)(3) and this section do not apply to amounts received by an estate or trust as dividends after December 31, 1964. However, the rules in this section relating to time of receipt of dividends by a beneficiary are applicable to dividends received by an estate or trust prior to January 1, 1965, and accordingly, such dividends are deemed to be received by the beneficiary (even though received after December 31, 1964) on the same dates that the estate or trust received them for purposes of determining the credit under section 34 or the exclusion under section 116.
§ 1.642(a)(3)-3 Cross reference.
See § 1.683-2(c) for examples relating to the treatment of dividends received by an estate or trust during a fiscal year beginning in 1953 and ending in 1954.
§ 1.642(b)-1 Deduction for personal exemption.
In lieu of the deduction for personal exemptions provided by section 151:
(a) An estate is allowed a deduction of $600,
(b) A trust which, under its governing instrument, is required to distribute currently all of its income for the taxable year is allowed a deduction of $300, and
(c) All other trusts are allowed a deduction of $100.
§ 1.642(c)-0 Effective dates.
The provisions of section 642(c) (other than section 642(c)(5)) and of §§ 1.642 (c)-1 through 1.642(c)-4 apply to amounts paid, permanently set aside, or to be used for a charitable purpose in taxable years beginning after December 31, 1969. The provisions of section 642(c)(5) and of §§ 1.642(c)-5 through 1.642(c)-7 apply to transfers in trust made after July 31, 1969. For provisions relating to amounts paid, permanently set aside, or to be used for a charitable purpose in taxable years beginning before January 1, 1970, see 26 CFR 1.642(c)-1 through 1.642(c)-4 (Rev. as of Jan. 1, 1971).
§ 1.642(c)-1 Unlimited deduction for amounts paid for a charitable purpose.
(a) In general. (1) Any part of the gross income of an estate, or trust which, pursuant to the terms of the governing instrument is paid (or treated under paragraph (b) of this section as paid) during the taxable year for a purpose specified in section 170(c) shall be allowed as a deduction to such estate or trust in lieu of the limited charitable contributions deduction authorized by section 170(a). In applying this paragraph without reference to paragraph (b) of this section, a deduction shall be allowed for an amount paid during the taxable year in respect of gross income received in a previous taxable year, but only if no deduction was allowed for any previous taxable year to the estate or trust, or in the case of a section 645 election, to a related estate, as defined under § 1.645-1(b), for the amount so paid.
(2) In determining whether an amount is paid for a purpose specified in section 170(c)(2) the provisions of section 170(c)(2)(A) shall not be taken into account. Thus, an amount paid to a corporation, trust, or community chest, fund, or foundation otherwise described in section 170(c)(2) shall be considered paid for a purpose specified in section 170(c) even though the corporation, trust, or community chest, fund, or foundation is not created or organized in the United States, any State, the District of Columbia, or any possession of the United States.
(3) See section 642(c)(6) and § 1.642(c)-4 for disallowance of a deduction under this section to a trust which is, or is treated under section 4947(a)(1) as though it were a private foundation (as defined in section 509(a) and the regulations thereunder) and not exempt from taxation under section 501(a).
(b) Election to treat contributions as paid in preceding taxable year—(1) In general. For purposes of determining the deduction allowed under paragraph (a) of this section, the fiduciary (as defined in section 7701(a)(6)) of an estate or trust may elect under section 642(c)(1) to treat as paid during the taxable year (whether or not such year begins before January 1, 1970) any amount of gross income received during such taxable year or any preceding taxable year which is otherwise deductible under such paragraph and which is paid after the close of such taxable year but on or before the last day of the next succeeding taxable year of the estate or trust. The preceding sentence applies only in the case of payments actually made in a taxable year which is a taxable year beginning after December 31, 1969. No election shall be made, however, in respect of any amount which was deducted for any previous taxable year or which is deducted for the taxable year in which such amount is paid.
(2) Time for making election. The election under subparagraph (1) of this paragraph shall be made not later than the time, including extensions thereof, prescribed by law for filing the income tax return for the succeeding taxable year. Such election shall, except as provided in subparagraph (4) of this paragraph, become irrevocable after the last day prescribed for making it. Having made the election for any taxable year, the fiduciary may, within the time prescribed for making it, revoke the election without the consent of the Commissioner.
(3) Manner of making the election. The election shall be made by filing with the income tax return (or an amended return) for the taxable year in which the contribution is treated as paid a statement which:
(i) States the name and address of the fiduciary,
(ii) Identifies the estate or trust for which the fiduciary is acting,
(iii) Indicates that the fiduciary is making an election under section 642(c)(1) in respect of contributions treated as paid during such taxable year,
(iv) Gives the name and address of each organization to which any such contribution is paid, and
(v) States the amount of each contribution and date of actual payment or, if applicable, the total amount of contributions paid to each organization during the succeeding taxable year, to be treated as paid in the preceding taxable year.
(4) Revocation of certain elections with consent. An application to revoke with the consent of the Commissioner any election made on or before June 8, 1970, must be in writing and must be filed not later than September 2, 1975.
(i) The name and address of the fiduciary and the estate or trust for which he was acting,
(ii) The taxable year for which the election was made,
(iii) The office of the district director, or the service center, where the return (or amended return) for the year of election was filed, and
(iv) The reason for revoking the election.
§ 1.642(c)-2 Unlimited deduction for amounts permanently set aside for a charitable purpose.
(a) Estates. Any part of the gross income of an estate which pursuant to the terms of the will:
(1) Is permanently set aside during the taxable year for a purpose specified in section 170(c), or
(2) Is to be used (within or without the United States or any of its possessions) exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, or for the establishment, acquisition, maintenance, or operation of a public cemetery not operated for profit,
(b) Certain trusts—(1) In general. Any part of the gross income of a trust to which either subparagraph (3) or (4) of this paragraph applies, that by the terms of the governing instrument:
(i) Is permanently set aside during the taxable year for a purpose specified in section 170(c), or
(ii) Is to be used (within or without the United States or any of its possessions) exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, or for the establishment, acquisition, maintenance, or operation of a public cemetery not operated for profit,
(2) Limitation of deduction. Subparagraph (1) of this paragraph applies only to the gross income earned by a trust with respect to amounts transferred to the trust under a will executed on or before October 9, 1969, and satisfying the requirements of subparagraph (4) of this paragraph or transferred to the trust on or before October 9, 1969. For such purposes, any income, gains, or losses, which are derived at any time from the amounts so transferred to the trust shall also be taken into account in applying subparagraph (1) of this paragraph. If any such amount so transferred to the trust is invested or reinvested at any time, any asset received by the trust upon such investment or reinvestment shall also be treated as an amount which was so transferred to the trust. In the case of a trust to which this paragraph applies which contains (i) amounts transferred pursuant to transfers described in the first sentence of this subparagraph and (ii) amounts transferred pursuant to transfers not so described, subparagraph (1) of this paragraph shall apply only if the amounts described in subdivision (i) of this subparagraph, together with all income, gains, and losses derived therefrom, are separately accounted for from the amounts described in subdivision (ii) of this subparagraph, together with all income, gains, and losses derived therefrom. Such separate accounting shall be carried out consistently with the principles of paragraph (c)(4) of § 53.4947-1 of this chapter (Foundation Excise Tax Regulations), relating to accounting for segregated amounts of split-interest trusts.
(3) Trusts created on or before October 9, 1969. A trust to which this subparagraph applies is a trust, testamentary or otherwise, which was created on or before October 9, 1969, and which qualifies under either subdivision (i) or (ii) of this subparagraph.
(i) Transfer of irrevocable remainder interest to charity. To qualify under this subdivision the trust must have been created under the terms of an instrument granting an irrevocable remainder interest in such trust to or for the use of an organization described in section 170(c). If the instrument granted a revocable remainder interest but the power to revoke such interest terminated on or before October 9, 1969, without the remainder interest having been revoked, the remainder interest will be treated as irrevocable for purposes of the preceding sentence.
(ii) Grantor under a mental disability to change terms of trust. (A) To qualify under this subdivision (ii) the trust must have been created by a grantor who was at all times after October 9, 1969, under a mental disability to change the terms of the trust. The term mental disability for this purpose means mental incompetence to change the terms of the trust, whether or not there has been an adjudication of mental incompetence and whether or not there has been an appointment of a committee, guardian, fiduciary, or other person charged with the care of the person or property of the grantor.
(B) If the grantor has not been adjudged mentally incompetent, the trustee must obtain from a qualified physician a certificate stating that the grantor of the trust has been mentally incompetent at all times after October 9, 1969, and that there is no reasonable probability that the grantor’s mental capacity will ever improve to the extent that he will be mentally competent to change the terms of the trust. A copy of this certification must be filed with the first return on which a deduction is claimed by reason of this subdivision (ii) and subparagraph (1) of this paragraph. Thereafter, a statement referring to such medical opinion must be attached to any return for a taxable year for which such a deduction is claimed and during which the grantor’s mental incompetence continues. The original certificate must be retained by the trustee of the trust.
(C) If the grantor has been adjudged mentally incompetent, a copy of the judgment or decree, and any modification thereof, must be filed with the first return on which a deduction is claimed by reason of this subdivision (ii) and subparagraph (1) of this paragraph. Thereafter, a statement referring to such judgment or decree must be attached to any return for a taxable year for which such a deduction is claimed and during which the grantor’s mental incompetence continues. A copy of such judgment or decree must also be retained by the trustee of the trust.
(D) This subdivision (ii) applies even though a person charged with the care of the person or property of the grantor has the power to change the terms of the trust.
(4) Testamentary trust established by will executed on or before October 9, 1969. A trust to which this subparagraph applies is a trust which was established by will executed on or before October 9, 1969, and which qualifies under either subdivision (i), (ii), or (iii) of this subparagraph. This subparagraph does not apply, however, to that portion of any trust, not established by a will executed on or before October 9, 1969, which was transferred to such trust by a will executed on or before October 9, 1969. Nor does it apply to that portion of any trust, not established by a will executed on or before October 9, 1969, which was subject to a testamentary power of appointment that fails by reason of the testator’s nonexercise of the power in a will executed on or before October 9, 1969.
(i) Testator dying within 3 years without republishing his will. To qualify under this subdivision the trust must have been established by the will of a testator who died after October 9, 1969, but before October 9, 1972, without having amended any dispositive provision of the will after October 9, 1969, by codicil or otherwise.
(ii) Testator having no right to change his will. To qualify under this subdivision the trust must have been established by the will of a testator who died after October 9, 1969, and who at no time after that date had the right to change any portion of such will pertaining to such trust. This subdivision could apply, for example, where a contract has been entered into for the execution of wills containing reciprocal provisions as well as provisions for the benefit of an organization described in section 170(c) and under applicable local law the surviving testator is prohibited from revoking his will because he has accepted the benefit of the provisions of the will of the other contracting party.
(iii) Testator under a mental disability to republish his will. To qualify under this subdivision the trust must have been established by the will of a testator who died after October 8, 1972, without having amended any dispositive provision of such will after October 9, 1969, and before October 9, 1972, by codicil or otherwise, and who is under a mental disability at all times after October 8, 1972, to amend such will, by codicil or otherwise. The provisions of subparagraph (3)(ii) of this paragraph with respect to mental incompetence apply for purposes of this subdivision.
(iv) Amendment of dispositive provisions. The provisions of paragraph (e) (4) and (5) of § 20.2055-2 of this chapter (Estate Tax Regulations) are to be applied under subdivisions (i) and (iii) of this subparagraph in determining whether there has been an amendment of a dispositive provision of a will.
(c) Pooled income funds. Any part of the gross income of a pooled income fund to which § 1.642(c)-5 applies for the taxable year that is attributable to net long-term capital gain (as defined in section 1222(7)) which, pursuant to the terms of the governing instrument, is permanently set aside during the taxable year for a purpose specified in section 170(c) shall be allowed as a deduction to the fund in lieu of the limited charitable contributions deduction authorized by section 170(a). No amount of net long-term capital gain shall be considered permanently set aside for charitable purposes if, under the terms of the fund’s governing instrument and applicable local law, the trustee has the power, whether or not exercised, to satisfy the income beneficiaries’ right to income by the payment of either: an amount equal to a fixed percentage of the fair market value of the fund’s assets (whether determined annually or averaged on a multiple year basis); or any amount that takes into account unrealized appreciation in the value of the fund’s assets. In addition, no amount of net long-term capital gain shall be considered permanently set aside for charitable purposes to the extent the trustee distributes proceeds from the sale or exchange of the fund’s assets as income within the meaning of § 1.642(c)-5(a)(5)(i). No deduction shall be allowed under this paragraph for any portion of the gross income of such fund which is (1) attributable to income other than net long-term capital gain (2) earned with respect to amounts transferred to such fund before August 1, 1969. However, see paragraph (b) of this section for a deduction (subject to the limitations of such paragraph) for amounts permanently set aside by a pooled income fund which meets the requirements of that paragraph. The principles of paragraph (b) or (2) of this section with respect to investment, reinvestment, and separate accounting shall apply under this paragraph in the case of amounts transferred to the fund after July 31, 1969.
(d) Disallowance of deduction for certain amounts not deemed to be permanently set aside for charitable purposes. No amount will be considered to be permanently set aside, or to be used, for a purpose described in paragraph (a) or (b)(1) of this section unless under the terms of the governing instrument and the circumstances of the particular case the possibility that the amount set aside, or to be used, will not be devoted to such purpose or use is so remote as to be negligible. Thus, for example, where there is possibility of the invasion of the corpus of a charitable remainder trust, as defined in § 1.664-1(a)(1)(ii), in order to make payment of the annuity amount or unitrust amount, no deduction will be allowed under paragraph (a) of this section in respect of any amount set aside by an estate for distribution to such a charitable remainder trust.
(e) Effective dates. Generally, the second sentence of paragraph (c) of this section, concerning the loss of any charitable deduction for long-term capital gains if the fund’s income may be determined by a fixed percentage of the fair market value of the fund’s assets or by any amount that takes into account unrealized appreciation in the value of the fund’s assets, applies for taxable years beginning after January 2, 2004. In a state whose statute permits income to be determined by reference to a fixed percentage of, or the unrealized appreciation in, the value of the fund’s assets, net long-term capital gain of a pooled income fund may be considered to be permanently set aside for charitable purposes if the fund’s governing instrument is amended or reformed to eliminate the possibility of determining income in such a manner and if income has not been determined in this manner. For this purpose, a judicial proceeding to reform the fund’s governing instrument must be commenced, or a nonjudicial reformation that is valid under state law must be completed, by the date that is nine months after the later of January 2, 2004 or the effective date of the state statute authorizing determination of income in such a manner.
§ 1.642(c)-3 Adjustments and other special rules for determining unlimited charitable contributions deduction.
(a) Income in respect of a decedent. For purposes of §§ 1.642(c)-1 and 1.642(c)-2, an amount received by an estate or trust which is includible in its gross income under section 691(a)(1) as income in respect of a decedent shall be included in the gross income of the estate or trust.
(b) Determination of amounts deductible under section 642(c) and the character of such amounts—(1) Reduction of charitable contributions deduction by amounts not included in gross income. If an estate, pooled income fund, or other trust pays, permanently sets aside, or uses any amount of its income for a purpose specified in section 642(c) (1), (2) or (3) and that amount includes any items of estate or trust income not entering into the gross income of the estate or trust, the deduction allowable under § 1.642(c)-1 or § 1.642(c)-2 is limited to the gross income so paid, permanently set aside, or used. In the case of a pooled income fund for which a deduction is allowable under paragraph (c) of § 1.642(c)-2 for amounts permanently set aside, only the gross income of the fund which is attributable to net long-term capital gain (as defined in section 1222(7)) shall be taken into account.
(2) Determination of the character of an amount deductible under section 642(c). In determining whether the amounts of income so paid, permanently set aside, or used for a purpose specified in section 642(c)(1), (2), or (3) include particular items of income of an estate or trust, whether or not included in gross income, a provision in the governing instrument or in local law that specifically provides the source out of which amounts are to be paid, permanently set aside, or used for such a purpose controls for Federal tax purposes to the extent such provision has economic effect independent of income tax consequences. See § 1.652(b)-2(b). In the absence of such specific provisions in the governing instrument or in local law, the amount to which section 642(c) applies is deemed to consist of the same proportion of each class of the items of income of the estate or trust as the total of each class bears to the total of all classes. See § 1.643(a)-5(b) for the method of determining the allocable portion of exempt income and foreign income. This paragraph (b)(2) is illustrated by the following examples:
(3) Other examples. For examples showing the determination of the character of an amount deductible under § 1.642(c)-1 or § 1.642(c)-2, see examples 1 and 2 in § 1.662(b)-2 and paragraph (e) of the example in § 1.662(c)-4.
(c) Capital gains included in charitable contribution. Where any amount of the income paid, permanently set aside, or used for a purpose specified in section 642(c) (1), (2), or (3), is attributable to net long-term capital gain (as defined in section 1222(7)), the amount of the deduction otherwise allowable under § 1.642(c)-1 or § 1.642(c)-2, must be adjusted for any deduction provided in section 1202 of 50 percent of the excess, if any, of the net long-term capital gain over the net short-term capital loss. For determination of the extent to which the contribution to which § 1.642(c)-1 or § 1.642(c)-2 applies is deemed to consist of net long-term capital gains, see paragraph (b) of this section. The application of this paragraph may be illustrated by the following examples:
(d) Disallowance of deduction for amounts allocable to unrelated business income. In the case of a trust, the deduction otherwise allowable under § 1.642(c)-1 or § 1.642(c)-2 is disallowed to the extent of amounts allocable to the trust’s unrelated business income. See section 681(a) and the regulations thereunder.
(e) Disallowance of deduction in certain cases. For disallowance of certain deductions otherwise allowable under section 642(c) (1), (2), or (3), see sections 508(d) and 4948(c)(4).
(f) Information returns. For rules applicable to the annual information return that must be filed by trusts claiming a deduction under section 642(c) for the taxable year, see section 6034 and the regulations thereunder.
(g) Payments resulting in state or local tax benefits—(1) In general. If the trust or decedent’s estate makes a payment of gross income for a purpose specified in section 170(c), and the trust or decedent’s estate receives or expects to receive a state or local tax benefit in consideration for such payment, § 1.170A-1(h)(3) applies in determining the charitable contribution deduction under section 642(c).
(2) Effective/applicability date. Paragraph (g)(1) of this section applies to payments of gross income after August 27, 2018.
§ 1.642(c)-4 Nonexempt private foundations.
In the case of a trust which is, or is treated under section 4947(a)(1) as though it were, a private foundation (as defined in section 509(a) and the regulations thereunder) that is not exempt from taxation under section 501(a) for the taxable year, a deduction for amounts paid or permanently set aside, or used for a purpose specified in section 642(c) (1), or (2) shall not be allowed under § 1.642(c)-1 or § 1.642(c)-2, but such trust shall, subject to the provisions applicable to individuals, be allowed a deduction under section 170 for charitable contributions paid during the taxable year. Section 642(c)(6) and this section do not apply to a trust described in section 4947(a)(1) unless such trust fails to meet the requirements of section 508(e). However, if on October 9, 1969, or at any time thereafter, a trust is recognized as being exempt from taxation under section 501(a) as an organization described in section 501(c)(3), if at such time such trust is a private foundation, and if at any time thereafter such trust is determined not to be exempt from taxation under section 501(a) as an organization described in section 501(c)(3), section 642(c)(6) and this section will apply to such trust. See § 1.509 (b)-1 (b).
§ 1.642(c)-5 Definition of pooled income fund.
(a) In general—(1) Application of provisions. Section 642(c)(5) prescribes certain rules for the valuation of contributions involving transfers to certain funds described in that section as pooled income funds. This section sets forth the requirements for qualifying as a pooled income fund and provides for the manner of allocating the income of the fund to the beneficiaries. Section 1.642(c)-6 provides for the valuation of a remainder interest in property transferred to a pooled income fund. Section 1.642(c)-7 provides transitional rules under which certain funds may be amended so as to qualify as pooled income funds in respect to transfers of property occurring after July 31, 1969.
(2) Tax status of fund and its beneficiaries. Notwithstanding any other provision of this chapter, a fund which meets the requirements of a pooled income fund, as defined in section 642(c)(5) and paragraph (b) of this section, shall not be treated as an association within the meaning of section 7701(a)(3). Such a fund, which need not be a trust under local law, and its beneficiaries shall be taxable under part I, subchapter J, chapter 1 of the Code, but the provisions of subpart E (relating to grantors and others treated as substantial owners) of such part shall not apply to such fund.
(3) Recognition of gain or loss on transfer to fund. No gain or loss shall be recognized to the donor on the transfer of property to a pooled income fund. In such case, the fund’s basis and holding period with respect to property transferred to the fund by a donor shall be determined as provided in sections 1015(b) and 1223(2). If, however, a donor transfers property to a pooled income fund and, in addition to creating or retaining a life income interest therein, receives property from the fund, or transfers property to the fund which is subject to an indebtedness, this subparagraph shall not apply to the gain realized by reason of (i) the receipt of such property or (ii) the amount of such indebtedness, whether or not assumed by the pooled income fund, which is required to be treated as an amount realized on the transfer. For applicability of the bargain sale rules, see section 1011(b) and the regulations thereunder.
(4) Charitable contributions deduction. A charitable contributions deduction for the value of the remainder interest, as determined under § 1.642(c)-6, may be allowed under section 170, 2055, 2106, or 2522, where there is a transfer of property to a pooled income fund. For a special rule relating to the reduction of the amount of a charitable contribution of certain ordinary income property or capital gain property, see section 170(e)(1) (A) or (B)(i) and the regulations thereunder.
(5) Definitions. For purposes of this section, §§ 1.642(c)-6 and 1.642(c)-7:
(i) The term income has the same meaning as it does under section 643(b) and the regulations thereunder, except that income generally may not include any long-term capital gains. However, in conformance with the applicable state statute, income may be defined as or satisfied by a unitrust amount, or pursuant to a trustee’s power to adjust between income and principal to fulfill the trustee’s duty of impartiality, if the state statute both provides for a reasonable apportionment between the income and remainder beneficiaries of the total return of the trust and meets the requirements of § 1.643(b)-1. In exercising a power to adjust, the trustee must allocate to principal, not to income, the proceeds from the sale or exchange of any assets contributed to the fund by any donor or purchased by the fund at least to the extent of the fair market value of those assets on the date of their contribution to the fund or of the purchase price of those assets purchased by the fund. This definition of income applies for taxable years beginning after January 2, 2004.
(ii) The term donor includes a decedent who makes a testamentary transfer of property to a pooled income fund.
(iii) The term governing instrument means either the governing plan under which the pooled income fund is established and administered or the instrument of transfer, as the context requires.
(iv) The term public charity means an organization described in clause (i) to (vi) of section 170(b)(1)(A). If an organization is described in clause (i) to (vi) of section 170(b)(1)(A) and is also described in clause (viii) of such section, it shall be treated as a public charity.
(v) The term fair market value, when used with respect to property, means its value in excess of the indebtedness or charges against such property.
(vi) The term determination date means each day within the taxable year of a pooled income fund on which a valuation is made of the property in the fund. The property in the fund shall be valued on the first day of the taxable year of the fund and on at least 3 other days within the taxable year. The period between any two consecutive determination dates within the taxable year shall not be greater than 3 calendar months. In the case of a taxable year of less than 12 months, the property in the fund shall be valued on the first day of such taxable year and on such other days within such year as occur at successive intervals of no greater than 3 calendar months. Where a valuation date falls on a Saturday, Sunday, or legal holiday (as defined in section 7503 and the regulations thereunder), the valuation may be made on either the next preceding day which is not a Saturday, Sunday, or legal holiday or the next succeeding day which is not a Saturday, Sunday, or legal holiday, so long as the next such preceding day or next such succeeding day is consistently used where the valuation date falls on a Saturday, Sunday, or legal holiday.
(6) Cross references. (i) See section 4947(a)(2) and section 4947(b)(3)(B) for the application to pooled income funds of the provisions relating to private foundations and section 508(e) for rules relating to provisions required in the governing instrument prohibiting certain activities specified in section 4947(a)(2).
(ii) For rules for postponing the time for deduction of a charitable contribution of a future interest in tangible personal property, see section 170(a)(3) and the regulations thereunder.
(b) Requirements for qualification as a pooled income fund. A pooled income fund to which this section applies must satisfy all of the following requirements:
(1) Contribution of remainder interest to charity. Each donor must transfer property to the fund and contribute an irrevocable remainder interest in such property to or for the use of a public charity, retaining for himself, or creating for another beneficiary or beneficiaries, a life income interest in the transferred property. A contingent remainder interest shall not be treated as an irrevocable remainder interest for purposes of this subparagraph.
(2) Creation of life income interest. Each donor must retain for himself for life an income interest in the property transferred to such fund, or create an income interest in such property for the life of one or more beneficiaries, each of whom must be living at the time of the transfer of the property to the fund by the donor. The term one or more beneficiaries includes those members of a named class who are alive and can be ascertained at the time of the transfer of the property to the fund. In the event more than one beneficiary of the income interest is designated, such beneficiaries may enjoy their shares of income concurrently, consecutively, or both concurrently and consecutively. The donor may retain the power exercisable only by will to revoke or terminate the income interest of any designated beneficiary other than the public charity. The governing instrument must specify at the time of the transfer the particular beneficiary or beneficiaries to whom the income is payable and the share of income distributable to each person so specified. The public charity to or for the use of which the remainder interest is contributed may also be designated as one of the beneficiaries of an income interest. The donor need not retain or create a life interest in all the income from the property transferred to the fund provided any income not payable under the terms of the governing instrument to an income beneficiary is contributed to, and within the taxable year in which it is received is paid to, the same public charity to or for the use of which the remainder interest is contributed. No charitable contributions deduction shall be allowed to the donor for the value of such income interest of the public charity or for the amount of any such income paid to such organization.
(3) Commingling of property required. The property transferred to the fund by each donor must be commingled with, and invested or reinvested with, other property transferred to the fund by other donors satisfying the requirements of subparagraphs (1) and (2) of this paragraph. The governing instrument of the pooled income fund must contain a provision requiring compliance with the preceding sentence. The public charity to or for the use of which the remainder interest is contributed may maintain more than one pooled income fund, provided that each such fund is maintained by the organization and is not a device to permit a group of donors to create a fund which may be subject to their manipulation. The fund must not include property transferred under arrangements other than those specified in section 642(c)(5) and this paragraph. However, a fund shall not be disqualified as a pooled income fund under this paragraph because any portion of its properties is invested or reinvested jointly with other properties, not a part of the pooled income fund, which are held by, or for the use of, the public charity which maintains the fund, as for example, with securities in the general endowment fund of the public charity to or for the use of which the remainder interest is contributed. Where such joint investment or reinvestment of properties occurs, records must be maintained which sufficiently identify the portion of the total fund which is owned by the pooled income fund and the income earned by, and attributable to, such portion. Such a joint investment or reinvestment of properties shall not be treated as an association or partnership for purposes of the Code. A bank which serves as trustee of more than one pooled income fund may maintain a common trust fund to which section 584 applies for the collective investment and reinvestment of moneys of such funds.
(4) Prohibition against exempt securities. The property transferred to the fund by any donor must not include any securities, the income from which is exempt from tax under subtitle A of the Code, and the fund must not invest in such securities. The governing instrument of the fund must contain specific prohibitions against accepting or investing in such securities.
(5) Maintenance by charitable organization required. The fund must be maintained by the same public charity to or for the use of which the irrevocable remainder interest is contributed. The requirement of maintenance will be satisfied where the public charity exercises control directly or indirectly over the fund. For example, this requirement of control shall ordinarily be met when the public charity has the power to remove the trustee or trustees of the fund and designate a new trustee or trustees. A national organization which carries out its purposes through local organizations, chapters, or auxiliary bodies with which it has an identity of aims and purposes may maintain a pooled income fund (otherwise satisfying the requirements of this paragraph) in which one or more local organizations, chapters, or auxiliary bodies which are public charities have been named as recipients of the remainder interests. For example, a national church body may maintain a pooled income fund where donors have transferred property to such fund and contributed an irrevocable remainder interest therein to or for the use of various local churches or educational institutions of such body. The fact that such local organizations or chapters have been separately incorporated from the national organization is immaterial.
(6) Prohibition against donor or beneficiary serving as trustee. The fund must not have, and the governing instrument must prohibit the fund from having, as a trustee a donor to the fund or a beneficiary (other than the public charity to or for the use of which the remainder interest is contributed) of an income interest in any property transferred to such fund. Thus, if a donor or beneficiary (other than such public charity) directly or indirectly has general responsibilities with respect to the fund which are ordinarily exercised by a trustee, such fund does not meet the requirements of section 642(c)(5) and this paragraph. The fact that a donor of property to the fund, or a beneficiary of the fund, is a trustee, officer, director, or other official of the public charity to or for the use of which the remainder interest is contributed ordinarily will not prevent the fund from meeting the requirements of section 642(c)(5) and this paragraph.
(7) Income of beneficiary to be based on rate of return of fund. Each beneficiary entitled to income of any taxable year of the fund must receive such income in an amount determined by the rate of return earned by the fund for such taxable year with respect to his income interest, computed as provided in paragraph (c) of this section. The governing instrument of the fund shall direct the trustee to distribute income currently or within the first 65 days following the close of the taxable year in which the income is earned. Any such payment made after the close of the taxable year shall be treated as paid on the last day of the taxable year. A statement shall be attached to the return of the pooled income fund indicating the date and amount of such payments after the close of the taxable year. Subject to the provisions of part I, subchapter J, chapter 1 of the Code, the beneficiary shall include in his gross income all amounts properly paid, credited, or required to be distributed to the beneficiary during the taxable year or years of the fund ending within or with his taxable year. The governing instrument shall provide that the income interest of any designated beneficiary shall either terminate with the last regular payment which was made before the death of the beneficiary or be prorated to the date of his death.
(8) Termination of life income interest. Upon the termination of the income interest retained or created by any donor, the trustee shall sever from the fund an amount equal to the value of the remainder interest in the property upon which the income interest is based. The value of the remainder interest for such purpose may be either (i) its value as of the determination date next succeeding the termination of the income interest or (ii) its value as of the date on which the last regular payment was made before the death of the beneficiary if the income interest is terminated on such payment date. The amount so severed from the fund must either be paid to, or retained for the use of, the designated public charity, as provided in the governing instrument. However, see subparagraph (3) of this paragraph for rules relating to commingling of property.
(c) Allocation of income to beneficiary—(1) In general. Every income interest retained or created in property transferred to a pooled income fund shall be assigned a proportionate share of the annual income earned by the fund, such share, or unit of participation, being based on the fair market value of such property on the date of transfer, as provided in this paragraph.
(2) Units of participation—(i) Unit plan. (a) On each transfer of property by a donor to a pooled income fund, one or more units of participation in the fund shall be assigned to the beneficiary or beneficiaries of the income interest retained or created in such property, the number of units of participation being equal to the number obtained by dividing the fair market value of the property by the fair market value of a unit in the fund at the time of the transfer.
(b) The fair market value of a unit in the fund at the time of the transfer shall be determined by dividing the fair market value of all property in the fund at such time by the number of units then in the fund. The initial fair market value of a unit in a pooled income fund shall be the fair market value of the property transferred to the fund divided by the number of units assigned to the income interest in that property. The value of each unit of participation will fluctuate with each new transfer of property to the fund in relation to the appreciation or depreciation in the fair market value of the property in the fund, but all units in the fund will always have equal value.
(c) The share of income allocated to each unit of participation shall be determined by dividing the income of the fund for the taxable year by the outstanding number of units in the fund at the end of such year, except that, consistently with paragraph (b)(7) of this section, income shall be allocated to units outstanding during only part of such year by taking into consideration the period of time such units are outstanding. For this purpose the actual income of such part of the taxable year, or a prorated portion of the annual income, may be used, after making such adjustments as are reasonably necessary to reflect fluctuations during the year in the fair market value of the property in the fund.
(ii) Other plans. The governing instrument of the fund may provide any other reasonable method not described in subdivision (i) of this subparagraph for assigning units of participation in the fund and allocating income to such units which reaches a result reasonably consistent with the provisions of such subdivision.
(iii) Transfers between determination dates. For purposes of subdivisions (i) and (ii) of this subparagraph, if a transfer of property to the fund by a donor occurs on other than a determination date, the number of units of participation assigned to the income interest in such property may be determined by using the fair market value of the property in the fund on the determination date immediately preceding the date of transfer (determined without regard to the property so transferred), subject, however, to appropriate adjustments on the next succeeding determination date. Such adjustments may be made by any reasonable method, including the use of a method whereby the fair market value of the property in the fund at the time of the transfer is deemed to be the average of the fair market values of the property in the fund on the determination dates immediately preceding and succeeding the date of transfer. For purposes of determining such average any property transferred to the fund between such preceding and succeeding dates, or on such succeeding date, shall be excluded. The application of this subdivision may be illustrated by the following example:
(3) Special rule for partial allocation of income to charity. Notwithstanding subparagraph (2) of this paragraph, the governing instrument may provide that a unit of participation is entitled to share in the income of the fund in a lesser amount than would otherwise be determined under such subparagraph, provided that the income otherwise allocable to the unit under such subparagraph is paid within the taxable year in which it is received to the public charity to or for the use of which the remainder interest is contributed under the governing instrument.
(4) Illustrations. The application of this paragraph may be illustrated by the following examples:
| A | $1,350 ([200 × $1] + [200 × $5.75]). |
| B | $675 ([100 × $1] + [100 × $5.75]). |
| C | $575 (100 × $5.75). |
| A | 100 ($10,000 divided by $100). |
| B | 200 ($20,000 divided by $100). |
| C | 100 ($10,000 divided by $100). |
| A, B, and C | 90% ($90,000 divided by $100,000). |
| X University | 10% ($10,000 divided by $100,000). |
| A | $200 (100 × $2). |
| B | $400 (200 × $2). |
| C | $1,200 (600 × $2). |
| X University | $200 (10% × $2,000). |
§ 1.642(c)-6 Valuation of a remainder interest in property transferred to a pooled income fund.
(a) In general. (1) For purposes of sections 170, 2055, 2106, and 2522, the fair market value of a remainder interest in property transferred to a pooled income fund is its present value determined under paragraph (d) of this section.
(2) The present value of a remainder interest at the time of the transfer of property to the pooled income fund is determined by computing the present value (at the time of the transfer) of the life income interest and subtracting that value from the fair market value of the transferred property on the valuation date. The fact that the income beneficiary may not receive the last income payment, as provided in paragraph (b)(7) of § 1.642(c)-5, is not taken into account for purposes of determining the value of the life income interest. For purposes of this section, the valuation date is the date on which property is transferred to the fund by the donor except that, for purposes of section 2055 or 2106, it is the alternate valuation date, if elected, under the provisions and limitations set forth in section 2032 and the regulations thereunder.
(3) Any claim for a deduction on any return for the value of the remainder interest in property transferred to a pooled income fund must be supported by a statement attached to the return showing the computation of the present value of the interest.
(b) Actuarial computations by the Internal Revenue Service. The regulations in this and in related sections provide tables of actuarial factors and examples that illustrate the use of the tables in determining the value of remainder interests in property. Section 1.7520-1(c)(2) refers to government publications that provide additional tables of factors and examples of computations for more complex situations. If the computation requires the use of a factor that is not provided in this section, the Commissioner may supply the factor upon a request for a ruling. A request for a ruling must be accompanied by a recitation of the facts including the pooled income fund’s highest yearly rate of return for the 3 taxable years immediately preceding the date of transfer, the date of birth of each measuring life, and copies of the relevant documents. A request for a ruling must comply with the instructions for requesting a ruling published periodically in the Internal Revenue Bulletin (see §§ 601.201 and 601.601(d)(2)(ii)(b) of this chapter) and include payment of the required user fee. If the Commissioner furnishes the factor, a copy of the letter supplying the factor should be attached to the tax return in which the deduction is claimed. If the Commissioner does not furnish the factor, the taxpayer must furnish a factor computed in accordance with the principles set forth in this section.
(c) Computation of pooled income fund’s yearly rate of return. (1) For purposes of determining the present value of the life income interest, the yearly rate of return earned by a pooled income fund for a taxable year is the percentage obtained by dividing the amount of income earned by the pooled income fund for the taxable year by an amount equal to—
(i) The average fair market value of the property in such fund for that taxable year; less
(ii) The corrective term adjustment.
(2) The average fair market value of the property in a pooled income fund for a taxable year shall be the sum of the amounts of the fair market value of all property held by the pooled income fund on each determination date, as defined in paragraph (a)(5)(vi) of § 1.642(c)-5, of such taxable year divided by the number of determination dates in such taxable year. For such purposes the fair market value of property held by the fund shall be determined without including any income earned by the fund.
(3)(i) The corrective term adjustment shall be the sum of the products obtained by multiplying each income payment made by the pooled income fund within its taxable year by the percentage set forth in column (2) of the following table opposite the period within such year, set forth in column (1), which includes the date on which that payment is made:
Table
| (1) | (2) |
|---|---|
| Last week of 4th quarter | 0 |
| Balance of 4th quarter | 25 |
| Last week of 3d quarter | 25 |
| Balance of 3d quarter | 50 |
| Last week of 2d quarter | 50 |
| Balance of 2d quarter | 75 |
| Last week of 1st quarter | 75 |
| Balance of 1st quarter | 100 |
(ii) If the taxable year of the fund consists of less than 12 months, the corrective term adjustment shall be the sum of the products obtained by multiplying each income payment made by the pooled income fund within such taxable year by the percentage obtained by subtracting from 1 a fraction the numerator of which is the number of days from the first day of such taxable year to the date of such income payment and the denominator of which is 365.
(4) A pooled income fund’s method of calculating its yearly rate of return must be supported by a full statement attached to the income tax return of the pooled income fund for each taxable year.
(5) The application of this paragraph may be illustrated by the following examples:
| Date | Fair market value of property | Income payment |
|---|---|---|
| Jan. 1 | $100,000 | $1,200 |
| Apr. 1 | 105,000 | 1,200 |
| July 1 | 95,000 | 1,200 |
| Oct. 1 | 100,000 | 1,400 |
| 400,000 | 5,000 |
(c) The corrective term adjustment for 1971 is $3,050, determined by applying the percentages obtained in column (2) of the table in subparagraph (3) of this paragraph:
| 100% × $1,200 | $1,200 |
| 75% × $1,200 | 900 |
| 50% × $1,200 | 600 |
| 25% × $1,400 | 350 |
| Sum of products | 3,050 |
| Date | Fair market value of property | Income payment |
|---|---|---|
| Jan. 1 | $125,000 | |
| Apr. 1 | 125,000 | |
| July 1 | 75,000 | |
| Oct. 1 | 75,000 | |
| Dec. 15 | $3,000 | |
| Dec. 31 | 2,000 | |
| 400,000 | 5,000 |
(c) The corrective term adjustment for 1971 is $750, determined by applying the percentages obtained in column (2) of the table in subparagraph (3) of this paragraph:
| Multiplication: | |
| 0% × $2,000 | |
| 25% × $3,000 | $750 |
| Sum of products | 750 |
(d) Valuation. The present value of the remainder interest in property transferred to a pooled income fund on or after June 1, 2023, is determined under paragraph (e) of this section. The present value of the remainder interest in property transferred to a pooled income fund for which the valuation date is before June 1, 2023, is determined (subject to paragraph (e)(2) of this section) under the following sections:
Table 6 to Paragraph (
| Valuation dates | Applicable
regulations | |
|---|---|---|
| After | Before | |
| 01-01-52 | § 1.642(c)-6A(a) | |
| 12-31-51 | 01-01-71 | 1.642(c)-6A(b) |
| 12-31-70 | 12-01-83 | 1.642(c)-6A(c) |
| 11-30-83 | 05-01-89 | 1.642(c)-6A(d) |
| 04-30-89 | 05-01-99 | 1.642(c)-6A(e) |
| 04-30-99 | 05-01-09 | 1.642(c)-6A(f) |
| 04-30-09 | 06-01-23 | 1.642(c)-6A(g) |
(e) Present value of the remainder interest in the case of transfers to pooled income funds for which the valuation date is on or after June 1, 2023—(1) In general. In the case of transfers to pooled income funds for which the valuation date is on or after June 1, 2023, the present value of a remainder interest is determined under this section. See, however, § 1.7520-3(b) (relating to exceptions to the use of prescribed tables under certain circumstances). The present value of a remainder interest that is dependent on the termination of the life of one individual is computed by using the formula in § 20.2031-7(d)(2)(ii)(B) of this chapter to derive a remainder factor from the appropriate mortality table to at least five decimal places. For the convenience of taxpayers, actuarial factors have been computed by the IRS and appear in Table S. Table S currently is available, at no charge, electronically via the IRS website at https://www.irs.gov/retirement-plans/actuarial-tables (or a corresponding URL as may be updated from time to time). Table S is referenced and explained by IRS Publication 1457, Actuarial Valuations Version 4A, which will be available within a reasonable time after June 1, 2023. For purposes of the computations under this section, the age of an individual is the age at the individual’s nearest birthday.
(2) Transitional rule for valuation of transfers to pooled income funds. For purposes of section 170, 2055, 2106, 2522, or 2624, in the case of transfers to a pooled income fund for which the valuation date is after April 30, 2019, and on or before June 1, 2023, the present value of the remainder interest under this section is determined by using the section 7520 interest rate for the month in which the valuation date occurs (see §§ 1.7520-1(b) and 1.7520-2(a)(2)) and the appropriate actuarial factors derived from the selected mortality table, either Table 2010CM in § 20.2031-7(d)(7)(ii) of this chapter or Table 2000CM in § 20.2031-7A(g)(4) of this chapter, at the option of the donor or the decedent’s executor, as the case may be. If any previously filed income tax return is amended to use the actuarial factors based on Table 2010CM, the amended return must state at the top “AMENDED PURSUANT TO TD 9974.” If any previously filed gift or estate tax return is supplemented to use the actuarial factors based on Table 2010CM, the supplemental return must state at the top “SUPPLEMENTED PURSUANT TO TD 9974.” For the convenience of taxpayers, actuarial factors based on Table 2010CM appear in the current version of Table S, and actuarial factors based on Table 2000CM appear in the previous version of Table S. Both versions of Table S currently are available, at no charge, electronically via the IRS website at https://www.irs.gov/retirement-plans/actuarial-tables (or a corresponding URL as may be updated from time to time). The donor or decedent’s executor must consistently use the same mortality basis with respect to each interest (income, remainder, partial, etc.) in the same property, and with respect to all transfers occurring on the same valuation date. For example, gift and income tax charitable deductions with respect to the same transfer must be determined based on factors with the same mortality basis, and all assets includible in the gross estate and/or estate tax deductions claimed must be valued based on factors with the same mortality basis.
(3) Present value of a remainder interest. The present value of a remainder interest in property transferred to a pooled income fund is computed on the basis of—
(i) Life contingencies determined from the values of l
(ii) Discount at a rate of interest, compounded annually, equal to the highest yearly rate of return of the pooled income fund for the three taxable years immediately preceding its taxable year in which the transfer of property to the fund is made. For purposes of this paragraph (e), the yearly rate of return of a pooled income fund is determined as provided in paragraph (c) of this section unless the highest rate of return is deemed to be the rate described in paragraph (e)(4) of this section for funds in existence less than 3 taxable years. For purposes of this paragraph (e)(3)(ii), the first taxable year of a pooled income fund is considered a taxable year even though the taxable year consists of less than 12 months. However, appropriate adjustments must be made to annualize the rate of return earned by the fund for that period. Where it appears from the facts and circumstances that the highest yearly rate of return of the fund for the three taxable years immediately preceding the taxable year in which the transfer of property is made has been purposely manipulated to be substantially less than the rate of return that otherwise would be reasonably anticipated with the purpose of obtaining an excessive charitable deduction, that rate of return may not be used. In that case, the highest yearly rate of return of the fund is determined by treating the fund as a pooled income fund that has been in existence for less than three preceding taxable years.
(4) Pooled income funds in existence less than three taxable years. If a pooled income fund has been in existence less than three taxable years immediately preceding the taxable year in which the transfer is made to the fund and the transfer to the fund is made on or after May 1, 1989, the highest rate of return is deemed to be the interest rate (rounded to the nearest two-tenths of one percent) that is one percent less than the highest annual average of the monthly section 7520 rates for the three calendar years immediately preceding the calendar year in which the transfer to the pooled income fund is made. The deemed rate of return for transfers to new pooled income funds is recomputed each calendar year using the monthly section 7520 rates for the three year period immediately preceding the calendar year in which each transfer to the fund is made until the fund has been in existence for three taxable years and can compute its highest rate of return for the three taxable years immediately preceding the taxable year in which the transfer of property to the fund is made in accordance with the rules set forth in the first sentence of paragraph (e)(3)(ii) of this section.
(5) Computation of value of remainder interest—(i) Factor. The factor that is used in determining the present value of a remainder interest that is dependent on the termination of the life of one individual is the factor obtained through use of the formula in § 20.2031-7(d)(2)(ii)(B) of this chapter to derive a remainder factor from the appropriate mortality table to at least five decimal places. For the convenience of taxpayers, actuarial factors have been computed by the IRS and appear in Table S. Table S currently is available, at no charge, electronically via the IRS website at https://www.irs.gov/retirement-plans/actuarial-tables. Table S is referenced and explained in IRS Publication 1457, Actuarial Valuations Version 4A, which will be available within a reasonable time after June 1, 2023. In using the section of Table S for the interest rate equal to the appropriate yearly rate of return, the appropriate remainder factor is opposite the number that corresponds to the age of the individual upon whose life the value of the remainder interest is based (See § 1.642(c)-6A for certain prior periods). The tables referenced by IRS Publication 1457, Actuarial Valuations Version 4A, include factors for yearly rates of return from 0.2 to 20 percent, inclusive, in increments of two-tenths of one percent. For other situations, see paragraph (b) of this section. If the yearly rate of return is a percentage that is between the yearly rates of return for which factors are provided by Table S, an exact method of obtaining the applicable factors (such as through software using the actual rate of return and the actuarial formulas provided in § 20.2031-7(d)(2)(ii)(B) of this chapter) or a linear interpolation must be used, provided whichever method used is applied consistently in valuing all interests in the same property. The applicable remainder factors derived by an exact method or by interpolation must be expressed to at least five decimal places. The present value of the remainder interest is determined by multiplying the fair market value of the property on the valuation date by the appropriate remainder factor.
(ii) Sample factors from actuarial Table S. For purposes of the example in paragraph (e)(5)(iii) of this section, the following factors from Table S will be used:
Table 7 to Paragraph
| Age | Annuity | Life estate | Remainder |
|---|---|---|---|
| 55 | 13.2515 | 0.71558 | 0.28442 |
| 55 | 12.9710 | 0.72637 | 0.27363 |
(iii) Example of interpolation. After June 1, 2023, A, whose age is 54 years and 8 months, transfers $100,000 to a pooled income fund, and retains a life income interest in the property. The highest yearly rate of return earned by the fund for its 3 preceding taxable years is 5.43 percent. In Table S, the remainder factor opposite 55 years under 5.4 percent is 0.28442 and under 5.6 percent is 0.27363. The present value of the remainder interest is $28,280, computed as illustrated in Figure 1 to this paragraph (e)(5)(iii).
(6) Actuarial tables. In the case of transfers for which the valuation date is on or after June 1, 2023, the present value of a remainder interest dependent on the termination of one life in the case of a transfer to a pooled income fund is determined by using the formula in § 20.2031-7(d)(2)(ii)(B) of this chapter to derive a remainder factor from the appropriate mortality table to at least five decimal places. For the convenience of taxpayers, actuarial factors have been computed by the IRS and appear in Table S. Table S currently is available, at no charge, electronically via the IRS website at https://www.irs.gov/retirement-plans/actuarial-tables. Table S is referenced and explained in IRS Publication 1457, Actuarial Valuations Version 4A, which will be available within a reasonable time after June 1, 2023.
(f) Applicability date. This section applies on and after June 1, 2023.
§ 1.642(c)-7 Transitional rules with respect to pooled income funds.
(a) In general—(1) Amendment of certain funds. A fund created before May 7, 1971, and not otherwise qualifying as a pooled income fund may be treated as a pooled income fund to which § 1.642(c)-5 applies if on July 31, 1969, or on each date of transfer of property to the fund occurring after July 31, 1969, it possessed the initial characteristics described in paragraph (b) of this section and is amended, in the time and manner provided in paragraph (c) of this section, to meet all the requirements of section 642(c)(5) and § 1.642(c)-5. If a fund to which this subparagraph applies is amended in the time and manner provided in paragraph (c) of this section it shall be treated as provided in paragraph (d) of this section for the period beginning on August 1, 1969, or, if later, on the date of its creation and ending the day before the date on which it meets the requirements of section 642(c)(5) and § 1.642(c)-5.
(2) Severance of a portion of a fund. Any portion of a fund created before May 7, 1971, which consists of property transferred to such fund after July 31, 1969, may be severed from such fund consistently with the principles of paragraph (c)(2) of this section and established before January 1, 1972, as a separate pooled income fund, provided that on and after the date of severance the severed fund meets all the requirements of section 642(c)(5) and § 1.642(c)-5. A separate fund which is established pursuant to this subparagraph shall be treated as provided in paragraph (d) of this section for the period beginning on the day of the first transfer of property which becomes part of the separate fund and ending the day before the day on which the separate fund meets the requirements of section 642(c)(5) and § 1.642(c)-5.
(b) Initial characteristics required. A fund described in paragraph (a)(1) of this section shall not be treated as a pooled income fund to which section 642(c)(5) applies, even though it is amended as provided in paragraph (c) of this section, unless it possessed the following characteristics on July 31, 1969, or on each date of transfer of property to the fund occurring after July 31, 1969:
(1) It satisfied the requirements of section 642(c)(5)(A) other than that the fund be a trust;
(2) It was constituted in a way to attract and contain commingled properties transferred to the fund by more than one donor satisfying such requirements; and
(3) Each beneficiary of a life income interest which was retained or created in any property transferred to the fund was entitled to receive, but not less often than annually, a proportional share of the annual income earned by the fund, such share being based on the fair market value of the property in which such life interest was retained or created.
(c) Amendment requirements. (1) A fund described in paragraph (a)(1) of this section and possessing the initial characteristics described in paragraph (b) of this section on the date prescribed therein shall be treated as a pooled income fund if it is amended to meet all the requirements of section 642(c)(5) and § 1.642(c)-5 before January 1, 1972, or, if later, on or before the 30th day after the date on which any judicial proceedings commenced before January 1, 1972, which are required to amend its governing instrument or any other instrument which does not permit it to meet such requirements, become final. However, see paragraph (d) of this section for limitation on the period in which a claim for credit or refund may be filed.
(2) In addition, if the transferred property described in paragraph (b)(2) of this section is commingled with other property, the transferred property must be separated on or before the date specified in subparagraph (1) of this paragraph from the other property and allocated to the fund in accordance with the transferred property’s percentage share of the fair market value of the total commingled property on the date of separation. The percentage share shall be the ratio which the fair market value of the transferred property on the date of separation bears to the fair market value of the total commingled property on that date and shall be computed in a manner consistent with paragraph (c) of § 1.642(c)-5. The property which is so allocated to the fund shall be treated as property received from transfers which meet the requirements of section 642(c)(5), and such transfers shall be treated as made on the dates on which the properties giving rise to such allocation were transferred to the fund by the respective donors. The property so allocated to the fund must be representative of all the commingled property other than securities the income from which is exempt from tax under subtitle A of the Code; compensating increases in other commingled property allocated to the fund shall be made where such tax-exempt securities are not allocated to the fund. The application of this subparagraph may be illustrated by the following example:
| Date of transfer | Value of all property before transfer | Trust property | Other property | Value of all property after transfer | Property allocated to fund |
|---|---|---|---|---|---|
| (1) | (2) | (3) | (4) | (5) | |
| January 1, 1968 | $100,000 | $100,000 | $200,000 | 1 $100,000 | |
| September 30, 1968 | $300,000 | 100,000 | 400,000 | 2 250,000 | |
| January 15, 1969 | 480,000 | 60,000 | 540,000 | 3 360,000 | |
| November 11, 1969 | 600,000 | 200,000 | 800,000 | 4 600,000 |
1 $100,000 = (the amount in column (2)).
2 $250,000 = ([$100,000/$200,000 × $300,000] + $100,000).
3 $360,000 = ([$250,000/$400,000 × $480,000] + $60,000).
4 $600,000 = ([$360,000/$540,000 × $600,000] + $200,000).
(d) Transactions before amendment of or severance from fund. (1) A fund which is amended pursuant to paragraph (c) of this section, or is severed from a fund pursuant to paragraph (a)(2) of this section, shall be treated for all purposes, including the allowance of a deduction for any charitable contribution, as if it were before its amendment or severance a pooled income fund to which section 642(c)(5) and § 1.642(c)-5 apply. Thus, for example, where a donor transferred property in trust to such an amended or severed fund on August 1, 1969, but before its amendment or severance under this section, a charitable contributions deduction for the value of the remainder interest may be allowed under section 170, 2055, 2106, or 2522. The deduction may not be allowed, however, until the fund is amended or severed pursuant to this section and shall be allowed only if a claim for credit or refund is filed within the period of limitation prescribed by section 6511(a).
(2) For purposes of determining under § 1.642(c)-6 the highest yearly rate of return earned by a fund (which is amended pursuant to paragraph (c) of this section) for the 3 preceding taxable years, taxable years of the fund preceding its taxable year in which the fund is so amended and qualifies as a pooled income fund under this section shall be used provided that the fund did not at any time during such preceding years hold any investments in securities the income from which is exempt from tax under subtitle A of the Code. If any such tax-exempt securities were held during such period by such amended fund, or if the fund consists of a portion of a fund which is severed pursuant to paragraph (a)(2) of this section, the highest yearly rate of return under § 1.642(c)-6 shall be determined by treating the fund as a pooled income fund which has been in existence for less than 3 taxable years preceding the taxable year in which the transfer of property to the fund is made.
(3) Property transferred to a fund before its amendment pursuant to paragraph (c) of this section, or before its severance under paragraph (a)(2) of this section, shall be treated as property received from transfers which meet the requirements of section 642(c)(5).
§ 1.642(d)-1 Net operating loss deduction.
The net operating loss deduction allowed by section 172 is available to estates and trusts generally, with the following exceptions and limitations:
(a) In computing gross income and deductions for the purposes of section 172, a trust shall exclude that portion of the income and deductions attributable to the grantor or another person under sections 671 through 678 (relating to grantors and others treated as substantial owners).
(b) An estate or trust shall not, for the purposes of section 172, avail itself of the deductions allowed by section 642(c) (relating to charitable contributions deductions) and sections 651 and 661 (relating to deductions for distributions).
§ 1.642(e)-1 Depreciation and depletion.
An estate or trust is allowed the deductions for depreciation and depletion, but only to the extent the deductions are not apportioned to beneficiaries under sections 167(h) and 611(b). For purposes of sections 167(h) and 611(b), the term beneficiaries includes charitable beneficiaries. See the regulations under those sections.
§ 1.642(f)-1 Amortization deductions.
An estate or trust is allowed amortization deductions with respect to an emergency facility as defined in section 168(d), with respect to a certified pollution control facility as defined in section 169(d), with respect to qualified railroad rolling stock as defined in section 184(d), with respect to certified coal mine safety equipment as defined in section 187(d), with respect to on-the-job training and child-care facilities as defined in section 188(b), and with respect to certain rehabilitations of certified historic structures as defined in section 191, in the same manner and to the same extent as in the case of an individual. However, the principles governing the apportionment of the deductions for depreciation and depletion between fiduciaries and the beneficiaries of an estate or trust (see sections 167(h) and 611(b) and the regulations thereunder) shall be applicable with respect to such amortization deductions.
§ 1.642(g)-1 Disallowance of double deductions; in general.
Amounts allowable under section 2053(a)(2) (relating to administration expenses) or under section 2054 (relating to losses during administration) as deductions in computing the taxable estate of a decedent are not allowed as deductions in computing the taxable income of the estate unless there is filed a statement, in duplicate, to the effect that the items have not been allowed as deductions from the gross estate of the decedent under section 2053 or 2054 and that all rights to have such items allowed at any time as deductions under section 2053 or 2054 are waived. The statement should be filed with the return for the year for which the items are claimed as deductions or with the district director for the internal revenue district in which the return was filed, for association with the return. The statement may be filed at any time before the expiration of the statutory period of limitation applicable to the taxable year for which the deduction is sought. Allowance of a deduction in computing an estate’s taxable income is not precluded by claiming a deduction in the estate tax return, so long as the estate tax deduction is not finally allowed and the statement is filed. However, after a statement is filed under section 642(g) with respect to a particular item or portion of an item, the item cannot thereafter be allowed as a deduction for estate tax purposes since the waiver operates as a relinquishment of the right to have the deduction allowed at any time under section 2053 or 2054.
§ 1.642(g)-2 Deductions included.
It is not required that the total deductions, or the total amount of any deduction, to which section 642(g) is applicable be treated in the same way. One deduction or portion of a deduction may be allowed for income tax purposes if the appropriate statement is filed, while another deduction or portion is allowed for estate tax purposes. Section 642(g) has no application to deductions for taxes, interest, business expenses, and other items accrued at the date of a decedent’s death so that they are allowable as a deduction under section 2053(a)(3) for estate tax purposes as claims against the estate, and are also allowable under section 691(b) as deductions in respect of a decedent for income tax purposes. However, section 642(g) is applicable to deductions for interest, business expenses, and other items not accrued at the date of the decedent’s death so that they are allowable as deductions for estate tax purposes only as administration expenses under section 2053(a)(2). Although deductible under section 2053(a)(3) in determining the value of the taxable estate of a decedent, medical, dental, etc., expenses of a decedent which are paid by the estate of the decedent are not deductible in computing the taxable income of the estate. See section 213(d) and the regulations thereunder for rules relating to the deductibility of such expenses in computing the taxable income of the decedent.
§ 1.642(h)-1 Unused loss carryovers on termination of an estate or trust.
(a) If, on the final termination of an estate or trust, a net operating loss carryover under section 172 or a capital loss carryover under section 1212 would be allowable to the estate or trust in a taxable year subsequent to the taxable year of termination but for the termination, the carryover or carryovers are allowed under section 642(h)(1) to the beneficiaries succeeding to the property of the estate or trust. See § 1.641(b)-3 for the determination of when an estate or trust terminates.
(b) The net operating loss carryover and the capital loss carryover are the same in the hands of a beneficiary as in the estate or trust, except that the capital loss carryover in the hands of a beneficiary which is a corporation is a short-term loss irrespective of whether it would have been a long-term or short-term capital loss in the hands of the estate or trust. The net operating loss carryover and the capital loss carryover are taken into account in computing taxable income, adjusted gross income, and the tax imposed by section 56 (relating to the minimum tax for tax preferences). The first taxable year of the beneficiary to which the loss shall be carried over is the taxable year of the beneficiary in which or with which the estate or trust terminates. However, for purposes of determining the number of years to which a net operating loss, or a capital loss under paragraph (a) of § 1.1212-1, may be carried over by a beneficiary, the last taxable year of the estate or trust (whether or not a short taxable year) and the first taxable year of the beneficiary to which a loss is carried over each constitute a taxable year, and, in the case of a beneficiary of an estate or trust that is a corporation, capital losses carried over by the estate or trust to any taxable year of the estate or trust beginning after December 31, 1963, shall be treated as if they were incurred in the last taxable year of the estate or trust (whether or not a short taxable year). For the treatment of the net operating loss carryover when the last taxable year of the estate or trust is the last taxable year to which such loss can be carried over, see § 1.642(h)-2.
(c) The application of this section may be illustrated by the following examples:
§ 1.642(h)-2 Excess deductions on termination of an estate or trust.
(a) Excess deductions—(1) In general. If, on the termination of an estate or trust, the estate or trust has for its last taxable year deductions (other than the deductions allowed under section 642(b) (relating to the personal exemption) or section 642(c) (relating to charitable contributions)) in excess of gross income, the excess deductions as determined under paragraph (b) of this section are allowed under section 642(h)(2) as items of deduction to the beneficiaries succeeding to the property of the estate or trust.
(2) Treatment by beneficiary. A beneficiary may claim all or part of the amount of the deductions provided for in paragraph (a) of this section, as determined after application of paragraph (b) of this section, before, after, or together with the same character of deductions separately allowable to the beneficiary under the Internal Revenue Code for the beneficiary’s taxable year during which the estate or trust terminated as provided in paragraph (c) of this section.
(b) Character and amount of excess deductions—(1) Character. The character and amount of the excess deductions on termination of an estate or trust will be determined as provided in this paragraph (b). Each deduction comprising the excess deductions under section 642(h)(2) retains, in the hands of the beneficiary, its character (specifically, as allowable in arriving at adjusted gross income, as a non-miscellaneous itemized deduction, or as a miscellaneous itemized deduction) while in the estate or trust. An item of deduction succeeded to by a beneficiary remains subject to any additional applicable limitation under the Internal Revenue Code and must be separately stated if it could be so limited, as provided in the instructions to Form 1041, U.S. Income Tax Return for Estates and Trusts, and the Schedule K-1 (Form 1041), Beneficiary’s Share of Income, Deductions, Credit, etc., or successor forms.
(2) Amount. The amount of the excess deductions in the final year is determined as follows:
(i) Each deduction directly attributable to a class of income is allocated in accordance with the provisions in § 1.652(b)-(a);
(ii) To the extent of any remaining income after application of paragraph (b)(2)(i) of this section, deductions are allocated in accordance with the provisions in § 1.652(b)-3(b) and (d); and
(iii) Deductions remaining after the application of paragraph (b)(2)(i) and (ii) of this section comprise the excess deductions on termination of the estate or trust. These deductions are allocated to the beneficiaries succeeding to the property of the estate of or trust in accordance with § 1.642(h)-4.
(c) Year of termination—(1) In general. The deductions provided for in paragraph (a) of this section are allowable only in the taxable year of the beneficiary in which or with which the estate or trust terminates, whether the year of termination of the estate or trust is of normal duration or is a short taxable year.
(2) Example. Assume that a trust distributes all its assets to B and terminates on December 31, Year X. As of that date, it has excess deductions of $18,000, all characterized as allowable in arriving at adjusted gross income under section 67(e). B, who reports on the calendar year basis, could claim the $18,000 as a deduction allowable in arriving at B’s adjusted gross income for Year X. However, if the deduction (when added to other allowable deductions that B claims for the year) exceeds B’s gross income, the excess may not be carried over to any year subsequent to Year X.
(d) Net operating loss carryovers. A deduction based upon a net operating loss carryover will never be allowed to beneficiaries under both paragraphs (1) and (2) of section 642(h). Accordingly, a net operating loss deduction which is allowable to beneficiaries succeeding to the property of the estate or trust under the provisions of paragraph (1) of section 642(h) cannot also be considered a deduction for purposes of paragraph (2) of section 642(h) and paragraph (a) of this section. However, if the last taxable year of the estate or trust is the last year in which a deduction on account of a net operating loss may be taken, the deduction, to the extent not absorbed in that taxable year by the estate or trust, is considered an “excess deduction” under section 642(h)(2) and paragraph (a) of this section.
(e) Items included in net operating loss or capital loss carryovers. (c) Any item of income or deduction, or any part thereof, which is taken into account in determining the net operating loss or capital loss carryover of the estate or trust for its last taxable year shall not be taken into account again in determining excess deductions on termination of the trust or estate within the meaning of section 642(h)(2) and paragraph (a) of this section (see example in § 1.642(h)-5).
(f) Applicability date. Paragraphs (a) through (c) of this section apply to taxable years beginning after October 19, 2020. The rules applicable to taxable years beginning on or before October 19, 2020 are contained in § 1.642(h)-2 as in effect prior to October 19, 2020 (see 26 CFR part 1 revised as of April 1, 2020). Taxpayers may choose to apply paragraphs (a) through (c) of this section to taxable years beginning after December 31, 2017, and on or before October 19, 2020.
§ 1.642(h)-3 Meaning of “beneficiaries succeeding to the property of the estate or trust”.
(a) The phrase beneficiaries succeeding to the property of the estate or trust means those beneficiaries upon termination of the estate or trust who bear the burden of any loss for which a carryover is allowed, or of any excess of deductions over gross income for which a deduction is allowed, under section 642(h).
(b) With reference to an intestate estate, the phrase means the heirs and next of kin to whom the estate is distributed, or if the estate is insolvent, to whom it would have been distributed if it had not been insolvent. If a decedent’s spouse is entitled to a specified dollar amount of property before any distribution to other heirs and next of kin, and if the estate is less than that amount, the spouse is the beneficiary succeeding to the property of the estate or trust to the extent of the deficiency in amount.
(c) In the case of a testate estate, the phrase normally means the residuary beneficiaries (including a residuary trust), and not specific legatees or devisees, pecuniary legatees, or other nonresiduary beneficiaries. However, the phrase does not include the recipient of a specific sum of money even though it is payable out of the residue, except to the extent that it is not payable in full. On the other hand, the phrase includes a beneficiary (including a trust) who is not strictly a residuary beneficiary but whose devise or bequest is determined by the value of the decedent’s estate as reduced by the loss or deductions in question. Thus the phrase includes:
(1) A beneficiary of a fraction of a decedent’s net estate after payment of debts, expenses, etc.;
(2) A nonresiduary legatee or devisee, to the extent of any deficiency in his legacy or devise resulting from the insufficiency of the estate to satisfy it in full;
(3) A surviving spouse receiving a fractional share of an estate in fee under a statutory right of election, to the extent that the loss or deductions are taken into account in determining the share. However, the phrase does not include a recipient of dower or curtesy, or any income beneficiary of the estate or trust from which the loss or excess deduction is carried over.
(d) The principles discussed in paragraph (c) of this section are equally applicable to trust beneficiaries. A remainderman who receives all or a fractional share of the property of a trust as a result of the final termination of the trust is a beneficiary succeeding to the property of the trust. For example, if property is transferred to pay the income to A for life and then to pay $10,000 to B and distribute the balance of the trust corpus to C, C and not B is considered to be the succeeding beneficiary except to the extent that the trust corpus is insufficient to pay B $10,000.
§ 1.642(h)-4 Allocation.
The carryovers and excess deductions to which section 642(h) applies are allocated among the beneficiaries succeeding to the property of an estate or trust (see § 1.642(h)-3) proportionately according to the share of each in the burden of the loss or deductions. A person who qualified as a beneficiary succeeding to the property of an estate or trust with respect to one amount and does not qualify with respect to another amount is a beneficiary succeeding to the property of the estate or trust as to the amount with respect to which he qualifies. The application of this section may be illustrated by the following example:
§ 1.642(h)-5 Examples.
Paragraphs (a) and (b) of this section (Examples 1 and 2) illustrate the application of section 642(h).
(a) Example 1: Computations under section 642(h) when an estate has a net operating loss—(1) Facts. On January 31, 2020, A dies leaving a will that provides for the distribution of all of A’s estate equally to B and an existing trust for C. The period of administration of the estate terminates on December 31, 2020, at which time all the property of the estate is distributed to B and the trust. For tax purposes, B and the trust report income on a calendar year basis. During the period of administration, the estate has the following items of income and deductions:
Table 1 to Paragraph (
| Income: | |
| Taxable interest | $2,500 |
| Business income | 3,000 |
| Total income | 5,500 |
Table 2 to Paragraph (
| Deductions: | |
| Business expenses (including administrative expense allocable to business income) | 5,000 |
| Administrative expenses not allocable to business income that would not have been incurred if property had not been held in a trust or estate (section 67(e) deductions) | 9,800 |
| Total deductions | 14,800 |
(2) Computation of net operating loss. (i) The amount of the net operating loss carryover is computed as follows:
Table 3 to Paragraph (
| Gross income | $5,500 |
| Total deductions | 14,800 |
| Less adjustment under section 172(d)(4) (allowable non-business expenses ($9,800) limited to non-business income ($2,500)) | 7,300 |
| Deductions as adjusted | 7,500 |
| Net operating loss | 2,000 |
(ii) Under section 642(h)(1), B and the trust are each allocated $1,000 of the $2,000 unused net operating loss carryover of the terminated estate in 2020, with the allowance of any net operating loss carryover to B and the trust determined under section 172. Neither B nor the trust can carry back any of the net operating loss of A’s estate made available to them under section 642(h)(1). See § 1.642(h)-1(b).
(3) Section 642(h)(2) excess deductions. The $7,300 of non-business deductions not taken into account in determining the net operating loss of the estate are excess deductions on termination of the estate under section 642(h)(2). Under § 1.642(h)-2(b)(1), such deductions retain their character as section 67(e) deductions. Under § 1.642(h)-4, B and the trust each are allocated $3,650 of excess deductions based on B’s and the trust’s respective shares of the burden of each cost.
(4) Consequences for C. The net operating loss carryover and excess deductions are not allowable directly to C, the trust beneficiary. To the extent the distributable net income of the trust is reduced by the net operating loss carryover and excess deductions, however, C may receive an indirect benefit from the carryover and excess deductions.
(b) Example 2: Computations under section 642(h)(2)—(1) Facts. D dies in 2019 leaving an estate of which the residuary legatees are E (75%) and F (25%). The estate’s income and deductions in its final year are as follows:
Table 4 to Paragraph (
| Income: | |
| Dividends | $3,000 |
| Taxable Interest | 500 |
| Rent | 2,000 |
| Capital Gain | 1,000 |
| Total Income | 6,500 |
Table 5 to Paragraph (
| Deductions: | |
| Section 62(a)(4) deductions: | |
| Rental real estate expenses | 2,000 |
| Section 67(e) deductions: | |
| Probate fees | 1,500 |
| Estate tax preparation fees | 8,000 |
| Legal fees | 2,500 |
| Total Section 67(e) deductions | 12,000 |
| Non-miscellaneous itemized deductions: | |
| Personal property taxes | 3,500 |
| Total deductions | 17,500 |
(2) Determination of character. Pursuant to § 1.642(h)-2(b)(2), the character and amount of the excess deductions is determined by allocating the deductions among the estate’s items of income as provided under § 1.652(b)-3. Under § 1.652(b)-3(a), the $2,000 of rental real estate expenses is allocated to the $2,000 of rental income. In the exercise of the executor’s discretion pursuant to § 1.652(b)-3(b), D’s executor allocates $3,500 of personal property taxes and $1,000 of section 67(e) deductions to the remaining income. As a result, the excess deductions on termination of the estate are $11,000, all consisting of section 67(e) deductions.
(3) Allocations among beneficiaries. Pursuant to § 1.642(h)-4, the excess deductions are allocated in accordance with E’s (75 percent) and F’s (25 percent) interests in the residuary estate. E’s share of the excess deductions is $8,250, all consisting of section 67(e) deductions. F’s share of the excess deductions is $2,750, also all consisting of section 67(e) deductions.
(4) Separate statement. If the executor instead allocated $4,500 of section 67(e) deductions to the remaining income of the estate, the excess deductions on termination of the estate would be $11,000, consisting of $7,500 of section 67(e) deductions and $3,500 of personal property taxes. The non-miscellaneous itemized deduction for personal property taxes may be subject to limitation on the returns of both B and C’s trust under section 164(b)(6)(B) and would have to be separately stated as provided in § 1.642(h)-2(b)(1).
(c) Applicability date. This section is applicable to taxable years beginning after October 19, 2020. Taxpayers may choose to apply this section to taxable years beginning after December 31, 2017, and on or before October 19, 2020.
§ 1.642(i)-1 Certain distributions by cemetery perpetual care funds.
(a) In general. Section 642 (i) provides that amounts distributed during taxable years ending after December 31, 1963, by a cemetery perpetual care fund trust for the care and maintenance of gravesites shall be treated as distributions solely for purposes of sections 651 and 661. The deduction for such a distribution is allowable only if the fund is taxable as a trust. In addition, the fund must have been created pursuant to local law by a taxable cemetery corporation (as defined in § 1.642 (i)-2 (a)) expressly for the care and maintenance of cemetery property. A care fund will be treated as having been created by a taxable cemetery corporation (“cemetery”) if the distributee cemetery is taxable, even though the care fund was created by the distributee cemetery in a year that it was tax-exempt or by a predecessor of such distributee cemetery which was tax-exempt in the year the fund was established. The deduction is the amount of the distributions during the fund’s taxable year to the cemetery corporation for such care and maintenance that would be otherwise allowable under section 651 or 661, but in no event is to exceed the limitations described in paragraphs (b) and (c) of this section. The provisions of this paragraph shall not have the effect of extending the period of limitations under section 6511.
(b) Limitation on amount of deduction. The deduction in any taxable year may not exceed the product of $5 multiplied by the aggregate number of gravesites sold by the cemetery corporation before the beginning of the taxable year of the trust. In general, the aggregate number of gravesites sold shall be the aggregate number of interment rights sold by the cemetery corporation (including gravesites sold by the cemetery before a care fund trust law was enacted). In addition, the number of gravesites sold shall include gravesites used to make welfare burials. Welfare burials and pre-trust fund law gravesites shall be included only to the extent that the cemetery cares for and maintain such gravesites. For purposes of this section, a gravesite is sold as of the date on which the purchaser acquires interment rights enforceable under local law. The aggregate number of gravesites includes only those gravesites with respect to which the fund or taxable cemetery corporation has an obligation for care and maintenance.
(c) Requirements for deductibility of distributions for care and maintenance—(1) Obligation for care and maintenance. A deduction is allowed only for distributions for the care and maintenance of gravesites with respect to which the fund or taxable cemetery corporation has an obligation for care and maintenance. Such obligation may be established by the trust instrument, by local law, or by the cemetery’s practice of caring for and maintaining gravesites, such as welfare burial plots or gravesites sold before the enactment of a care fund trust law.
(2) Distribution actually used for care and maintenance. The amount of a deduction otherwise allowable for care fund distributions in any taxable year shall not exceed the portion of such distributions expended by the distributee cemetery corporation for the care and maintenance of gravesites before the end of the fund’s taxable year following the taxable year in which it makes the distributions. A 6-month extension of time for filing the trust’s return may be obtained upon request under section 6081. The failure of a cemetery to expend the care fund’s distributions within a reasonable time before the due date for filing the return will be considered reasonable grounds for granting a 6-month extension of time for section 6081. For purposes of this paragraph, any amount expended by the care fund directly for the care and maintenance of gravesites shall be treated as an additional care fund distribution which is expended on the day of distribution by the cemetery corporation. The fund shall be allowed a deduction for such direct expenditure in the fund’s taxable year during which the expenditure is made.
(3) Example. The application of paragraph (c)(2) of this section is illustrated by the following example:
(d) Certified statement made by cemetery officials to fund trustees. A trustee of a cemetery perpetual care fund shall not be held personally liable for civil or criminal penalties resulting from false statements on the trust’s tax return to the extent that such false statements resulted from the trustee’s reliance on a certified statement made by the cemetery specifying the number of interments sold by the cemetery or the amount of the cemetery’s expenditures for care and maintenance. The statement must indicate the basis upon which the cemetery determined what portion of its expenditures were made for the care and maintenance of gravesites. The statement must be certified by an officer or employee of the cemetery who has the responsibility to make or account for expenditures for care and maintenance. A copy of this statement shall be retained by the trustee along with the trust’s return and shall be made available for inspection upon request by the Secretary. This paragraph does not relieve the care fund trust of its liability to pay the proper amount of tax due and to maintain adequate records to substantiate each of its deductions, including the deduction provided in section 642(i) and this section.
§ 1.642(i)-2 Definitions.
(a) Taxable cemetery corporation. For purposes of section 642(i) and this section, the meaning of the term taxable cemetery corporation is limited to a corporation (within the meaning of section 7701(a)(3)) engaged in the business of owning and operating a cemetery that either (1) is not exempt from Federal tax, or (2) is subject to tax under section 511 with respect to its cemetery activities.
(b) Pursuant to local law. A cemetery perpetual care fund is created pursuant to local law if:
(1) The governing law of the relevant jurisdiction (State, district, county, parish, etc.) requires or expressly permits the creation of such a fund, or
(2) The legally enforceable bylaws or contracts of a taxable cemetery corporation require a perpetual care fund.
(c) Gravesite. A gravesite is any type of interment right that has been sold by a cemetery, including, but not limited to, a burial lot, mausoleum, lawn crypt, niche, or scattering ground. For purposes of § 1.642 (i)-1, the term gravesites includes only those gravesites with respect to which the care fund or cemetery has an obligation for care and maintenance within the meaning of § 1.642 (i)-1(c)(1).
(d) Care and maintenance. For purposes of section 642(i) and this section, the term care and maintenance of gravesite shall be generally defined in accordance with the definition of such term under the local law pursuant to which the cemetery perpetual care fund is created. If the applicable local law contains no definition, care and maintenance of gravesites may include the upkeep, repair and preservation of those portions of cemetery property in which gravesites (as defined in paragraph (c) of this section) have been sold; including gardening, road maintenance, water line and drain repair and other activities reasonably necessary to the preservation of cemetery property. The costs for care and maintenance include, but are not limited to, expenditures for the maintenance, repair and replacement of machinery, tools, and equipment, compensation of employees performing such work, insurance premiums, reasonable payments for employees’ pension and other benefit plans, and the costs of maintaining necessary records of lot ownership, transfers and burials. However, if some of the expenditures of the cemetery corporation, such as officers’ salaries, are for both care and maintenance and for other purposes, the expenditures must be properly allocated between care and maintenance of gravesites and the other purposes. Only those expenditures that are properly allocable to those portions of cemetery property in which gravesites have been sold qualify as expenditures for care and maintenance of gravesites.
§ 1.643(a)-0 Distributable net income; deduction for distributions; in general.
The term distributable net income has no application except in the taxation of estates and trusts and their beneficiaries. It limits the deductions allowable to estates and trusts for amounts paid, credited, or required to be distributed to beneficiaries and is used to determine how much of an amount paid, credited, or required to be distributed to a beneficiary will be includible in his gross income. It is also used to determine the character of distributions to the beneficiaries. Distributable net income means for any taxable year, the taxable income (as defined in section 63) of the estate or trust, computed with the modifications set forth in §§ 1.643(a)-1 through 1.643(a)-7.
§ 1.643(a)-1 Deduction for distributions.
The deduction allowable to a trust under section 651 and to an estate or trust under section 661 for amounts paid, credited, or required to be distributed to beneficiaries is not allowed in the computation of distributable net income.
§ 1.643(a)-2 Deduction for personal exemption.
The deduction for personal exemption under section 642(b) is not allowed in the computation of distributable net income.
§ 1.643(a)-3 Capital gains and losses.
(a) In general. Except as provided in § 1.643(a)-6 and paragraph (b) of this section, gains from the sale or exchange of capital assets are ordinarily excluded from distributable net income and are not ordinarily considered as paid, credited, or required to be distributed to any beneficiary.
(b) Capital gains included in distributable net income. Gains from the sale or exchange of capital assets are included in distributable net income to the extent they are, pursuant to the terms of the governing instrument and applicable local law, or pursuant to a reasonable and impartial exercise of discretion by the fiduciary (in accordance with a power granted to the fiduciary by applicable local law or by the governing instrument if not prohibited by applicable local law)—
(1) Allocated to income (but if income under the state statute is defined as, or consists of, a unitrust amount, a discretionary power to allocate gains to income must also be exercised consistently and the amount so allocated may not be greater than the excess of the unitrust amount over the amount of distributable net income determined without regard to this subparagraph § 1.643(a)-3(b));
(2) Allocated to corpus but treated consistently by the fiduciary on the trust’s books, records, and tax returns as part of a distribution to a beneficiary; or
(3) Allocated to corpus but actually distributed to the beneficiary or utilized by the fiduciary in determining the amount that is distributed or required to be distributed to a beneficiary.
(c) Charitable contributions included in distributable net income. If capital gains are paid, permanently set aside, or to be used for the purposes specified in section 642(c), so that a charitable deduction is allowed under that section in respect of the gains, they must be included in the computation of distributable net income.
(d) Capital losses. Losses from the sale or exchange of capital assets shall first be netted at the trust level against any gains from the sale or exchange of capital assets, except for a capital gain that is utilized under paragraph (b)(3) of this section in determining the amount that is distributed or required to be distributed to a particular beneficiary. See § 1.642(h)-1 with respect to capital loss carryovers in the year of final termination of an estate or trust.
(e) Examples. The following examples illustrate the rules of this section:
(f) Effective date. This section applies for taxable years of trusts and estates ending after January 2, 2004.
§ 1.643(a)-4 Extraordinary dividends and taxable stock dividends.
In the case solely of a trust which qualifies under subpart B (section 651 and following) as a “simple trust,” there are excluded from distributable net income extraordinary dividends (whether paid in cash or in kind) or taxable stock dividends which are not distributed or credited to a beneficiary because the fiduciary in good faith determines that under the terms of the governing instrument and applicable local law such dividends are allocable to corpus. See section 665(e), paragraph (b) of § 1.665(e)-1, and paragraph (b) of § 1.665(e)-1A for the treatment of such dividends upon subsequent distribution.
§ 1.643(a)-5 Tax-exempt interest.
(a) There is included in distributable net income any tax-exempt interest excluded from gross income under section 103, reduced by disbursements allocable to such interest which would have been deductible under section 212 but for the provisions of section 265 (relating to disallowance of deductions allocable to tax-exempt income).
(b) If the estate or trust is allowed a charitable contributions deduction under section 642(c), the amounts specified in paragraph (a) of this section and § 1.643(a)-6 are reduced by the portion deemed to be included in income paid, permanently set aside, or to be used for the purposes specified in section 642(c). If the governing instrument or local law specifically provides as to the source out of which amounts are paid, permanently set aside, or to be used for such charitable purposes, the specific provision controls for Federal tax purposes to the extent such provision has economic effect independent of income tax consequences. See § 1.652(b)-2(b). In the absence of such specific provisions in the governing instrument or local law, an amount to which section 642(c) applies is deemed to consist of the same proportion of each class of the items of income of the estate or trust as the total of each class bears to the total of all classes. For illustrations showing the determination of the character of an amount deductible under section 642(c), see Examples 1 and 2 of § 1.662(b)-2 and § 1.662(c)-4(e).
§ 1.643(a)-6 Income of foreign trust.
(a) Distributable net income of a foreign trust. In the case of a foreign trust (see section 7701(a)(31)), the determination of distributable net income is subject to the following rules:
(1) There is included in distributable net income the amounts of gross income from sources without the United States, reduced by disbursements allocable to such foreign income which would have been deductible but for the provisions of section 265 (relating to disallowance of deductions allocable to tax exempt income). See paragraph (b) of § 1.643(a)-5 for rules applicable when an estate or trust is allowed a charitable contributions deduction under section 642(c).
(2) In the case of a distribution made by a trust before January 1, 1963, for purposes of determining the distributable net income of the trust for the taxable year in which the distribution is made, or for any prior taxable year;
(i) Gross income from sources within the United States is determined by taking into account the provisions of section 894 (relating to income exempt under treaty); and
(ii) Distributable net income is determined by taking into account the provisions of section 643(a)(3) (relating to exclusion of certain gains from the sale or exchange of capital assets).
(3) In the case of a distribution made by a trust after December 31, 1962, for purposes of determining the distributable net income of the trust for any taxable year, whether ending before January 1, 1963, or after December 31, 1962;
(i) Gross income (for the entire foreign trust) from sources within the United States is determined without regard to the provisions of section 894 (relating to income exempt under treaty);
(ii) In respect of a foreign trust created by a U.S. person (whether such trust constitutes the whole or only a portion of the entire foreign trust) (see section 643(d) and § 1.643(d)-1), there shall be included in gross income gains from the sale or exchange of capital assets reduced by losses from such sales or exchanges to the extent such losses do not exceed gains from such sales or exchanges, and the deduction under section 1202 (relating to deduction for capital gains) shall not be taken into account; and
(iii) In respect of a foreign trust created by a person other than a U.S. person (whether such trust constitutes the whole or only a portion of the entire foreign trust) (see section 643(d) and § 1.643(d)-1), distributable net income is determined by taking into account all of the provisions of section 643 except section 643(a)(6)(C) (relating to gains from the sale or exchange of capital assets by a foreign trust created by a U.S. person).
(b) Examples. The application of this section, showing the computation of distributable net income for one of the taxable years for which such a computation must be made, may be illustrated by the following examples:
| Interest on bonds of a U.S. corporation | $10,000 |
| Net long-term capital gain from U.S. sources | 30,000 |
| Gross income from investments in Country X | 40,000 |
| Net short-term capital loss from U.S. sources | 5,000 |
| Expenses allocable to gross income from investments in Country X | 5,000 |
| Interest on bonds of a U.S. corporation | $10,000 | |
| Gross income from investments in Country X | 40,000 | |
| Net long-term capital gain from U.S. sources | $30,000 | |
| Less: Net short-term capital loss from U.S. sources | 5,000 | |
| Excess of net long-term capital gain over net short-term capital loss | 25,000 | |
| Total | 75,000 | |
| Less: Expenses allocable to income from investments in Country X | 5,000 | |
| Distributable net income | 70,000 | |
(2) The distributable net income for the taxable year 1964 of the foreign trust created by a U.S. person, determined under section 643(a), is $42,000 computed as follows:
| Interest on bonds of a U.S. corporation (60 percent of $10,000) | $6,000 | |
| Gross income from investments in Country X (60 percent of $40,000) | 24,000 | |
| Net long-term capital gain from U.S. sources (60 percent of $30,000) | $18,000 | |
| Less: Net short-term capital loss from U.S. sources (60 percent of $5,000) | 3,000 | |
| 15,000 | ||
| Total | 45,000 | |
| Less: Expenses allocable to income from investments in Country X (60 percent of $5,000) | 3,000 | |
| Distributable net income | 42,000 | |
| Interest on bonds of a U.S. corporation (40 percent of $10,000) | $4,000 |
| Gross income from investments in Country X (40 percent of $40,000) | 16,000 |
| Total | 20,000 |
| Less: Expenses allocable to income from investments in Country X (40 percent of $5,000) | 2,000 |
| Distributable net income | 18,000 |
| Distributable net income of the foreign trust created by a U.S. person | $42,000 |
| Distributable net income of that portion of the entire foreign trust which does not constitute a foreign trust created by a U.S. person | 18,000 |
| Distributable net income of the entire foreign trust | 60,000 |
§ 1.643(a)-7 Dividends.
Dividends excluded from gross income under section 116 (relating to partial exclusion of dividends received) are included in distributable net income. For this purpose, adjustments similar to those required by § 1.643(a)-5 with respect to expenses allocable to tax-exempt income and to income included in amounts paid or set aside for charitable purposes are not made. See the regulations under section 642(c).
§ 1.643(a)-8 Certain distributions by charitable remainder trusts.
(a) Purpose and scope. This section is intended to prevent the avoidance of the purposes of the charitable remainder trust rules regarding the characterizations of distributions from those trusts in the hands of the recipients and should be interpreted in a manner consistent with this purpose. This section applies to all charitable remainder trusts described in section 664 and the beneficiaries of such trusts.
(b) Deemed sale by trust. (1) For purposes of section 664(b), a charitable remainder trust shall be treated as having sold, in the year in which a distribution of an annuity or unitrust amount is made from the trust, a pro rata portion of the trust assets to the extent that the distribution of the annuity or unitrust amount would (but for the application of this paragraph (b)) be characterized in the hands of the recipient as being from the category described in section 664(b)(4) and exceeds the amount of the previously undistributed
(i) Cash contributed to the trust (with respect to which a deduction was allowable under section 170, 2055, 2106, or 2522); plus
(ii) Basis in any contributed property (with respect to which a deduction was allowable under section 170, 2055, 2106, or 2522) that was sold by the trust.
(2) Any transaction that has the purpose or effect of circumventing the rules in this paragraph (b) shall be disregarded.
(3) For purposes of paragraph (b)(1) of this section, trust assets do not include cash or assets purchased with the proceeds of a trust borrowing, forward sale, or similar transaction.
(4) Proper adjustment shall be made to any gain or loss subsequently realized for gain or loss taken into account under paragraph (b)(1) of this section.
(c) Examples. The following examples illustrate the rules of paragraph (b) of this section:
(d) Effective date. This section is applicable to distributions made by a charitable remainder trust after October 18, 1999.
§ 1.643(b)-1 Definition of income.
For purposes of subparts A through D, part I, subchapter J, chapter 1 of the Internal Revenue Code, “income,” when not preceded by the words “taxable,” “distributable net,” “undistributed net,” or “gross,” means the amount of income of an estate or trust for the taxable year determined under the terms of the governing instrument and applicable local law. Trust provisions that depart fundamentally from traditional principles of income and principal will generally not be recognized. For example, if a trust instrument directs that all the trust income shall be paid to the income beneficiary but defines ordinary dividends and interest as principal, the trust will not be considered one that under its governing instrument is required to distribute all its income currently for purposes of section 642(b) (relating to the personal exemption) and section 651 (relating to simple trusts). Thus, items such as dividends, interest, and rents are generally allocated to income and proceeds from the sale or exchange of trust assets are generally allocated to principal. However, an allocation of amounts between income and principal pursuant to applicable local law will be respected if local law provides for a reasonable apportionment between the income and remainder beneficiaries of the total return of the trust for the year, including ordinary and tax-exempt income, capital gains, and appreciation. For example, a state statute providing that income is a unitrust amount of no less than 3% and no more than 5% of the fair market value of the trust assets, whether determined annually or averaged on a multiple year basis, is a reasonable apportionment of the total return of the trust. Similarly, a state statute that permits the trustee to make adjustments between income and principal to fulfill the trustee’s duty of impartiality between the income and remainder beneficiaries is generally a reasonable apportionment of the total return of the trust. Generally, these adjustments are permitted by state statutes when the trustee invests and manages the trust assets under the state’s prudent investor standard, the trust describes the amount that may or must be distributed to a beneficiary by referring to the trust’s income, and the trustee after applying the state statutory rules regarding the allocation of receipts and disbursements to income and principal, is unable to administer the trust impartially. Allocations pursuant to methods prescribed by such state statutes for apportioning the total return of a trust between income and principal will be respected regardless of whether the trust provides that the income must be distributed to one or more beneficiaries or may be accumulated in whole or in part, and regardless of which alternate permitted method is actually used, provided the trust complies with all requirements of the state statute for switching methods. A switch between methods of determining trust income authorized by state statute will not constitute a recognition event for purposes of section 1001 and will not result in a taxable gift from the trust’s grantor or any of the trust’s beneficiaries. A switch to a method not specifically authorized by state statute, but valid under state law (including a switch via judicial decision or a binding non-judicial settlement) may constitute a recognition event to the trust or its beneficiaries for purposes of section 1001 and may result in taxable gifts from the trust’s grantor and beneficiaries, based on the relevant facts and circumstances. In addition, an allocation to income of all or a part of the gains from the sale or exchange of trust assets will generally be respected if the allocation is made either pursuant to the terms of the governing instrument and applicable local law, or pursuant to a reasonable and impartial exercise of a discretionary power granted to the fiduciary by applicable local law or by the governing instrument, if not prohibited by applicable local law. This section is effective for taxable years of trusts and estates ending after January 2, 2004.
§ 1.643(b)-2 Dividends allocated to corpus.
Extraordinary dividends or taxable stock dividends which the fiduciary, acting in good faith, determines to be allocable to corpus under the terms of the governing instrument and applicable local law are not considered “income” for purposes of subpart A, B, C, or D, part I, subchapter J, chapter 1 of the Code. See section 643(a)(4), § 1.643(a)-4, § 1.643(d)-2, section 665(e), paragraph (b) of § 1.665(e)-1, and paragraph (b) of § 1.665(e)-1A for the treatment of such items in the computation of distributable net income.
§ 1.643(c)-1 Definition of “beneficiary”.
An heir, legatee, or devisee (including an estate or trust) is a beneficiary. A trust created under a decedent’s will is a beneficiary of the decedent’s estate. The following persons are treated as beneficiaries:
(a) Any person with respect to an amount used to discharge or satisfy that person’s legal obligation as that term is used in § 1.662(a)-4.
(b) The grantor of a trust with respect to an amount applied or distributed for the support of a dependent under the circumstances specified in section 677(b) out of corpus or out of other than income for the taxable year of the trust.
(c) The trustee or cotrustee of a trust with respect to an amount applied or distributed for the support of a dependent under the circumstances specified in section 678(c) out of corpus or out of other than income for the taxable year of the trust.
§ 1.643(d)-1 Definition of “foreign trust created by a United States person”.
(a) In general. For the purpose of part I, subchapter J, chapter 1 of the Internal Revenue Code, the term foreign trust created by a United States person means that portion of a foreign trust (as defined in section 7701(a)(31)) attributable to money or property (including all accumulated earnings, profits, or gains attributable to such money or property) of a U.S. person (as defined in section 7701(a)(30)) transferred directly or indirectly, or under the will of a decedent who at the date of his death was a U.S. citizen or resident, to the foreign trust. A foreign trust created by a person who is not a U.S. person, to which a U.S. person transfers his money or property, is a foreign trust created by a U.S. person to the extent that the fair market value of the entire foreign trust is attributable to money or property of the U.S. person transferred to the foreign trust. The transfer of money or property to the foreign trust may be made either directly or indirectly by a U.S. person. Transfers of money or property to a foreign trust do not include transfers of money or property pursuant to a sale or exchange which is made for a full and adequate consideration. Transfers to which section 643(d) and this section apply are transfers of money or property which establish or increase the corpus of a foreign trust. The rules set forth in this section with respect to transfers by a U.S. person to a foreign trust also are applicable with respect to transfers under the will of a decedent who at the date of his death was a U.S. citizen or resident. For provisions relating to the information returns which are required to be filed with respect to the creation of or transfers to foreign trusts, see section 6048.
(b) Determination of a foreign trust created by a U.S. person—(1) Transfers of money or property only by a U.S. person. If all the items of money or property constituting the corpus of a foreign trust are transferred to the trust by a U.S. person, the entire foreign trust is a foreign trust created by a U.S. person.
(2) Transfers of money or property by both a U.S. person and a person other than a U.S. person; transfers required to be treated as separate funds. Where there are transfers of money or property by both a U.S. person and a person other than a U.S. person to a foreign trust, and it is necessary, either by reason of the provisions of the governing instrument of the trust or by reason of some other requirement such as local law, that the trustee treat the entire foreign trust as composed of two separate funds, one consisting of the money or property (including all accumulated earnings, profits, or gains attributable to such money or property) transferred by the U.S. person and the other consisting of the money or property (including all accumulated earnings, profits, or gains attributable to such money or property) transferred by the person other than the U.S. person, the foreign trust created by a U.S. person shall be the fund consisting of the money or property transferred by the U.S. person. See example 1 in paragraph (c) of this section.
(3) Transfers of money or property by both a U.S. person and a person other than a U.S. person; transfers not required to be treated as separate funds. Where the corpus of a foreign trust consists of money or property transferred to the trust (simultaneously or at different times) by a U.S. person and by a person who is not a U.S. person, the foreign trust created by a U.S. person within the meaning of section 643(d) is that portion of the entire foreign trust which, immediately after any transfer of money or property to the trust, the fair market value of money or property (including all accumulated earnings, profits, or gains attributable to such money or property) transferred to the foreign trust by the U.S. person bears to the fair market value of the corpus (including all accumulated earnings, profits, or gains attributable to the corpus) of the entire foreign trust.
(c) Examples. The provisions of paragraph (b) of this section may be illustrated by the following examples. Example 1 illustrates the application of paragraph (b)(2) of this section. Example (2) illustrates the application of paragraph (b)(3) of this section in a case where there is no provision in the governing instrument of the trust or elsewhere which would require the trustee to treat the corpus of the trust as composed of more than one fund.
§ 1.643(d)-2 Illustration of the provisions of section 643.
(a) The provisions of section 643 may be illustrated by the following example:
| Dividends from domestic corporations | $30,000 | |
| Extraordinary dividends allocated to corpus by the trustee in good faith | 20,000 | |
| Taxable interest | 10,000 | |
| Tax-exempt interest | 10,000 | |
| Long-term capital gains | 10,000 | |
| Trustee’s commissions and miscellaneous expenses allocable to corpus | 5,000 | |
(3) The “distributable net income” determined under section 643(a) amounts to $45,000, computed as follows:
| Dividends from domestic corporations | $30,000 | |
| Taxable interest | 10,000 | |
| Nontaxable interest | $10,000 | |
| Less: Expenses allocable thereto | 1,000 | |
| 9,000 | ||
| Total | 49,000 | |
| Less: Expenses ($5,000 less $1,000 allocable to tax-exempt interest) | 4,000 | |
| Distributable net income | 45,000 | |
(b) See paragraph (c) of the example in § 1.661(c)-2 for the computation of distributable net income where there is a charitable contributions deduction.
§ 1.643(f)-1 Treatment of multiple trusts.
(a) General rule. For purposes of subchapter J of chapter 1 of subtitle A of Title 26 of the United States Code, two or more trusts will be aggregated and treated as a single trust if such trusts have substantially the same grantor or grantors and substantially the same primary beneficiary or beneficiaries, and if a principal purpose for establishing one or more of such trusts or for contributing additional cash or other property to such trusts is the avoidance of Federal income tax. For purposes of applying this rule, spouses will be treated as one person.
(b) Applicability date. The provisions of this section apply to taxable years ending after August 16, 2018.
§ 1.643(h)-1 Distributions by certain foreign trusts through intermediaries.
(a) In general—(1) Principal purpose of tax avoidance. Except as provided in paragraph (b) of this section, for purposes of part I of subchapter J, chapter 1 of the Internal Revenue Code, and section 6048, any property (within the meaning of paragraph (f) of this section) that is transferred to a United States person by another person (an intermediary) who has received property from a foreign trust will be treated as property transferred directly by the foreign trust to the United States person if the intermediary received the property from the foreign trust pursuant to a plan one of the principal purposes of which was the avoidance of United States tax.
(2) Principal purpose of tax avoidance deemed to exist. For purposes of paragraph (a)(1) of this section, a transfer will be deemed to have been made pursuant to a plan one of the principal purposes of which was the avoidance of United States tax if the United States person—
(i) Is related (within the meaning of paragraph (e) of this section) to a grantor of the foreign trust, or has another relationship with a grantor of the foreign trust that establishes a reasonable basis for concluding that the grantor of the foreign trust would make a gratuitous transfer (within the meaning of § 1.671-2(e)(2)) to the United States person;
(ii) Receives from the intermediary, within the period beginning twenty-four months before and ending twenty-four months after the intermediary’s receipt of property from the foreign trust, either the property the intermediary received from the foreign trust, proceeds from such property, or property in substitution for such property; and
(iii) Cannot demonstrate to the satisfaction of the Commissioner that—
(A) The intermediary has a relationship with the United States person that establishes a reasonable basis for concluding that the intermediary would make a gratuitous transfer to the United States person;
(B) The intermediary acted independently of the grantor and the trustee of the foreign trust;
(C) The intermediary is not an agent of the United States person under generally applicable United States agency principles; and
(D) The United States person timely complied with the reporting requirements of section 6039F, if applicable, if the intermediary is a foreign person.
(b) Exceptions—(1) Nongratuitous transfers. Paragraph (a) of this section does not apply to the extent that either the transfer from the foreign trust to the intermediary or the transfer from the intermediary to the United States person is a transfer that is not a gratuitous transfer within the meaning of § 1.671-2(e)(2).
(2) Grantor as intermediary. Paragraph (a) of this section does not apply if the intermediary is the grantor of the portion of the trust from which the property that is transferred is derived. For the definition of grantor, see § 1.671-2(e).
(c) Effect of disregarding intermediary—(1) General rule. Except as provided in paragraph (c)(2) of this section, the intermediary is treated as an agent of the foreign trust, and the property is treated as transferred to the United States person in the year the property is transferred, or made available, by the intermediary to the United States person. The fair market value of the property transferred is determined as of the date of the transfer by the intermediary to the United States person. For purposes of section 665(d)(2), the term taxes imposed on the trust includes any income, war profits, and excess profits taxes imposed by any foreign country or possession of the United States on the intermediary with respect to the property transferred.
(2) Exception. If the Commissioner determines, or if the taxpayer can demonstrate to the satisfaction of the Commissioner, that the intermediary is an agent of the United States person under generally applicable United States agency principles, the property will be treated as transferred to the United States person in the year the intermediary receives the property from the foreign trust. The fair market value of the property transferred will be determined as of the date of the transfer by the foreign trust to the intermediary. For purposes of section 901(b), any income, war profits, and excess profits taxes imposed by any foreign country or possession of the United States on the intermediary with respect to the property transferred will be treated as having been imposed on the United States person.
(3) Computation of gross income of intermediary. If property is treated as transferred directly by the foreign trust to a United States person pursuant to this section, the fair market value of such property is not taken into account in computing the gross income of the intermediary (if otherwise required to be taken into account by the intermediary but for paragraph (a) of this section).
(d) Transfers not in excess of $10,000. This section does not apply if, during the taxable year of the United States person, the aggregate fair market value of all property transferred to such person from all foreign trusts either directly or through one or more intermediaries does not exceed $10,000.
(e) Related parties. For purposes of this section, a United States person is treated as related to a grantor of a foreign trust if the United States person and the grantor are related for purposes of section 643(i)(2)(B), with the following modifications—
(1) For purposes of applying section 267 (other than section 267(f)) and section 707(b)(1), “at least 10 percent” is used instead of “more than 50 percent” each place it appears; and
(2) The principles of section 267(b)(10), using “at least 10 percent” instead of “more than 50 percent,” apply to determine whether two corporations are related.
(f) Definition of property. For purposes of this section, the term property includes cash.
(g) Examples. The following examples illustrate the rules of this section. In each example, FT is an irrevocable foreign trust that is not treated as owned by any other person and the fair market value of the property that is transferred exceeds $10,000. The examples are as follows:
(h) Effective date. The rules of this section are applicable to transfers made to United States persons after August 10, 1999.
Pooled Income Fund Actuarial Tables Applicable Before June 1, 2023
§ 1.642(c)-6A Valuation of charitable remainder interests for which the valuation date is before June 1, 2023.
(a) Valuation of charitable remainder interests for which the valuation date is before January 1, 1952. There was no provision for the qualification of pooled income funds under section 642 until 1969. See § 20.2031-7A(a) of this chapter (Estate Tax Regulations) for the determination of the present value of a charitable remainder interest created before January 1, 1952.
(b) Valuation of charitable remainder interests for which the valuation date is after December 31, 1951, and before January 1, 1971. No charitable deduction is allowable for a transfer to a pooled income fund for which the valuation date is after the effective dates of the Tax Reform Act of 1969 unless the pooled income fund meets the requirements of section 642(c)(5). See § 20.2031-7A(b) of this chapter (Estate Tax Regulations) for the determination of the present value of a charitable remainder interest for which the valuation date is after December 31, 1951, and before January 1, 1971.
(c) Present value of remainder interest in the case of transfers to pooled income funds for which the valuation date is after December 31, 1970, and before December 1, 1983. For the determination of the present value of a remainder interest in property transferred to a pooled income fund for which the valuation date is after December 31, 1970, and before December 1, 1983, see § 20.2031-7A(c) of this chapter (Estate Tax Regulations) and former § 1.642(c)-6(e) (as contained in the 26 CFR part 1 edition revised as of April 1, 1994).
(d) Present value of remainder interest dependent on the termination of one life in the case of transfers to pooled income funds made after November 30, 1983, for which the valuation date is before May 1, 1989—(1) In general. For transfers to pooled income funds made after November 30, 1983, for which the valuation date is before May 1, 1989, the present value of the remainder interest at the time of the transfer of property to the fund is determined by computing the present value (at the time of the transfer) of the life income interest in the transferred property (as determined under paragraph (d)(2) of this section) and subtracting that value from the fair market value of the transferred property on the valuation date. The present value of a remainder interest that is dependent on the termination of the life of one individual is computed by use of Table G in paragraph (d)(4) of this section. For purposes of the computation under this section, the age of an individual is to be taken as the age of the individual at the individual’s nearest birthday.
(2) Present value of life income interest. The present value of the life income interest in property transferred to a pooled income fund shall be computed on the basis of:
(i) Life contingencies determined from the values of lx that are set forth in Table LN of § 20.2031-7A(d)(6) of this chapter (Estate Tax Regulations); and
(ii) Discount at a rate of interest, compounded annually, equal to the highest yearly rate of return of the pooled income fund for the 3 taxable years immediately preceding its taxable year in which the transfer of property to the fund is made. For purposes of this paragraph (d)(2), the yearly rate of return of a pooled income fund is determined as provided in § 1.642(c)-6(c) unless the highest yearly rate of return is deemed to be 9 percent. For purposes of this paragraph (d)(2), the first taxable year of a pooled income fund is considered a taxable year even though the taxable year consists of less than 12 months. However, appropriate adjustments must be made to annualize the rate of return earned by the fund for that period. Where it appears from the facts and circumstances that the highest yearly rate of return for the 3 taxable years immediately preceding the taxable year in which the transfer of property is made has been purposely manipulated to be substantially less than the rate of return that would otherwise be reasonably anticipated with the purpose of obtaining an excessive charitable deduction, that rate of return may not be used. In that case, the highest yearly rate of return of the fund is determined by treating the fund as a pooled income fund that has been in existence for less than 3 preceding taxable years. If a pooled income fund has been in existence less than 3 taxable years immediately preceding the taxable year in which the transfer of property to the fund is made, the highest yearly rate of return is deemed to be 9 percent.
(3) Computation of value of remainder interest. The factor which is used in determining the present value of the remainder interest is the factor under the appropriate yearly rate of return in column (2) of Table G opposite the number in column (1) which corresponds to the age of the individual upon whose life the value of the remainder interest is based. If the yearly rate of return is a percentage which is between yearly rates of return for which factors are provided in Table G, a linear interpolation must be made. The present value of the remainder interest is determined by multiplying, by the factor determined under this paragraph (d)(3), the fair market value on the appropriate valuation date. If the yearly rate of return is below 2.2 percent or above 14 percent, see § 1.642(c)-6(b). This paragraph (d)(3) may be illustrated by the following example:
| Factor at 9.8 percent for person aged 50 | .15653 |
| Factor at 10 percent for person aged 50 | .15257 |
| Difference | .00396 |
| Interpolation adjustment: |
| Factor at 9.8 percent for person aged 50 | 0.15653 |
| Less: | |
| Interpolation adjustment | .00198 |
| Interpolated factor | .15455 |
| Present value of remainder interest ($100,000 × .15455 | $15,455 |
(4) Actuarial tables. The following tables shall be used in the application of the provisions of this section.
Table G
Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
| (1) Age | (2) Yearly rate of return | ||||
|---|---|---|---|---|---|
| 2.2% | 2.4% | 2.6% | 2.8% | 3.0% | |
| 0 | .23930 | .21334 | .19077 | .17113 | .15401 |
| 1 | .22891 | .20224 | .17903 | .15880 | .14114 |
| 2 | .23297 | .20610 | .18265 | .16218 | .14429 |
| 3 | .23744 | .21035 | .18669 | .16600 | .14787 |
| 4 | .24212 | .21485 | .19098 | .17006 | .15171 |
| 5 | .24701 | .21955 | .19547 | .17434 | .15577 |
| 6 | .25207 | .22442 | .20015 | .17880 | .16001 |
| 7 | .25726 | .22944 | .20497 | .18342 | .16441 |
| 8 | .26259 | .23461 | .20995 | .18820 | .16898 |
| 9 | .26809 | .23995 | .21511 | .19315 | .17373 |
| 10 | .27373 | .24544 | .22043 | .19828 | .17865 |
| 11 | .27953 | .25110 | .22592 | .20358 | .18375 |
| 12 | .28546 | .25690 | .23156 | .20904 | .18902 |
| 13 | .29149 | .26280 | .23731 | .21462 | .19440 |
| 14 | .29757 | .26877 | .24312 | .22026 | .19986 |
| 15 | .30368 | .27476 | .24896 | .22593 | .20535 |
| 16 | .30978 | .28075 | .25481 | .23161 | .21085 |
| 17 | .31589 | .28676 | .26068 | .23732 | .21637 |
| 18 | .32204 | .29280 | .26659 | .24306 | .22193 |
| 19 | .32825 | .29892 | .27257 | .24889 | .22759 |
| 20 | .33457 | .30514 | .27867 | .25484 | .23336 |
| 21 | .34099 | .31148 | .28489 | .26092 | .23927 |
| 22 | .34751 | .31794 | .29124 | .26712 | .24532 |
| 23 | .35416 | .32452 | .29773 | .27348 | .25152 |
| 24 | .36096 | .33127 | .30439 | .28002 | .25791 |
| 25 | .36793 | .33821 | .31124 | .28676 | .26452 |
| 26 | .37509 | .34535 | .31832 | .29374 | .27136 |
| 27 | .38244 | .35269 | .32560 | .30093 | .27844 |
| 28 | .38998 | .36023 | .33311 | .30836 | .28577 |
| 29 | .39767 | .36795 | .34080 | .31599 | .29330 |
| 30 | .40553 | .37584 | .34868 | .32382 | .30104 |
| 31 | .41352 | .38388 | .35672 | .33182 | .30897 |
| 32 | .42165 | .39208 | .36494 | .34001 | .31710 |
| 33 | .42993 | .40044 | .37333 | .34839 | .32543 |
| 34 | .43834 | .40894 | .38188 | .35694 | .33395 |
| 35 | .44689 | .41760 | .39060 | .36567 | .34266 |
| 36 | .45556 | .42640 | .39947 | .37458 | .35156 |
| 37 | .46435 | .43534 | .40850 | .38365 | .36063 |
| 38 | .47325 | .44440 | .41767 | .39288 | .36987 |
| 39 | .48226 | .45358 | .42696 | .40225 | .37927 |
| 40 | .49136 | .46288 | .43640 | .41177 | .38884 |
| 41 | .50056 | .47228 | .44596 | .42143 | .39856 |
| 42 | .50988 | .48182 | .45566 | .43125 | .40846 |
| 43 | .51927 | .49145 | .46547 | .44120 | .41850 |
| 44 | .52874 | .50118 | .47540 | .45128 | .42869 |
| 45 | .53828 | .51099 | .48543 | .46146 | .43899 |
| 46 | .54788 | .52088 | .49554 | .47176 | .44943 |
| 47 | .55754 | .53083 | .50574 | .48216 | .45998 |
| 48 | .56726 | .54087 | .51604 | .49267 | .47065 |
| 49 | .57703 | .55097 | .52642 | .50327 | .48144 |
| 50 | .58685 | .56114 | .53688 | .51398 | .49234 |
| 51 | .59670 | .57136 | .54740 | .52476 | .50333 |
| 52 | .60658 | .58161 | .55798 | .53560 | .51441 |
| 53 | .61647 | .59189 | .56859 | .54651 | .52556 |
| 54 | .62635 | .60217 | .57923 | .55744 | .53675 |
| 55 | .63622 | .61246 | .58987 | .56840 | .54798 |
| 56 | .64606 | .62273 | .60052 | .57937 | .55923 |
| 57 | .65589 | .63299 | .61117 | .59037 | .57052 |
| 58 | .66569 | .64324 | .62181 | .60136 | .58183 |
| 59 | .67546 | .65347 | .63246 | .61237 | .59316 |
| 60 | .68521 | .66368 | .64309 | .62338 | .60450 |
| 61 | .69492 | .67388 | .65372 | .63440 | .61587 |
| 62 | .70461 | .68406 | .66434 | .64542 | .62726 |
| 63 | .71425 | .69420 | .67494 | .65643 | .63865 |
| 64 | .72384 | .70430 | .68550 | .66742 | .65002 |
| 65 | .73336 | .71434 | .69602 | .67837 | .66137 |
| 66 | .74281 | .72431 | .70647 | .68926 | .67267 |
| 67 | .75216 | .73419 | .71684 | .70009 | .68391 |
| 68 | .76143 | .74399 | .72714 | .71085 | .69509 |
| 69 | .77060 | .75370 | .73735 | .72153 | .70622 |
| 70 | .77969 | .76334 | .74750 | .73215 | .71728 |
| 71 | .78870 | .77290 | .75758 | .74272 | .72830 |
| 72 | .79764 | .78240 | .76760 | .75323 | .73928 |
| 73 | .80646 | .79178 | .77751 | .76364 | .75016 |
| 74 | .81511 | .80099 | .78725 | .77387 | .76086 |
| 75 | .82353 | .80995 | .79674 | .78386 | .77132 |
| 76 | .83169 | .81866 | .80596 | .79357 | .78149 |
| 77 | .83960 | .82710 | .81491 | .80301 | .79139 |
| 78 | .84727 | .83530 | .82360 | .81218 | .80101 |
| 79 | .85473 | .84328 | .83207 | .82112 | .81041 |
| 80 | .86201 | .85106 | .84034 | .82986 | .81960 |
| 81 | .86905 | .85861 | .84837 | .83835 | .82853 |
| 82 | .87585 | .86589 | .85612 | .84655 | .83717 |
| 83 | .88239 | .87291 | .86360 | .85447 | .84552 |
| 84 | .88873 | .87971 | .87085 | .86216 | .85362 |
| 85 | .89487 | .88630 | .87789 | .86963 | .86150 |
| 86 | .90070 | .89258 | .88459 | .87674 | .86901 |
| 87 | .90609 | .89838 | .89079 | .88332 | .87597 |
| 88 | .91106 | .90372 | .89650 | .88939 | .88239 |
| 89 | .91570 | .90872 | .90184 | .89507 | .88839 |
| 90 | .92014 | .91350 | .90696 | .90051 | .89416 |
| 91 | .92435 | .91804 | .91182 | .90569 | .89964 |
| 92 | .92822 | .92222 | .91630 | .91045 | .90469 |
| 93 | .93170 | .92597 | .92032 | .91474 | .90923 |
| 94 | .93477 | .92929 | .92387 | .91853 | .91325 |
| 95 | .93743 | .93216 | .92695 | .92181 | .91673 |
| 96 | .93967 | .93458 | .92955 | .92458 | .91966 |
| 97 | .94167 | .93674 | .93186 | .92704 | .92228 |
| 98 | .94342 | .93863 | .93389 | .92921 | .92457 |
| 99 | 94508 | 94041 | .93580 | .93124 | .92673 |
| 100 | .94672 | .94218 | .93770 | .93326 | .92887 |
| 101 | .94819 | .94377 | .93940 | .93508 | .93080 |
| 102 | .94979 | .94550 | .94125 | .93704 | .93288 |
| 103 | .95180 | .94766 | .94357 | .93952 | .93550 |
| 104 | .95377 | .94979 | .94585 | .94194 | .93806 |
| 105 | .95663 | .95288 | .94916 | .94547 | .94181 |
| 106 | .96101 | .95762 | .95425 | .95091 | .94760 |
| 107 | .96688 | .96398 | .96110 | .95824 | .95539 |
| 108 | .97569 | .97354 | .97141 | .96928 | .96717 |
| 109 | .98924 | .98828 | .98733 | .98638 | .98544 |
Table G
Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
| (1) Age | (2) Yearly rate of return | ||||
|---|---|---|---|---|---|
| 3.2% | 3.4% | 3.6% | 3.8% | 4.0% | |
| 0 | .13908 | .12603 | .11461 | .10461 | .09583 |
| 1 | .12570 | .11220 | .10036 | .08998 | .08086 |
| 2 | .12862 | .11489 | .10284 | .09225 | .08293 |
| 3 | .13198 | .11802 | .10576 | .09496 | .08544 |
| 4 | .13559 | .12141 | .10893 | .09793 | .08821 |
| 5 | .13943 | .12503 | .11234 | .10112 | .09121 |
| 6 | .14345 | .12884 | .11593 | .10451 | .09439 |
| 7 | .14763 | .13280 | .11968 | .10805 | .09773 |
| 8 | .15198 | .13694 | .12360 | .11176 | .10125 |
| 9 | .15652 | .14126 | .12771 | .11567 | .10495 |
| 10 | .16123 | .14576 | .13200 | .11975 | .10883 |
| 11 | .16613 | .15045 | .13648 | .12402 | .11290 |
| 12 | .17119 | .15531 | .14113 | .12847 | .11715 |
| 13 | .17638 | .16029 | .14591 | .13304 | .12152 |
| 14 | .18164 | .16535 | .15076 | .13769 | .12597 |
| 15 | .18693 | .17044 | .15565 | .14238 | .13045 |
| 16 | .19224 | .17554 | .16055 | .14707 | .13494 |
| 17 | .19756 | .18066 | .16547 | .15178 | .13945 |
| 18 | .20294 | .18584 | .17044 | .15655 | .14401 |
| 19 | .20840 | .19110 | .17550 | .16140 | .14866 |
| 20 | .21399 | .19650 | .18069 | .16639 | .15344 |
| 21 | .21972 | .20203 | .18602 | .17152 | .15836 |
| 22 | .22559 | .20771 | .19151 | .17680 | .16344 |
| 23 | .23162 | .21356 | .19716 | .18225 | .16869 |
| 24 | .23784 | .21960 | .20301 | .18791 | .17414 |
| 25 | .24429 | .22588 | .20910 | .19380 | .17984 |
| 26 | .25098 | .23240 | .21545 | .19996 | .18581 |
| 27 | .25792 | .23918 | .22206 | .20639 | .19205 |
| 28 | .26512 | .24623 | .22894 | .21310 | .19858 |
| 29 | .27253 | .25350 | .23605 | .22004 | .20534 |
| 30 | .28016 | .26100 | .24341 | .22724 | .21236 |
| 31 | .28799 | .26871 | .25097 | .23464 | .21961 |
| 32 | .29603 | .27664 | .25877 | .24230 | .22710 |
| 33 | .30428 | .28478 | .26679 | .25018 | .23484 |
| 34 | .31273 | .29314 | .27504 | .25830 | .24280 |
| 35 | .32139 | .30172 | .28351 | .26665 | .25102 |
| 36 | .33024 | .31050 | .29220 | .27523 | .25948 |
| 37 | .33929 | .31949 | .30111 | .28404 | .26816 |
| 38 | .34851 | .32867 | .31022 | .29305 | .27707 |
| 39 | .35791 | .33804 | .31953 | .30228 | .28620 |
| 40 | .36749 | .34759 | .32904 | .31172 | .29555 |
| 41 | .37724 | .35733 | .33874 | .32137 | .30512 |
| 42 | .38717 | .36727 | .34866 | .33124 | .31493 |
| 43 | .39727 | .37739 | .35877 | .34132 | .32495 |
| 44 | .40752 | .38768 | .36906 | .35159 | .33518 |
| 45 | .41791 | .39811 | .37952 | .36204 | .34560 |
| 46 | .42844 | .40871 | .39014 | .37267 | .35621 |
| 47 | .43910 | .41944 | .40092 | .38347 | .36701 |
| 48 | .44990 | .43034 | .41188 | .39446 | .37801 |
| 49 | .46083 | .44137 | .42299 | .40562 | .38919 |
| 50 | .47189 | .45256 | .43427 | .41695 | .40056 |
| 51 | .48306 | .46386 | .44567 | .42844 | .41209 |
| 52 | .49432 | .47528 | .45721 | .44006 | .42378 |
| 53 | .50567 | .48679 | .46886 | .45182 | .43562 |
| 54 | .51708 | .49838 | .48060 | .46367 | .44756 |
| 55 | .52854 | .51004 | .49242 | .47563 | .45962 |
| 56 | .54004 | .52175 | .50430 | .48766 | .47177 |
| 57 | .55159 | .53352 | .51626 | .49978 | .48402 |
| 58 | .56316 | .54533 | .52827 | .51196 | .49636 |
| 59 | .57478 | .55719 | .54036 | .52424 | .50879 |
| 60 | .58643 | .56910 | .55250 | .53658 | .52131 |
| 61 | .59811 | .58107 | .56471 | .54901 | .53393 |
| 62 | .60982 | .59307 | .57697 | .56150 | .54662 |
| 63 | .62155 | .60510 | .58928 | .57405 | .55940 |
| 64 | .63327 | .61714 | .60161 | .58664 | .57222 |
| 65 | .64498 | .62918 | .61395 | .59926 | .58508 |
| 66 | .65666 | .64120 | .62628 | .61188 | .59796 |
| 67 | .66829 | .65319 | .63859 | .62448 | .61083 |
| 68 | .67986 | .66512 | .65086 | .63706 | .62370 |
| 69 | .69139 | .67702 | .66311 | .64963 | .63656 |
| 70 | .70286 | .68888 | .67533 | .66218 | .64942 |
| 71 | .71431 | .70073 | .68754 | .67474 | .66231 |
| 72 | .72572 | .71255 | .69974 | .68730 | .67520 |
| 73 | .73704 | .72429 | .71188 | .69980 | .68805 |
| 74 | .74819 | .73586 | .72384 | .71214 | .70075 |
| 75 | .75909 | .74718 | .73557 | .72424 | .71320 |
| 76 | .76971 | .75822 | .74700 | .73606 | .72538 |
| 77 | .78004 | .76897 | .75815 | .74758 | .73726 |
| 78 | .79010 | .77944 | .76902 | .75883 | .74886 |
| 79 | .79993 | .78968 | .77965 | .76984 | .76023 |
| 80 | .80955 | .79971 | .79008 | .78064 | .77140 |
| 81 | .81891 | .80948 | .80024 | .79118 | .78230 |
| 82 | .82796 | .81894 | .81009 | .80140 | .79288 |
| 83 | .83672 | .82810 | .81962 | .81131 | .80314 |
| 84 | .84525 | .83700 | 82891 | .82096 | .81314 |
| 85 | .85352 | .84567 | .83795 | .83037 | .82291 |
| 86 | .86141 | .85394 | .84659 | .83936 | .83224 |
| 87 | .86874 | .86162 | .85461 | .84771 | .84092 |
| 88 | .87549 | .86870 | .86201 | .85542 | .84893 |
| 89 | .88182 | .87534 | .86895 | .86266 | .85645 |
| 90 | .88789 | .88171 | .87562 | 86961 | .86369 |
| 91 | .89367 | .88779 | .88198 | .87625 | .87059 |
| 92 | .89900 | .89338 | .88784 | .88237 | .87697 |
| 93 | .90379 | .89842 | .89312 | .88788 | .88271 |
| 94 | .90803 | .90288 | .89780 | .89277 | .88781 |
| 95 | .91171 | .90675 | .90185 | .89701 | .89223 |
| 96 | .91481 | .91001 | .90527 | .90058 | .89594 |
| 97 | .91757 | .91291 | .90831 | .90376 | .89926 |
| 98 | .91999 | .91546 | .91098 | .90655 | .90217 |
| 99 | .92227 | .91786 | .91349 | .90917 | .90490 |
| 100 | .92453 | .92023 | .91598 | .91177 | .90761 |
| 101 | .92656 | .92236 | .91821 | .91410 | .91003 |
| 102 | .92875 | .92467 | .92063 | .91662 | .91266 |
| 103 | .93152 | .92758 | .92367 | .91980 | 91597 |
| 104 | .93423 | .93042 | .92665 | .92291 | .91920 |
| 105 | .93818 | .93458 | .93101 | .92747 | .92395 |
| 106 | .94430 | .94104 | .93779 | .93457 | .93127 |
| 107 | 95256 | .94975 | .94696 | .94418 | .94143 |
| 108 | .96507 | 96298 | .96090 | .95883 | .95676 |
| 109 | .98450 | .98356 | .98263 | .98170 | .98077 |
Table G
Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
| (1) Age | (2) Yearly rate of return | ||||
|---|---|---|---|---|---|
| 4.2% | 4.4% | 4.6% | 4.8% | 5.0% | |
| 0 | .08811 | .08132 | .07534 | .07006 | .06539 |
| 1 | .07283 | .06576 | .05952 | .05400 | .04912 |
| 2 | .07471 | .06746 | .06106 | .05539 | .05037 |
| 3 | .07704 | .06962 | .06304 | .05722 | .05205 |
| 4 | .07962 | .07202 | .06528 | .05930 | .05398 |
| 5 | .08243 | .07464 | .06773 | .06159 | .05612 |
| 6 | .08542 | .07745 | .07037 | .06406 | .05844 |
| 7 | .08857 | .08042 | .07316 | .06669 | .06091 |
| 8 | .09189 | .08355 | .07612 | .06948 | .06354 |
| 9 | .09540 | .08687 | .07926 | .07245 | .06635 |
| 10 | .09908 | .09037 | .08258 | .07560 | .06934 |
| 11 | .10296 | .09406 | .08609 | .07894 | .07251 |
| 12 | .10701 | .09793 | .08977 | .08245 | .07586 |
| 13 | .11119 | .10191 | .09358 | .08608 | .07932 |
| 14 | .11544 | .10597 | .09745 | .08978 | .08285 |
| 15 | .11972 | .11007 | .10136 | .09350 | .08640 |
| 16 | .12402 | .11416 | .10527 | .09723 | .08995 |
| 17 | .12832 | .11827 | .10919 | .10096 | .09351 |
| 18 | .13268 | .12243 | .11315 | .10474 | .09711 |
| 19 | .13712 | .12667 | .11720 | .10860 | .10078 |
| 20 | .14170 | .13105 | .12138 | .11259 | .10459 |
| 21 | .14642 | .13557 | .12570 | .11671 | .10853 |
| 22 | .15129 | .14024 | .13017 | .12099 | .11261 |
| 23 | .15634 | .14508 | .13481 | .12544 | .11687 |
| 24 | .16159 | .15013 | .13967 | .13009 | .12133 |
| 25 | .16709 | .15543 | .14477 | .13500 | .12604 |
| 26 | .17286 | .16101 | .15014 | .14018 | .13103 |
| 27 | .17891 | .16686 | .15580 | .14564 | .13630 |
| 28 | .18525 | .17301 | .16175 | .15140 | .14187 |
| 29 | .19183 | .17940 | .16796 | .15742 | .14770 |
| 30 | .19867 | .18606 | .17443 | .16370 | .15380 |
| 31 | .20574 | .19295 | .18114 | .17023 | .16013 |
| 32 | .21307 | .20010 | .18811 | .17702 | .16674 |
| 33 | .22064 | .20751 | .19535 | .18407 | .17362 |
| 34 | .22846 | .21516 | .20283 | .19138 | .18075 |
| 35 | .23653 | .22307 | .21058 | .19896 | .18816 |
| 36 | .24484 | .23124 | .21859 | .20681 | .19584 |
| 37 | .25340 | .23966 | .22685 | .21492 | .20379 |
| 38 | .26219 | .24831 | .23536 | .22328 | .21199 |
| 39 | .27120 | .25720 | .24411 | .23188 | .22044 |
| 40 | .28045 | .26633 | .25311 | .24075 | .22916 |
| 41 | .28992 | .27569 | .26236 | .24986 | .23814 |
| 42 | .29965 | .28532 | .27188 | .25926 | .24741 |
| 43 | .30960 | .29518 | .28163 | .26890 | .25693 |
| 44 | .31977 | .30527 | .29164 | .27880 | .26671 |
| 45 | .33013 | .31557 | .30185 | .28892 | .27673 |
| 46 | .34071 | .32609 | .31230 | .29929 | .28700 |
| 47 | .35148 | .33681 | .32296 | .30988 | .29750 |
| 48 | .36246 | .34777 | .33387 | .32072 | .30826 |
| 49 | .37364 | .35893 | .34499 | .33179 | .31927 |
| 50 | .38503 | .37030 | .35634 | .34310 | .33053 |
| 51 | .39659 | .38187 | .36790 | .35462 | .34201 |
| 52 | .40832 | .39362 | .37965 | .36636 | .35371 |
| 53 | .42021 | .40554 | .39158 | .37829 | .36562 |
| 54 | .43222 | .41760 | .40367 | .39039 | .37771 |
| 55 | .44436 | .42980 | .41591 | .40264 | .38997 |
| 56 | .45660 | .44212 | .42828 | .41504 | .40239 |
| 57 | .46897 | .45456 | .44079 | .42760 | .41498 |
| 58 | .48142 | .46712 | .45342 | .44030 | .42771 |
| 59 | .49399 | .47980 | .46620 | .45314 | .44062 |
| 60 | .50666 | .49260 | .47910 | .46613 | .45367 |
| 61 | .51944 | .50552 | .49214 | .47927 | .46690 |
| 62 | .53232 | .51856 | .50531 | .49256 | .48028 |
| 63 | .54529 | .53169 | .51860 | .50598 | .49381 |
| 64 | .55832 | .54491 | .53198 | .51950 | .50746 |
| 65 | .57140 | .55819 | .54544 | .53312 | .52121 |
| 66 | .58451 | .57152 | .55895 | .54681 | .53506 |
| 67 | .59763 | .58486 | .57251 | .56054 | .54896 |
| 68 | .61076 | .59823 | .58609 | .57432 | .56292 |
| 69 | .62390 | .61162 | .59971 | .58816 | .57695 |
| 70 | .63705 | .62503 | .61337 | .60204 | .59104 |
| 71 | .65023 | .63849 | .62709 | .61600 | .60522 |
| 72 | .66344 | .65199 | .64086 | .63003 | .61949 |
| 73 | .67661 | .66547 | .65463 | .64407 | .63378 |
| 74 | .68964 | .67882 | .66827 | .65798 | .64796 |
| 75 | .70243 | .69193 | .68168 | .67168 | .66192 |
| 76 | .71495 | .70477 | .69482 | .68511 | .67563 |
| 77 | .72717 | .71731 | .70768 | .69826 | .68905 |
| 78 | .73912 | .72959 | .72026 | .71114 | .70221 |
| 79 | .75083 | .74163 | .73262 | .72379 | .71515 |
| 80 | .76235 | .75348 | .74479 | .73627 | .72792 |
| 81 | .77360 | .76506 | .75669 | .74848 | .74043 |
| 82 | .78452 | .77632 | .76827 | .76036 | .75260 |
| 83 | .79513 | .78725 | .77952 | .77192 | .76446 |
| 84 | .80547 | .79792 | .79051 | .78322 | .77606 |
| 85 | .81557 | .80836 | .80126 | .79429 | .78742 |
| 86 | .82524 | .81835 | .81157 | .80489 | .79832 |
| 87 | .83423 | .82764 | .82115 | .81477 | .80847 |
| 88 | .84253 | .83623 | .83002 | .82390 | .81787 |
| 89 | .85033 | .84430 | .83836 | .83250 | .82672 |
| 90 | .85784 | .85208 | .84639 | .84079 | .83525 |
| 91 | .86502 | .85951 | .85408 | .84871 | .84342 |
| 92 | .87164 | .86638 | .86118 | .85605 | .85098 |
| 93 | .87761 | .87257 | .86759 | .86267 | .85781 |
| 94 | .88290 | .87806 | .87327 | .86854 | .86386 |
| 95 | .88750 | .88282 | .87820 | .87364 | .86913 |
| 96 | .89136 | .88683 | .88236 | .87793 | .87355 |
| 97 | .89481 | .89041 | .88606 | .88176 | .87750 |
| 98 | .89783 | .89354 | .88930 | .88511 | .88096 |
| 99 | .90067 | .89649 | .89235 | .88826 | .88420 |
| 100 | .90349 | .89941 | .89538 | .89138 | .88743 |
| 101 | .90600 | .90202 | .89807 | .89416 | .89029 |
| 102 | .90873 | .90484 | .90099 | .89717 | .89339 |
| 103 | .91217 | .90841 | .90468 | .90099 | .99733 |
| 104 | .91553 | .91188 | .90827 | .90469 | .90114 |
| 105 | .92047 | .91701 | .91358 | .91018 | .90680 |
| 106 | .92819 | .92504 | .92191 | .91880 | .91571 |
| 107 | .93868 | .93596 | .93325 | .93056 | .92788 |
| 108 | .95471 | .95267 | .95064 | .94862 | .94661 |
| 109 | .97985 | .97893 | .97801 | .97710 | .97619 |
Table G
Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
| (1) Age | (2) Yearly rate of return | ||||
|---|---|---|---|---|---|
| 5.2% | 5.4% | 5.6% | 5.8% | 6.0% | |
| 0 | .06126 | .05759 | .05433 | .05143 | .04884 |
| 1 | .04480 | .04096 | .03754 | .03450 | .03179 |
| 2 | .04591 | .04194 | .03841 | .03527 | .03246 |
| 3 | .04745 | .04336 | .03972 | .03646 | .03355 |
| 4 | .04924 | .04502 | .04125 | .03789 | .03487 |
| 5 | .05124 | .04689 | .04300 | .03952 | .03639 |
| 6 | .05342 | .04893 | .04492 | .04131 | .03808 |
| 7 | .05574 | .05112 | .04697 | .04324 | .03990 |
| 8 | .05822 | .05346 | .04918 | .04533 | .04186 |
| 9 | .06089 | .05598 | .05156 | .04759 | .04400 |
| 10 | .06372 | .05866 | .05411 | .05000 | .04630 |
| 11 | .06673 | .06153 | .05684 | .05260 | .04877 |
| 12 | .06992 | .06457 | .05973 | .05536 | .05141 |
| 13 | .07322 | .06772 | .06274 | .05824 | .05415 |
| 14 | .07659 | .07093 | .06581 | .06117 | .05695 |
| 15 | .07998 | .07417 | .06890 | .06411 | .05976 |
| 16 | .08337 | .07739 | .07197 | .06704 | .06255 |
| 17 | .08675 | .08062 | .07504 | .06996 | .06533 |
| 18 | .09018 | .08387 | .07813 | .07290 | .06813 |
| 19 | .09367 | .08720 | .08130 | .07591 | .07099 |
| 20 | .09730 | .09065 | .08458 | .07904 | .07397 |
| 21 | .10106 | .09423 | .08800 | .08229 | .07707 |
| 22 | .10496 | .09796 | .09155 | .08568 | .08030 |
| 23 | .10903 | .10185 | .09526 | .08923 | .08368 |
| 24 | .11330 | .10594 | .09918 | .09297 | .08726 |
| 25 | .11782 | .11028 | .10334 | .09696 | .09108 |
| 26 | .12262 | .11489 | .10778 | .10122 | .09518 |
| 27 | .12771 | .11979 | .11249 | .10576 | .09955 |
| 28 | .13309 | .12499 | .11751 | .11060 | .10421 |
| 29 | .13873 | .13044 | .12278 | .11570 | .10914 |
| 30 | .14464 | .13617 | .12833 | .12107 | .11433 |
| 31 | .15079 | .14214 | .13412 | .12668 | .11977 |
| 32 | .15722 | .14838 | .14018 | .13256 | .12548 |
| 33 | .16391 | .15490 | .14652 | .13873 | .13147 |
| 34 | .17087 | .16168 | .15312 | .14515 | .13772 |
| 35 | .17811 | .16874 | .16001 | .15186 | .14426 |
| 36 | .18562 | .17608 | .16717 | .15886 | .15108 |
| 37 | .19340 | .18369 | .17462 | .16613 | .15819 |
| 38 | .20144 | .19157 | .18233 | .17368 | .16557 |
| 39 | .20974 | .19971 | .19031 | .18149 | .17322 |
| 40 | .21830 | .20812 | .19856 | .18959 | .18115 |
| 41 | .22714 | .21681 | .20710 | .19797 | .18938 |
| 42 | .23627 | .22579 | .21594 | .20665 | .19791 |
| 43 | .24566 | .23505 | .22505 | .21562 | .20673 |
| 44 | .25532 | .24458 | .23445 | .22488 | .21585 |
| 45 | .26522 | .25436 | .24410 | .23440 | .22523 |
| 46 | .27538 | .26441 | .25402 | .24420 | .23490 |
| 47 | .28579 | .27471 | .26421 | .25427 | .24484 |
| 48 | .29647 | .28529 | .27469 | .26463 | .25508 |
| 49 | .30739 | .29613 | .28543 | .27527 | .26562 |
| 50 | .31859 | .30724 | .29646 | .28620 | .27645 |
| 51 | .33001 | .31860 | .30774 | .29740 | .28755 |
| 52 | .34167 | .33020 | .31928 | .30886 | .29893 |
| 53 | .35355 | .34204 | .33105 | .32057 | .31056 |
| 54 | .36562 | .35407 | .34304 | .33250 | .32243 |
| 55 | .37787 | .36630 | .35523 | .34465 | .33452 |
| 56 | .39029 | .37870 | .36761 | .35699 | .34682 |
| 57 | .40289 | .39130 | .38020 | .36956 | .35935 |
| 58 | .41565 | .40408 | .39297 | .38231 | .37208 |
| 59 | .42859 | .41704 | .40595 | .39529 | .38504 |
| 60 | .44170 | .43019 | .41912 | .40847 | .39822 |
| 61 | .45499 | .44353 | .43250 | .42187 | .41164 |
| 62 | .46845 | .45706 | .44607 | .43548 | .42527 |
| 63 | .48208 | .47076 | .45984 | .44930 | .43913 |
| 64 | .49583 | .48461 | .47377 | .46329 | .45317 |
| 65 | .50971 | .49859 | .48784 | .47744 | .46738 |
| 66 | .52369 | .51269 | .50204 | .49173 | .48175 |
| 67 | .53774 | .52688 | .51635 | .50614 | .49625 |
| 68 | .55187 | .54115 | .53075 | .52066 | .51088 |
| 69 | .56607 | .55551 | .54526 | .53530 | .52563 |
| 70 | .58035 | .56997 | .55987 | .55006 | .54053 |
| 71 | .59474 | .58455 | .57463 | .56498 | .55559 |
| 72 | .60923 | .59924 | .58952 | .58004 | .57082 |
| 73 | .62375 | .61398 | .60446 | .59518 | .58613 |
| 74 | .63818 | .62864 | .61933 | .61026 | .60140 |
| 75 | .65240 | .64310 | .63402 | .62515 | .61649 |
| 76 | .66636 | .65731 | .64846 | .63981 | .63135 |
| 77 | .68005 | .67124 | .66263 | .65420 | .64596 |
| 78 | .69347 | .68492 | .67655 | .66836 | .66033 |
| 79 | .70669 | .69840 | .69028 | .68232 | .67452 |
| 80 | .71973 | .71171 | .70384 | .69613 | .68856 |
| 81 | .73252 | .72477 | .71717 | .70970 | .70237 |
| 82 | .74499 | .73751 | .73016 | .72295 | .71587 |
| 83 | .75713 | .74992 | .74284 | .73589 | .72905 |
| 84 | .76901 | .76208 | .75527 | .74857 | .74198 |
| 85 | .78067 | .77402 | .76748 | .76104 | .75471 |
| 86 | .79185 | .78548 | .77921 | .77304 | .76695 |
| 87 | .80228 | .79617 | .79015 | .78423 | .77838 |
| 88 | .81193 | .80607 | .80029 | .79460 | .78899 |
| 89 | .82102 | .81540 | .80985 | .80438 | .79899 |
| 90 | .82979 | .82441 | .81909 | .81384 | .80867 |
| 91 | .83820 | .83304 | .82795 | .82292 | .81796 |
| 92 | .84598 | .84104 | .83616 | .83134 | .82657 |
| 93 | .85300 | .84826 | .84357 | .83894 | .83437 |
| 94 | .85924 | .85468 | .85017 | .84570 | .84130 |
| 95 | .86466 | .86025 | .85589 | .85158 | .84732 |
| 96 | .86922 | .86494 | .86071 | .85652 | .85238 |
| 97 | .87329 | .86913 | .86501 | .86093 | .85690 |
| 98 | .87685 | .87279 | .86877 | .86479 | .86085 |
| 99 | .88019 | .87622 | .87230 | .86841 | .86456 |
| 100 | .88351 | .87964 | .87580 | .87200 | .86824 |
| 101 | .88646 | .88267 | .87891 | .87519 | .87150 |
| 102 | .88965 | .88594 | .88227 | .87863 | .87503 |
| 103 | .89370 | .89011 | .88654 | .88301 | .87952 |
| 104 | .89763 | .89414 | .89068 | .88725 | .88385 |
| 105 | .90345 | .90013 | .89683 | .89356 | .89032 |
| 106 | .91265 | .90961 | .90658 | .90358 | .90060 |
| 107 | .92522 | .92258 | .91995 | .91734 | .91474 |
| 108 | .94461 | .94262 | .94063 | .93866 | .93670 |
| 109 | .97529 | .97438 | .97348 | .97259 | .97170 |
Table G
Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
| (1) Age | (2) Yearly rate of return | ||||
|---|---|---|---|---|---|
| 6.2% | 6.4% | 6.6% | 6.8% | 7.0% | |
| 0 | .04653 | .04447 | .04262 | .04095 | .03946 |
| 1 | .02937 | .02720 | .02525 | .02351 | .02194 |
| 2 | .02994 | .02769 | .02567 | .02385 | .02221 |
| 3 | .03094 | .02860 | .02650 | .02460 | .02290 |
| 4 | .03216 | .02973 | .02755 | .02558 | .92380 |
| 5 | .03359 | .03106 | .02879 | .02674 | .02488 |
| 6 | .03517 | .03255 | .03019 | .02805 | .02612 |
| 7 | .03688 | .03416 | .03171 | .02949 | .02747 |
| 8 | .03874 | .03592 | .03337 | .03106 | .02896 |
| 9 | .04077 | .03784 | .03519 | .03279 | .03061 |
| 10 | .04295 | .03992 | .03717 | .03467 | .03240 |
| 11 | .04531 | .04217 | .03931 | .03672 | .03436 |
| 12 | .04782 | .04457 | .04161 | .03892 | .02647 |
| 13 | .05045 | .04708 | .04402 | .04122 | .03868 |
| 14 | .05312 | .04964 | .04646 | .04357 | .04093 |
| 15 | .05581 | .05220 | .04891 | .04591 | .04317 |
| 16 | .05847 | .05474 | .05134 | .04822 | .04538 |
| 17 | .06111 | .05726 | .05374 | .05051 | .04756 |
| 18 | .06378 | .05979 | .05615 | .05280 | .04974 |
| 19 | .06650 | .06238 | .05861 | .05514 | .05196 |
| 20 | .06933 | .06507 | .06117 | .05758 | .05429 |
| 21 | .07228 | .06788 | .06384 | .06013 | .05671 |
| 22 | .07535 | .07081 | .06664 | .06279 | .05925 |
| 23 | .07858 | .07389 | .06958 | .06559 | .06192 |
| 24 | .08201 | .07717 | .07270 | .06858 | .06477 |
| 25 | .08567 | .08067 | .07606 | .07179 | .06785 |
| 26 | .08960 | .08444 | .07968 | .07527 | .07118 |
| 27 | .09380 | .08849 | .08357 | .07901 | .07478 |
| 28 | .09830 | .09283 | .08775 | .08304 | .07867 |
| 29 | .10306 | .09742 | .09218 | .08732 | .08280 |
| 30 | .10808 | .10228 | .09688 | .09187 | .08720 |
| 31 | .11335 | .10738 | .10182 | .09665 | .09182 |
| 32 | .11889 | .11275 | .10704 | .10170 | .09672 |
| 33 | .12471 | .11840 | .11252 | .10703 | .10189 |
| 34 | .13079 | .12432 | .11827 | .11261 | .10732 |
| 35 | .13716 | .13052 | .12431 | .11849 | .11305 |
| 36 | .14381 | .13701 | .13063 | .12465 | .11905 |
| 37 | .15075 | .14378 | .13724 | .13110 | .12534 |
| 38 | .15796 | .15083 | .14412 | .13782 | .13190 |
| 39 | .16545 | .15815 | .15129 | .14483 | .13875 |
| 40 | .17322 | .16576 | .15874 | .15212 | .14589 |
| 41 | .18129 | .17367 | .16649 | .15971 | .15332 |
| 42 | .18967 | .18190 | .17456 | .16763 | .16108 |
| 43 | .19834 | .19041 | .18293 | .17585 | .16915 |
| 44 | .20731 | .19924 | .19160 | .18437 | .17753 |
| 45 | .21655 | .20834 | .20055 | .19318 | .18619 |
| 46 | .22608 | .21773 | .20981 | .20229 | .19516 |
| 47 | .23590 | .22741 | .21935 | .21170 | .20443 |
| 48 | .24602 | .23741 | .22922 | .22144 | .21403 |
| 49 | .25644 | .24770 | .23939 | .23148 | .22394 |
| 50 | .26716 | .25831 | .24989 | .24185 | .23419 |
| 51 | .27816 | .26921 | .26068 | .25253 | .24475 |
| 52 | .28945 | .28040 | .27176 | .26351 | .25562 |
| 53 | .30100 | .29187 | .28313 | .27478 | .26679 |
| 54 | .31279 | .30357 | .29475 | .28631 | .27822 |
| 55 | .32482 | .31553 | .30663 | .29810 | .28992 |
| 56 | .33707 | .32771 | .31875 | .31014 | .30188 |
| 57 | .34955 | .34015 | .33112 | .32244 | .31411 |
| 58 | .36225 | .35280 | .34372 | .33499 | .32659 |
| 59 | .37519 | .36571 | .35659 | .34781 | .33936 |
| 60 | .38836 | .37886 | .36971 | .36089 | .35239 |
| 61 | .40177 | .39226 | .38309 | .37425 | .36572 |
| 62 | .41542 | .40591 | .39674 | .38788 | .37932 |
| 63 | .42930 | .41981 | .41064 | .40178 | .39321 |
| 64 | .44338 | .43392 | .42477 | .41591 | .40734 |
| 65 | .45765 | .44823 | .43910 | .43027 | .42171 |
| 66 | .47208 | .46271 | .45364 | .44483 | .43630 |
| 67 | .48666 | .47736 | .46834 | .45958 | .45108 |
| 68 | .50138 | .49215 | .48320 | .47450 | .46605 |
| 69 | .51624 | .50711 | .49824 | .48961 | .48122 |
| 70 | .53125 | .52223 | .51345 | .50491 | .49660 |
| 71 | .54645 | .53755 | .52889 | .52045 | .51223 |
| 72 | .56183 | .55307 | .54453 | .53621 | .52809 |
| 73 | .57731 | .56870 | .56030 | .55211 | .54412 |
| 74 | .59275 | .58431 | .57606 | .56801 | .56015 |
| 75 | .60803 | .59976 | .59168 | .58379 | .57607 |
| 76 | .62308 | .61500 | .60709 | .59936 | .59179 |
| 77 | .63789 | .63000 | .62227 | .61470 | .60730 |
| 78 | .65247 | .64477 | .63723 | .62984 | .62261 |
| 79 | .66687 | .65938 | .65203 | .64483 | .63777 |
| 80 | .68114 | .67386 | .66672 | .65971 | .65284 |
| 81 | .69518 | .68812 | .68119 | .67438 | .66770 |
| 82 | .70891 | .70207 | .69535 | .68875 | .68227 |
| 83 | .72232 | .71572 | .70922 | .70283 | .69655 |
| 84 | .73550 | .72913 | .72285 | .71668 | .71061 |
| 85 | .74847 | .74234 | .73630 | .73035 | .72449 |
| 86 | .76096 | .75506 | .74925 | .74353 | .73789 |
| 87 | .77263 | .76696 | .76137 | .75585 | .75042 |
| 88 | .78345 | .77799 | .77261 | .76730 | .76207 |
| 89 | .79367 | .78842 | .78323 | .77812 | .77308 |
| 90 | .80356 | .79851 | .79353 | .78862 | .78376 |
| 91 | .81306 | .80821 | .80344 | .79871 | .79405 |
| 92 | .82187 | .81722 | .81263 | .80810 | .80361 |
| 93 | .82984 | .82538 | .82096 | .81659 | .81228 |
| 94 | .83694 | .83263 | .82837 | .82416 | .81999 |
| 95 | .84310 | .83893 | .83481 | .83073 | .82670 |
| 96 | .84829 | .84424 | .84023 | .83626 | .83234 |
| 97 | .85291 | .84897 | .84506 | .84120 | .83738 |
| 98 | .85696 | .85310 | .84929 | .84551 | .84177 |
| 99 | .86075 | .85698 | .85325 | .84956 | .84590 |
| 100 | .86452 | .86084 | .85719 | .85357 | .85000 |
| 101 | .86785 | .86424 | .86066 | .85711 | .85360 |
| 102 | .87146 | .86792 | .86442 | .86094 | .85750 |
| 103 | .87605 | .87261 | .86921 | .86583 | .86248 |
| 104 | .88047 | .87713 | .87382 | .87053 | .86727 |
| 105 | .88710 | .88390 | .88073 | .87758 | .87446 |
| 106 | .89764 | .89471 | .89179 | .88889 | .88601 |
| 107 | .91216 | .90960 | .90705 | .90451 | .90199 |
| 108 | .93474 | .93280 | .93086 | .92894 | .92702 |
| 109 | .97081 | .96992 | .96904 | .96816 | .96729 |
Table G
Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
| (1) Age | (2) Yearly rate of return | ||||
|---|---|---|---|---|---|
| 7.2% | 7.4% | 7.6% | 7.8% | 8.0% | |
| 0 | .03811 | .03689 | .03579 | .03479 | .03388 |
| 1 | .02052 | .01924 | .01809 | .01704 | .01609 |
| 2 | .02074 | .01940 | .01819 | .01710 | .01611 |
| 3 | .02136 | .01996 | .01870 | .01756 | .01652 |
| 4 | .02219 | .02074 | .01942 | .01822 | .01713 |
| 5 | .02321 | .02169 | .02031 | .01905 | .01791 |
| 6 | .02437 | .02278 | .02134 | .02003 | .01883 |
| 7 | .02565 | .02399 | .02248 | .02111 | .01986 |
| 8 | .02706 | .02533 | .02376 | .02232 | .02101 |
| 9 | .02863 | .02682 | .02518 | .02367 | .02230 |
| 10 | .03034 | .02846 | .02674 | .02517 | .02373 |
| 11 | .03221 | .03025 | .02846 | .02682 | .02532 |
| 12 | .03424 | .03219 | .03032 | .02861 | .02704 |
| 13 | .03635 | .03422 | .03228 | .03049 | .02885 |
| 14 | .03851 | .03630 | .03427 | .03240 | .03069 |
| 15 | .04066 | .03836 | .03624 | .03430 | .03252 |
| 16 | .04277 | .04037 | .03817 | .03615 | .03429 |
| 17 | .04485 | .04236 | .04007 | .03796 | .03602 |
| 18 | .04693 | .04434 | .04196 | .03976 | .03773 |
| 19 | .04904 | .04635 | .04387 | .04159 | .03947 |
| 20 | .05125 | .04845 | .04588 | .04349 | .04129 |
| 21 | .05356 | .05065 | .04797 | .04549 | .04319 |
| 22 | .05597 | .05295 | .05016 | .04758 | .04519 |
| 23 | .05853 | .05539 | .05248 | .04979 | .04730 |
| 24 | .06124 | .05799 | .05497 | .05217 | .04957 |
| 25 | .06420 | .06081 | .05767 | .05475 | .05205 |
| 26 | .06739 | .06388 | .06062 | .05758 | .05476 |
| 27 | .07086 | .06721 | .06382 | .06067 | .05773 |
| 28 | .07460 | .07082 | .06730 | .06402 | .06097 |
| 29 | .07859 | .07467 | .07102 | .06762 | .06444 |
| 30 | .08284 | .07879 | .07500 | .07146 | .06815 |
| 31 | .08733 | .08312 | .07920 | .07553 | .07209 |
| 32 | .09207 | .08773 | .08366 | .07986 | .07629 |
| 33 | .09709 | .09260 | .08839 | .08445 | .08075 |
| 34 | .10237 | .09773 | .09338 | .08929 | .08546 |
| 35 | .10794 | .10315 | .09865 | .09442 | .09045 |
| 36 | .11379 | .10884 | .10420 | .09983 | .09572 |
| 37 | .11992 | .11483 | .11003 | .10552 | .10126 |
| 38 | .12633 | .12108 | .11614 | .11148 | .10708 |
| 39 | .13302 | .12762 | .12253 | .11772 | .11318 |
| 40 | .14000 | .13445 | .12921 | .12425 | .11957 |
| 41 | .14728 | .14158 | .13619 | .13109 | .12626 |
| 42 | .15490 | .14904 | .14350 | .13825 | .13328 |
| 43 | .16260 | .15680 | .15111 | .145072 | .14060 |
| 44 | 17104 | .16488 | .15905 | .15351 | .14825 |
| 45 | .17955 | .17326 | .16727 | .16159 | .15619 |
| 46 | .18838 | .18194 | .17582 | .16999 | .16445 |
| 47 | .19751 | .19093 | .18467 | .17870 | .17302 |
| 48 | .20698 | .20026 | .19386 | .18776 | .18194 |
| 49 | .21676 | .20991 | .20338 | .19715 | .19119 |
| 50 | .22689 | .21991 | .21325 | .20689 | .20080 |
| 51 | .23732 | .23023 | .22344 | .21695 | .21074 |
| 52 | .24808 | .24086 | .23396 | .22735 | .22102 |
| 53 | .25914 | .25181 | .24479 | .23807 | .24252 |
| 54 | .27047 | .26304 | .25591 | .24908 | .25372 |
| 55 | .28208 | .27455 | .26733 | .26039 | .25372 |
| 56 | .29395 | .28633 | .37901 | .27197 | .26521 |
| 57 | .30610 | .29840 | .29099 | .28386 | .27700 |
| 58 | .31851 | .31074 | .30325 | .29604 | .28909 |
| 59 | .33122 | .32337 | .31581 | .30853 | .30150 |
| 60 | .34420 | .33630 | .32867 | .32132 | .31422 |
| 61 | .35748 | .34953 | .34185 | .33444 | .32727 |
| 62 | .37106 | .36307 | .35535 | .34788 | .34066 |
| 63 | .38492 | .37691 | .36915 | .36165 | .35438 |
| 64 | .39905 | .39102 | .38324 | .37571 | .36841 |
| 65 | .41342 | .40539 | .39760 | .39005 | .38272 |
| 66 | .42803 | .42000 | .41221 | .40465 | .39731 |
| 67 | .44283 | .43483 | .42705 | .41949 | .41215 |
| 68 | .45784 | .44987 | .44211 | .43457 | .42724 |
| 69 | .47307 | .46513 | .45741 | .44990 | .44254 |
| 70 | .48851 | .48063 | .47296 | .46549 | .45821 |
| 71 | .50422 | .49641 | .48880 | .48139 | .47416 |
| 72 | .52018 | .51246 | .50493 | .49758 | .49042 |
| 73 | .53631 | .52870 | .52126 | .51400 | .50691 |
| 74 | .55247 | .54497 | .53764 | .53048 | .52347 |
| 75 | .56852 | .56115 | .55393 | .54687 | .53997 |
| 76 | .58439 | .57714 | .57005 | .56311 | .55632 |
| 77 | .60005 | .59294 | .58599 | .57917 | .57249 |
| 78 | .61551 | .60856 | .60174 | .59506 | .58851 |
| 79 | .63084 | .62405 | .61739 | .61085 | .60443 |
| 80 | .64609 | .63946 | .63296 | .62657 | .62030 |
| 81 | .66114 | .65469 | .64835 | .64213 | .63602 |
| 82 | .67589 | .66963 | .66347 | .65742 | .65146 |
| 83 | .60937 | .68429 | .67831 | .67243 | .66664 |
| 84 | .70463 | .69875 | .69296 | .68726 | .68165 |
| 85 | .71872 | .71304 | .70745 | .70194 | .69651 |
| 86 | .73233 | .72685 | .72146 | .71614 | .71089 |
| 87 | .74507 | .73978 | .73458 | .72944 | .72438 |
| 88 | .75691 | .75181 | .74679 | .74183 | .73694 |
| 89 | .76810 | .76319 | .75834 | .75355 | .74883 |
| 90 | .77897 | .77424 | .76957 | .76496 | .76040 |
| 91 | .78945 | .78490 | .78040 | .77596 | .77158 |
| 92 | .79919 | .79481 | .79048 | .78621 | .78198 |
| 93 | .80801 | .80380 | .79963 | .79550 | .79143 |
| 94 | .81587 | .81180 | .80777 | .80379 | .79985 |
| 95 | .82271 | .81877 | .81487 | .81100 | .80719 |
| 96 | .82846 | .82462 | .82083 | .81707 | .81335 |
| 97 | .83360 | .82985 | .82615 | .82248 | .81885 |
| 98 | .33808 | .83441 | .83079 | .82720 | .82365 |
| 99 | .84228 | .83869 | .83514 | .83163 | .82815 |
| 100 | .84645 | .84294 | .83947 | .83603 | .83262 |
| 101 | .85012 | .84668 | .84327 | .83988 | .83653 |
| 102 | .85409 | .85072 | .84737 | .84405 | .84077 |
| 103 | .85917 | .85588 | .85262 | .84939 | .84619 |
| 104 | .86403 | .86083 | .85765 | .85449 | .85136 |
| 105 | .87136 | .86829 | .86524 | .86221 | .85921 |
| 106 | .88315 | .88032 | .87750 | .87470 | .87192 |
| 107 | .89949 | .89700 | .89452 | .89206 | .88961 |
| 108 | .92511 | .92321 | .92132 | .91944 | .91757 |
| 109 | .96642 | .96555 | .96468 | .96382 | .96296 |
Table G
Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
| (1) Age | (2) Yearly rate of return | ||||
|---|---|---|---|---|---|
| 8.2% | 8.4% | 8.6% | 8.8% | 9.0% | |
| 0 | .03305 | .03230 | .03161 | .03098 | .03040 |
| 1 | .01523 | .01444 | .01372 | .01307 | .01247 |
| 2 | .01520 | .01438 | .01362 | .01294 | .01230 |
| 3 | .01557 | .01470 | .01391 | .01319 | .01253 |
| 4 | .01613 | .01522 | .01439 | .01363 | .01294 |
| 5 | .01687 | .01591 | .01504 | .01424 | .01351 |
| 6 | .01774 | .01674 | .01582 | .01498 | .01421 |
| 7 | .01871 | .01766 | .01670 | .01581 | .01500 |
| 8 | .01980 | .01870 | .01769 | .01676 | .01591 |
| 9 | .02104 | .01989 | .01883 | .01785 | .01695 |
| 10 | .02241 | .02120 | .02009 | .01906 | .01812 |
| 11 | .02394 | .02267 | .02150 | .02042 | .01943 |
| 12 | .02560 | .02427 | .02305 | .02192 | .02088 |
| 13 | .02734 | .02595 | .02467 | .02349 | .02240 |
| 14 | .02912 | .02766 | .02632 | .02509 | .02394 |
| 15 | .03087 | .02935 | .02795 | .02666 | .02546 |
| 16 | .03257 | .03099 | .02952 | .02817 | .02691 |
| 17 | .03423 | .03257 | .03104 | .02962 | .02831 |
| 18 | .03586 | .03414 | .03253 | .03105 | .02967 |
| 19 | .03752 | .03572 | .03404 | .03249 | .03105 |
| 20 | .03925 | .03737 | .03562 | .03399 | .03248 |
| 21 | .04107 | .03910 | .03727 | .03557 | .03398 |
| 22 | .04297 | .04091 | .03899 | .03722 | .03556 |
| 23 | .04498 | .04283 | .04083 | .03897 | .03723 |
| 24 | .04715 | .04491 | .04282 | .04087 | .03905 |
| 25 | .04953 | .04718 | .04499 | .04295 | .04105 |
| 26 | .05213 | .04968 | .04740 | .04527 | .04327 |
| 27 | .05499 | .05243 | .05005 | .04782 | .04573 |
| 28 | .05811 | .05545 | .05295 | .05062 | .04844 |
| 29 | .06146 | .05868 | .05608 | .05365 | .05136 |
| 30 | .06506 | .06217 | .05945 | .05691 | .05452 |
| 31 | .06888 | .06586 | .06303 | .06038 | .05789 |
| 32 | .07295 | .06981 | .06687 | .06410 | .06149 |
| 33 | .07728 | .07401 | .07095 | .06806 | .06535 |
| 34 | .08185 | .07846 | .07527 | .07227 | .06944 |
| 35 | .08671 | .08319 | .07988 | .07675 | .07380 |
| 36 | .09184 | .08819 | .08475 | .08150 | .07843 |
| 37 | .09725 | .09347 | .08989 | .08652 | .08332 |
| 38 | .10293 | .09901 | .09531 | .09180 | .08848 |
| 39 | .10889 | .10483 | .10099 | .09736 | .09391 |
| 40 | .11514 | .11094 | .10697 | .10320 | .09963 |
| 41 | .12168 | .11735 | .11324 | .10934 | .10564 |
| 42 | .12856 | .12409 | .11984 | .11581 | .11197 |
| 43 | .13574 | .13113 | .12675 | .12258 | .11862 |
| 44 | .14325 | .13850 | .13398 | .12967 | .12558 |
| 45 | .15105 | .14616 | .14150 | .13706 | .13283 |
| 46 | .15917 | .15414 | .14935 | .14478 | .14041 |
| 47 | .16760 | .16244 | .15751 | .15280 | .14831 |
| 48 | .17639 | .17109 | .16602 | .16119 | .15656 |
| 49 | .18551 | .18007 | .17488 | .16991 | .16516 |
| 50 | .19499 | .18942 | .18410 | .17900 | .17412 |
| 51 | .20480 | .19911 | .19366 | .18844 | .18343 |
| 52 | .21495 | .20914 | .20357 | .19822 | .19309 |
| 53 | .22544 | .21951 | .21381 | .20835 | .20309 |
| 54 | .23622 | .23018 | .22437 | .21878 | .21341 |
| 55 | .24732 | .24116 | .23524 | .22954 | .22406 |
| 56 | .25870 | .25244 | .24641 | .24060 | .23501 |
| 57 | .27040 | .26404 | .25791 | .25200 | .24630 |
| 58 | .28239 | .27594 | .26971 | .26370 | .25791 |
| 59 | .29472 | .28817 | .28186 | .27576 | .26987 |
| 60 | .30736 | .30074 | .29434 | .28816 | .28218 |
| 61 | .32035 | .31365 | .30718 | .30092 | .29486 |
| 62 | .33368 | .32692 | .32038 | .31405 | .30791 |
| 63 | .34735 | .34054 | .33394 | .32754 | .32134 |
| 64 | .36133 | .35448 | .34783 | .34138 | .33512 |
| 65 | .37562 | .36873 | .36204 | .35554 | .34924 |
| 66 | .39019 | .38327 | .37655 | .37002 | .36367 |
| 67 | .40502 | .39809 | .39134 | .38479 | .37841 |
| 68 | .42011 | .41317 | .40642 | .39985 | .39345 |
| 69 | .43547 | .42854 | .42179 | .41522 | .40882 |
| 70 | .45112 | .44421 | .43748 | .43091 | .42451 |
| 71 | .46711 | .46023 | .45352 | .44698 | .44059 |
| 72 | .48342 | .47659 | .46992 | .46341 | .45705 |
| 73 | .49998 | .49321 | .48660 | .48014 | .47382 |
| 74 | .51663 | .50994 | .50339 | .49699 | .49073 |
| 75 | .53322 | .52661 | .52014 | .51381 | .50762 |
| 76 | .54967 | .54315 | .53678 | .53053 | .52440 |
| 77 | .56595 | .55954 | .55326 | .54710 | .54106 |
| 78 | .58209 | .57579 | .56961 | .56355 | .55761 |
| 79 | .59814 | .59196 | .58590 | .57995 | .57410 |
| 80 | .61415 | .60810 | .60217 | .59633 | .59060 |
| 81 | .63001 | .62410 | .61830 | .61260 | .60699 |
| 82 | .64561 | .63985 | .63419 | .62862 | .62314 |
| 83 | .66095 | .65535 | .64983 | .64441 | .63907 |
| 84 | .67612 | .67068 | .66533 | .66005 | .65486 |
| 85 | .69116 | .68589 | .68070 | .67559 | .67055 |
| 86 | .70573 | .70063 | .69561 | .69066 | .68578 |
| 87 | .71939 | .71446 | .70961 | .70481 | .70009 |
| 88 | .73211 | .72735 | .72265 | .71801 | .71343 |
| 89 | .74417 | .73956 | .73501 | .73053 | .72609 |
| 90 | .75590 | .75146 | .74707 | .74273 | .73845 |
| 91 | .76724 | .76296 | .75873 | .75454 | .75041 |
| 92 | .77781 | .77368 | .76960 | .76556 | .76158 |
| 93 | .78740 | .78342 | .77948 | .77558 | .77173 |
| 94 | .79596 | .79210 | .78829 | .78452 | .78079 |
| 95 | .80341 | .79967 | .79597 | .79231 | .78869 |
| 96 | .80967 | .80603 | .80242 | .79885 | .79532 |
| 97 | .81526 | .81170 | .80818 | .80470 | .80125 |
| 98 | .82013 | .81665 | .81320 | .80979 | .80641 |
| 99 | .82470 | .82129 | .81791 | .81456 | .81125 |
| 100 | .82924 | .82590 | .82258 | .81930 | .81605 |
| 101 | .83322 | .82993 | .82667 | .82344 | .82024 |
| 102 | .83751 | .83428 | .83108 | .82791 | .82477 |
| 103 | .84301 | .83986 | .83674 | .83365 | .83058 |
| 104 | .84826 | .84518 | .84213 | .83910 | .83610 |
| 105 | .85623 | .85327 | .85033 | .84741 | .84452 |
| 106 | .86915 | .86641 | .86369 | .86098 | .85829 |
| 107 | .88718 | .88476 | .88236 | .87997 | .87759 |
| 108 | .91571 | .91385 | .91201 | .91017 | .90834 |
| 109 | .96211 | .96125 | .96041 | .95956 | .95872 |
Table G
Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
| (1) Age | (2) Yearly rate of return | ||||
|---|---|---|---|---|---|
| 9.2% | 9.4% | 9.6% | 9.8% | 10.0% | |
| 0 | .02987 | .02938 | .02893 | .02851 | .02812 |
| 1 | .01192 | .01141 | .01094 | .01051 | .01012 |
| 2 | .01173 | .01119 | .01070 | .01025 | .00983 |
| 3 | .01192 | .01136 | .01084 | .01036 | .00992 |
| 4 | .01229 | .01170 | .01116 | .01066 | .01019 |
| 5 | .01283 | .01221 | .01164 | .01111 | .01062 |
| 6 | .01350 | .01284 | .01224 | .01168 | .01116 |
| 7 | .01425 | .01356 | .01292 | .01233 | .01178 |
| 8 | .01512 | .01439 | .01372 | .01309 | .01252 |
| 9 | .01612 | .01535 | .01464 | .01398 | .01337 |
| 10 | .01724 | .01644 | .01569 | .01499 | .01435 |
| 11 | .01851 | .01766 | .01688 | .01615 | .01547 |
| 12 | .01991 | .01902 | .01819 | .01742 | .01671 |
| 13 | .02139 | .02045 | .01958 | .01877 | .01802 |
| 14 | .02288 | .02190 | .02098 | .02013 | .01934 |
| 15 | .02435 | .02331 | .02235 | .02146 | .02063 |
| 16 | .02575 | .02466 | .02366 | .02272 | .02185 |
| 17 | .02709 | .02595 | .02490 | .02391 | .02300 |
| 18 | .02839 | .02721 | .02610 | .02507 | .02410 |
| 19 | .02971 | .02846 | .02730 | .02621 | .02520 |
| 20 | .03108 | .02977 | .02855 | .02741 | .02635 |
| 21 | .03251 | .03114 | .02986 | .02866 | .02755 |
| 22 | .03402 | .03258 | .03123 | .02998 | .02880 |
| 23 | .03562 | .03410 | .03269 | .03137 | .03014 |
| 24 | .03735 | .03577 | .03428 | .03290 | .03159 |
| 25 | .03927 | .03761 | .03605 | .03459 | .03322 |
| 26 | .04141 | .03966 | .03803 | .03649 | .03505 |
| 27 | .04377 | .04194 | .04023 | .03861 | .03710 |
| 28 | .04639 | .04447 | .04267 | .04098 | .03938 |
| 29 | .04922 | .04721 | .04532 | .04354 | .04187 |
| 30 | .05228 | .05017 | .04819 | .04633 | .04457 |
| 31 | .05554 | .05334 | .05126 | .04930 | .04746 |
| 32 | .05904 | .05674 | .05456 | .05251 | .05058 |
| 33 | .06279 | .06038 | .05810 | .05595 | .05392 |
| 34 | .06677 | .06435 | .06187 | .05962 | .05750 |
| 35 | .07102 | .06839 | .06590 | .06355 | .06132 |
| 36 | .07553 | .07278 | .07019 | .06773 | .06540 |
| 37 | .08030 | .07745 | .07474 | .07217 | .06974 |
| 38 | .08534 | .08237 | .07955 | .07687 | .07433 |
| 39 | .09065 | .08755 | .08462 | .08182 | .07917 |
| 40 | .09624 | .09302 | .08996 | .08706 | .08429 |
| 41 | .10212 | .09878 | .09560 | .09258 | .08970 |
| 42 | .10833 | .10486 | .10156 | .09842 | .09543 |
| 43 | .11484 | .11125 | .10783 | .10456 | .10145 |
| 44 | .12167 | .11795 | .11441 | .11102 | .10779 |
| 45 | .12880 | .12495 | .12128 | .11777 | .11442 |
| 46 | .13625 | .13227 | .12847 | .12484 | .12137 |
| 47 | .14402 | .13991 | .13599 | .13223 | .12863 |
| 48 | .15214 | .14791 | .14385 | .13997 | .13626 |
| 49 | .16060 | .15625 | .15207 | .14806 | .14422 |
| 50 | .16944 | .16496 | .16065 | .15653 | .15257 |
| 51 | .17862 | .17401 | .16959 | .16534 | .16126 |
| 52 | .18816 | .18343 | .17888 | .17451 | .17031 |
| 53 | .19805 | .19320 | .18853 | .18404 | .17972 |
| 54 | .20825 | .20328 | .19850 | .19390 | .18946 |
| 55 | .21878 | .21370 | .20881 | .20409 | .19954 |
| 56 | .22963 | .22443 | .21943 | .21460 | .20994 |
| 57 | .24081 | .23551 | .23040 | .22546 | .22069 |
| 58 | .25231 | .24691 | .24170 | .23665 | .23178 |
| 59 | .26418 | .25868 | .25336 | .24822 | .24325 |
| 60 | .27640 | .27081 | .26540 | .26016 | .25509 |
| 61 | .28899 | .28332 | .27782 | .27249 | .26733 |
| 62 | .30197 | .29622 | .29064 | .28523 | .27998 |
| 63 | .31533 | .30950 | .30385 | .29836 | .29304 |
| 64 | .32905 | .32316 | .31743 | .31188 | .30648 |
| 65 | .34311 | .33716 | .33138 | .32576 | .32030 |
| 66 | .35751 | .35151 | .34568 | .34001 | .33449 |
| 67 | .37221 | .36618 | .36030 | .35459 | .34902 |
| 68 | .38723 | .38116 | .37526 | .36950 | .36390 |
| 69 | .40257 | .39649 | .39056 | .38478 | .37914 |
| 70 | .41826 | .41217 | .40623 | .40043 | .39478 |
| 71 | .43435 | .42827 | .42233 | .41652 | .41086 |
| 72 | .45084 | .44478 | .43885 | .43305 | .42739 |
| 73 | .46765 | .46161 | .45571 | .44994 | .44429 |
| 74 | .48460 | .47861 | .47274 | .46700 | .46138 |
| 75 | .50155 | .49561 | .48979 | .48409 | .47851 |
| 76 | .51841 | .51253 | .50677 | .50112 | .49559 |
| 77 | .53514 | .52934 | .52364 | .51806 | .51258 |
| 78 | .55177 | .54605 | .54043 | .53492 | .52951 |
| 79 | .56837 | .56273 | .55720 | .55177 | .54643 |
| 80 | .58497 | .57944 | .57401 | .56866 | .56341 |
| 81 | .60148 | .59606 | .59073 | .58548 | .58033 |
| 82 | .61775 | .61245 | .60723 | .60210 | .59705 |
| 83 | .63381 | .62863 | .62354 | .61852 | .61358 |
| 84 | .64974 | .64470 | .63973 | .63484 | .63002 |
| 85 | .66558 | .66068 | .65586 | .65110 | .64641 |
| 86 | .68096 | .67622 | .67154 | .66692 | .66236 |
| 87 | .69542 | .69082 | .68628 | .68180 | .67738 |
| 88 | .70891 | .70445 | .70005 | .69570 | .69141 |
| 89 | .72172 | .71739 | .71312 | .70891 | .70474 |
| 90 | .73422 | .73004 | .72591 | .72182 | .71779 |
| 91 | .74632 | .74229 | .73829 | .73435 | .73045 |
| 92 | .75763 | .75373 | .74988 | .74606 | .74229 |
| 93 | .76791 | .76414 | .76042 | .75673 | .75308 |
| 94 | .77710 | .77345 | .76983 | .76626 | .76272 |
| 95 | .78510 | .78155 | .77804 | .77457 | .77113 |
| 96 | .79183 | .78837 | .78494 | .78155 | .77819 |
| 97 | .79783 | .79445 | .79110 | .78779 | .78450 |
| 98 | .80306 | .79975 | .79647 | .79322 | .79000 |
| 99 | .80797 | .80471 | .80149 | .79830 | .79514 |
| 100 | .81283 | .80964 | .80648 | .80335 | .80025 |
| 101 | .81708 | .81394 | .81082 | .80774 | .80468 |
| 102 | .82165 | .81856 | .81550 | .81247 | .80946 |
| 103 | .82754 | .82452 | .82153 | .81857 | .81563 |
| 104 | .83312 | .83017 | .82723 | .82433 | .82144 |
| 105 | .84165 | .83880 | .83597 | .83316 | .83038 |
| 106 | .85562 | .85297 | .85034 | .84772 | .84512 |
| 107 | .87523 | .87288 | .87054 | .86822 | .86591 |
| 108 | .90652 | .90471 | .90291 | .90111 | .89932 |
| 109 | .95788 | .95704 | .95620 | .95537 | .95455 |
Table G
Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
| (1) Age | (2) Yearly rate of return | ||||
|---|---|---|---|---|---|
| 10.2% | 10.4% | 10.6% | 10.8% | 11.0% | |
| 0 | .02776 | .02743 | .02712 | .02682 | .02655 |
| 1 | .00975 | .00941 | .00909 | .00880 | .00852 |
| 2 | .00945 | .00909 | .00875 | .00844 | .00816 |
| 3 | .00952 | .00914 | .00879 | .00846 | .00815 |
| 4 | .00976 | .00936 | .00899 | .00865 | .00832 |
| 5 | .01016 | .00974 | .00935 | .00898 | .00864 |
| 6 | .01068 | .01023 | .00981 | .00943 | .00907 |
| 7 | .01128 | .01080 | .01036 | .00995 | .00957 |
| 8 | .01198 | .01148 | .01101 | .01058 | .01017 |
| 9 | .01281 | .01228 | .01179 | .01133 | .01090 |
| 10 | .01375 | .01319 | .01267 | .01219 | .01173 |
| 11 | .01483 | .01425 | .01370 | .01318 | .01270 |
| 12 | .01604 | .01542 | .01484 | .01430 | .01379 |
| 13 | .01732 | .01666 | .01605 | .01548 | .01494 |
| 14 | .01860 | .01792 | .01727 | .01667 | .01610 |
| 15 | .01986 | .01913 | .01845 | .01782 | .01723 |
| 16 | .02103 | .02027 | .01956 | .01889 | .01827 |
| 17 | .02214 | .02134 | .02059 | .01989 | .01923 |
| 18 | .02320 | .02236 | .02157 | .02084 | .02014 |
| 19 | .02426 | .02337 | .02254 | .02177 | .02104 |
| 20 | .02536 | .02442 | .02355 | .02273 | .02197 |
| 21 | .02650 | .02552 | .02460 | .02374 | .02293 |
| 22 | .02770 | .02667 | .02570 | .02479 | .02394 |
| 23 | .02898 | .02789 | .02687 | .02591 | .02501 |
| 24 | .03037 | .02923 | .02815 | .02714 | .02619 |
| 25 | .03194 | .03073 | .02960 | .02853 | .02752 |
| 26 | .03370 | .03243 | .03123 | .03010 | .02904 |
| 27 | .03568 | .03434 | .03307 | .03188 | .03076 |
| 28 | .03789 | .03647 | .03514 | .03389 | .03271 |
| 29 | .04029 | .03880 | .03740 | .03608 | .03483 |
| 30 | .04291 | .04135 | .03987 | .03848 | .03716 |
| 31 | .04572 | .04407 | .04252 | .04105 | .03966 |
| 32 | .04875 | .04702 | .04538 | .04384 | .04237 |
| 33 | .05200 | .05019 | .04847 | .04684 | .04530 |
| 34 | .05548 | .05358 | .05177 | .05006 | .04843 |
| 35 | .05921 | .05722 | .05532 | .05352 | .05181 |
| 36 | .06319 | .06110 | .05911 | .05722 | .05543 |
| 37 | .06743 | .06524 | .06315 | .06117 | .05929 |
| 38 | .07191 | .06962 | .06744 | .06536 | .06338 |
| 39 | .07665 | .074425 | .07197 | .06980 | .06773 |
| 40 | .08166 | .07916 | .07677 | .07450 | .07233 |
| 41 | .08696 | .08434 | .08185 | .07947 | .07721 |
| 42 | .09257 | .08985 | .08725 | .08477 | .08239 |
| 43 | .09848 | .09564 | .09293 | .09034 | .08787 |
| 44 | .10470 | .10175 | .09893 | .09623 | .09365 |
| 45 | .11121 | .10815 | .10522 | .10241 | .09972 |
| 46 | .11805 | .11486 | .11182 | .10890 | .10610 |
| 47 | .12519 | .12189 | .11873 | .11569 | .11279 |
| 48 | .13269 | .12927 | .12600 | .12285 | .11983 |
| 49 | .14054 | .13600 | .13361 | .13035 | .12721 |
| 50 | .14876 | .14511 | .14160 | .13822 | .13497 |
| 51 | .15734 | .15356 | .14994 | .14645 | .14309 |
| 52 | .16627 | .16238 | .15864 | .15504 | .15156 |
| 53 | .17557 | .17156 | .16770 | .16399 | .16040 |
| 54 | .18519 | .18107 | .17710 | .17327 | .16957 |
| 55 | .19515 | .19092 | .18684 | .18290 | .17909 |
| 56 | .20544 | .20110 | .19691 | .19286 | .18894 |
| 57 | .21609 | .21164 | .20734 | .20318 | .19916 |
| 58 | .22707 | .22252 | .21811 | .21385 | .20972 |
| 59 | .23844 | .23378 | .22928 | .22491 | .22068 |
| 60 | .25018 | .24543 | .24082 | .23636 | .23203 |
| 61 | .26233 | .25749 | .25279 | .24823 | .24381 |
| 62 | .27490 | .26996 | .26517 | .26052 | .25601 |
| 63 | .28787 | .28286 | .27798 | .27325 | .26865 |
| 64 | .30124 | .29615 | .29120 | .28639 | .28171 |
| 65 | .31500 | .30983 | .30481 | .29993 | .29517 |
| 66 | .32912 | .32390 | .31881 | .31386 | .30904 |
| 67 | .34360 | .33832 | .33318 | .32817 | .32328 |
| 68 | .35843 | .35311 | .34791 | .34285 | .33791 |
| 69 | .37365 | .36828 | .36305 | .35794 | .35296 |
| 70 | .38925 | .38386 | .37860 | .37346 | .36844 |
| 71 | .40532 | .39991 | .39463 | .38946 | .38442 |
| 72 | .42185 | .41644 | .41115 | .40597 | .40091 |
| 73 | .43876 | .43336 | .42807 | .42289 | .41782 |
| 74 | .45588 | .45050 | .44522 | .44005 | .43499 |
| 75 | .47304 | .46769 | .46244 | .45729 | .45225 |
| 76 | .49016 | .48485 | .47963 | .47451 | .46949 |
| 77 | .50721 | .50193 | .49676 | .49168 | .48670 |
| 78 | .52419 | .51898 | .51385 | .50882 | .50388 |
| 79 | .54119 | .53604 | .53097 | .52600 | .52111 |
| 80 | .55825 | .55318 | .54819 | .54328 | .53846 |
| 81 | .57526 | .57027 | .56536 | .56053 | .55578 |
| 82 | .59208 | .58718 | .58236 | .57762 | .57295 |
| 83 | .60871 | .60392 | .59920 | .59455 | .58997 |
| 84 | .62527 | .62059 | .61597 | .61143 | .60695 |
| 85 | .64179 | .63723 | .63273 | .62830 | .62393 |
| 86 | .65787 | .65344 | .64907 | .64475 | .64050 |
| 87 | .67302 | .66871 | .66446 | .66026 | .65612 |
| 88 | .68717 | .68298 | .67885 | .67477 | .67074 |
| 89 | .70063 | .69656 | .69255 | .68858 | .68466 |
| 90 | .71380 | .70986 | .70597 | .70212 | .69831 |
| 91 | .72659 | .72278 | .71901 | .71528 | .71160 |
| 92 | .73856 | .73488 | .73123 | .72762 | .72405 |
| 93 | .74947 | .74590 | .74236 | .73887 | .73541 |
| 94 | .75922 | .75575 | .75233 | .74893 | .74557 |
| 95 | .76773 | .76436 | .76102 | .75772 | .75445 |
| 96 | .77487 | .77158 | .76832 | .76510 | .76190 |
| 97 | .78125 | .77803 | .77485 | .77169 | .76856 |
| 98 | .78681 | .78365 | .78052 | .77742 | .77435 |
| 99 | .79201 | .78891 | .78583 | .78279 | .77977 |
| 100 | .79717 | .79412 | .79111 | .78811 | .78515 |
| 101 | .80165 | .79865 | .79568 | .79273 | .78981 |
| 102 | .80648 | .80353 | .80060 | .79769 | .79481 |
| 103 | .81271 | .80982 | .80695 | .80411 | .80129 |
| 104 | .81858 | .81574 | .81292 | .81013 | .80736 |
| 105 | .83761 | .82487 | .82214 | .81943 | .81675 |
| 106 | .84254 | .83998 | .83743 | .83490 | .83238 |
| 107 | .86362 | .86133 | .85906 | .85681 | .85456 |
| 108 | .89755 | .89577 | .89401 | .89226 | .89051 |
| 109 | .95372 | .95290 | .95208 | .95126 | .95045 |
Table G
Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
| (1) Age | (2) Yearly rate of return | ||||
|---|---|---|---|---|---|
| 11.2% | 11.4% | 11.6% | 11.8% | 12.0% | |
| 0 | .02630 | .02606 | .02583 | .02562 | .02542 |
| 1 | .00827 | .00803 | .00780 | .00759 | .00739 |
| 2 | .00789 | .00763 | .00740 | .00718 | .00697 |
| 3 | .00787 | .00760 | .00736 | .00712 | .00690 |
| 4 | .00802 | .00774 | .00748 | .00723 | .00700 |
| 5 | .00832 | .00802 | .00774 | .00748 | .00724 |
| 6 | .00873 | .00841 | .00812 | .00784 | .00758 |
| 7 | .00921 | .00888 | .00856 | .00827 | .00799 |
| 8 | .00979 | .00944 | .00910 | .00879 | .00850 |
| 9 | .01049 | .01012 | .00976 | .00943 | .00912 |
| 10 | .01131 | .01091 | .01053 | .01018 | .00985 |
| 11 | .01225 | .01183 | .01143 | .01106 | .01070 |
| 12 | .01331 | .01286 | .01244 | .01205 | .01168 |
| 13 | .01444 | .01397 | .01352 | .01311 | .01271 |
| 14 | .01558 | .01508 | .01461 | .01417 | .01375 |
| 15 | .01667 | .01614 | .01565 | .01519 | .01475 |
| 16 | .01768 | .01713 | .01661 | .01612 | .01566 |
| 17 | .01862 | .01803 | .01749 | .01697 | .01649 |
| 18 | .01949 | .01888 | .01831 | .01776 | .01725 |
| 19 | .02035 | .01971 | .01910 | .01853 | .01799 |
| 20 | .02124 | .02056 | .01992 | .01932 | .01875 |
| 21 | .02217 | .02145 | .02078 | .02014 | .01954 |
| 22 | .02313 | .02238 | .02166 | .02099 | .02035 |
| 23 | .02416 | .02336 | .02261 | .02190 | .02122 |
| 24 | .02529 | .02445 | .02365 | .02290 | .02218 |
| 25 | .02657 | .02568 | .02484 | .02404 | .02328 |
| 26 | .02804 | .02710 | .02620 | .02536 | .02456 |
| 27 | .02970 | .02870 | .02776 | .02686 | .02601 |
| 28 | .03159 | .03053 | .02953 | .02858 | .02768 |
| 29 | .03365 | .03253 | .03147 | .03047 | .02951 |
| 30 | .03591 | .03473 | .03361 | .03255 | .03154 |
| 31 | .03834 | .03709 | .03591 | .03478 | .03372 |
| 32 | .04098 | .03966 | .03841 | .03722 | .03610 |
| 33 | .04383 | .04244 | .04112 | .03987 | .03867 |
| 34 | .04689 | .04543 | .04403 | .04271 | .04145 |
| 35 | .05019 | .04865 | .04718 | .04578 | .04445 |
| 36 | .05372 | .05210 | .05055 | .04907 | .04767 |
| 37 | .05749 | .05578 | .05416 | .05260 | .05112 |
| 38 | .06150 | .05970 | .05799 | .05636 | .05480 |
| 39 | .06575 | .06387 | .06207 | .06035 | .05871 |
| 40 | .07026 | .06828 | .06639 | .06459 | .06286 |
| 41 | .07504 | .07297 | .07099 | .06909 | .06728 |
| 42 | .08013 | .07796 | .07589 | .07390 | .07200 |
| 43 | .08550 | .08323 | .08106 | .07898 | .07699 |
| 44 | .09118 | .08881 | .08654 | .08437 | .08228 |
| 45 | .09714 | .09467 | .09230 | .09003 | .08784 |
| 46 | .10341 | .10084 | .09837 | .09599 | .09371 |
| 47 | .10999 | .10731 | .10473 | .10226 | .09988 |
| 48 | .11693 | .11414 | .11145 | .10888 | .10639 |
| 49 | .12420 | .12130 | .11852 | .11583 | .11325 |
| 50 | .13185 | .12884 | .12595 | .12316 | .12047 |
| 51 | .13985 | .13674 | .13373 | .13084 | .12805 |
| 52 | .14822 | .14499 | .14188 | .13888 | .13598 |
| 53 | .15695 | .15361 | .15039 | .14729 | .14428 |
| 54 | .16601 | .16256 | .15924 | .15602 | .15292 |
| 55 | .17542 | .17186 | .16843 | .16511 | .16190 |
| 56 | .18516 | .18150 | .17796 | .17454 | .17122 |
| 57 | .19527 | .19150 | .18786 | .18433 | .18091 |
| 58 | .20573 | .20186 | .19811 | .19448 | .19096 |
| 59 | .21659 | .21262 | .20877 | .20504 | .20142 |
| 60 | .22784 | .22377 | .21982 | .21599 | .21227 |
| 61 | .23952 | .23535 | .23131 | .22738 | .22357 |
| 62 | .25163 | .24737 | .24324 | .23922 | .23531 |
| 63 | .26418 | .25984 | .25561 | .25151 | .24751 |
| 64 | .27716 | .27273 | .26842 | .26423 | .26015 |
| 65 | .29054 | .28604 | .28165 | .27738 | .27322 |
| 66 | .30434 | .29976 | .29530 | .29096 | .28672 |
| 67 | .31852 | .31388 | .30935 | .30494 | .30063 |
| 68 | .33310 | .32840 | .32381 | .31933 | .31496 |
| 69 | .34809 | .34334 | .33870 | .33417 | .32975 |
| 70 | .36353 | .35874 | .35405 | .34948 | .34500 |
| 71 | .37948 | .37466 | .36994 | .36532 | .36081 |
| 72 | .39595 | .39111 | .38636 | .38172 | .37718 |
| 73 | .41286 | .40801 | .40325 | .39859 | .39403 |
| 74 | .43004 | .42518 | .42042 | .41575 | .41118 |
| 75 | .44730 | .44245 | .43770 | .43304 | .42846 |
| 76 | .46457 | .45974 | .45500 | .45035 | .44579 |
| 77 | .48181 | .47700 | .47229 | .46766 | .46311 |
| 78 | .49903 | .49426 | .48958 | .48497 | .48045 |
| 79 | .51631 | .51159 | .50694 | .50238 | .49789 |
| 80 | .53371 | .52905 | .52446 | .51994 | .51550 |
| 81 | .55110 | .54650 | .54197 | .53752 | .53313 |
| 82 | .56835 | .56382 | .55937 | .55497 | .55065 |
| 83 | .58546 | .58101 | .57663 | .57231 | .56806 |
| 84 | .60253 | .59817 | .59388 | .58965 | .58547 |
| 85 | .61961 | .61536 | .61116 | .60703 | .60294 |
| 86 | .63630 | .63215 | .62806 | .62402 | .62004 |
| 87 | .65203 | .64800 | .64401 | .64007 | .63619 |
| 88 | .66676 | .66282 | .65894 | .65510 | .65131 |
| 89 | .68079 | .67696 | .67318 | .66944 | .66574 |
| 90 | .69455 | .69084 | .68716 | .68353 | .67993 |
| 91 | .70795 | .70435 | .70078 | .69726 | .69377 |
| 92 | .72052 | .71703 | .71357 | .71015 | .70677 |
| 93 | .73198 | .72860 | .72524 | .72192 | .71864 |
| 94 | .74225 | .73896 | .73570 | .73248 | .72928 |
| 95 | .75121 | .74801 | .74483 | .74169 | .73858 |
| 96 | .75874 | .75561 | .75250 | .74943 | .74639 |
| 97 | .76546 | .76240 | .75936 | .75635 | .75336 |
| 98 | .77131 | .76830 | .76531 | .76235 | .75942 |
| 99 | .77678 | .77382 | .77088 | .76798 | .76509 |
| 100 | .78221 | .77930 | .77642 | .77356 | .77072 |
| 101 | .78691 | .78404 | .78119 | .77837 | .77557 |
| 102 | .79196 | .78912 | .78632 | .78353 | .78077 |
| 103 | .79849 | .79572 | .79297 | .79024 | .78753 |
| 104 | .80460 | .80188 | .79917 | .79648 | .79381 |
| 105 | .81408 | .81143 | .80881 | .80620 | .80361 |
| 106 | .82989 | .82740 | .82494 | .82249 | .82006 |
| 107 | .85233 | .85012 | .84791 | .84572 | .84353 |
| 108 | .88877 | .88704 | .88532 | .88361 | .88190 |
| 109 | .94964 | .94883 | .94803 | .94723 | .94643 |
Table G
Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
| (1) Age | (2) Yearly rate of return | ||||
|---|---|---|---|---|---|
| 12.2% | 12.4% | 12.6% | 12.8% | 13.0% | |
| 0 | .02523 | .02505 | .02488 | .02472 | .02456 |
| 1 | .00721 | .00703 | .00687 | .00671 | .00657 |
| 2 | .00678 | .00659 | .00642 | .00626 | .00610 |
| 3 | .00670 | .00650 | .00632 | .00615 | .00599 |
| 4 | .00678 | .00658 | .00638 | .00620 | .00603 |
| 5 | .00701 | .00679 | .00658 | .00639 | .00620 |
| 6 | .00733 | .00710 | .00688 | .00668 | .00648 |
| 7 | .00733 | .00748 | .00725 | .00703 | .00682 |
| 8 | .00822 | .00796 | .00771 | .00748 | .00726 |
| 9 | .00882 | .00854 | .00828 | .00803 | .00780 |
| 10 | .00953 | .00924 | .00896 | .00869 | .00844 |
| 11 | .01037 | .01006 | .00976 | .00948 | .00922 |
| 12 | .01132 | .01099 | .01068 | .01038 | .01010 |
| 13 | .01234 | .01199 | .01166 | .01134 | .01104 |
| 14 | .01336 | .01299 | .01264 | .01231 | .01199 |
| 15 | .01434 | .01395 | .01358 | .01323 | .01289 |
| 16 | .01522 | .01481 | .01442 | .01405 | .01371 |
| 17 | .01603 | .01559 | .01518 | .01480 | .01443 |
| 18 | .01677 | .01631 | .01588 | .01547 | .01508 |
| 19 | .01748 | .01700 | .01654 | .01611 | .01570 |
| 20 | .01821 | .01770 | .01722 | .01677 | .01633 |
| 21 | .01897 | .01843 | .01792 | .01744 | .01698 |
| 22 | .01975 | .01918 | .01864 | .01813 | .01765 |
| 23 | .02059 | .01998 | .01941 | .01887 | .01836 |
| 24 | .02151 | .02087 | .02027 | .01970 | .01915 |
| 25 | .02257 | .02189 | .02125 | .02064 | .02006 |
| 26 | .02380 | .02308 | .02240 | .02175 | .02114 |
| 27 | .02521 | .02445 | .02373 | .02304 | .02239 |
| 28 | .02683 | .02602 | .02525 | .02452 | .02383 |
| 29 | .02861 | .02775 | .02694 | .02616 | .02543 |
| 30 | .03058 | .02967 | .02881 | .02798 | .02720 |
| 31 | .03270 | .03174 | .03082 | .02995 | .02911 |
| 32 | .03502 | .03400 | .03303 | .03210 | .03122 |
| 33 | .03754 | .03646 | .03543 | .03444 | .03350 |
| 34 | .04025 | .03910 | .03801 | .03697 | .03597 |
| 35 | .04318 | .04197 | .04081 | .03971 | .03865 |
| 36 | .04633 | .04505 | .04383 | .04266 | .04154 |
| 37 | .04971 | .04836 | .04707 | .04583 | .04465 |
| 38 | .05331 | .05188 | .05052 | .04922 | .04797 |
| 39 | .05714 | .05564 | .05420 | .05282 | .05150 |
| 40 | .06121 | .05963 | .05812 | .05667 | .05528 |
| 41 | .06554 | .06388 | .06229 | .06076 | .05929 |
| 42 | .07018 | .06843 | .06675 | .06514 | .06360 |
| 43 | .07508 | .07324 | .07148 | .06979 | .06817 |
| 44 | .08028 | .07325 | .07651 | .07473 | .07303 |
| 45 | .08575 | .08373 | .08180 | .07993 | .07814 |
| 46 | .09152 | .08941 | .08738 | .08543 | .08355 |
| 47 | .09759 | .09539 | .09326 | .09122 | .08926 |
| 48 | .10401 | .10171 | .09949 | .09735 | .09530 |
| 49 | .11076 | .10836 | .10605 | .10382 | .10167 |
| 50 | .11788 | .11538 | .11297 | .11065 | .10840 |
| 51 | .12535 | .12276 | .12025 | .11782 | .11548 |
| 52 | .13319 | .13049 | .12788 | .12536 | .12292 |
| 53 | .14139 | .13858 | .13588 | .13326 | .13072 |
| 54 | .14992 | .14701 | .14420 | .14149 | .13885 |
| 55 | .15880 | .15579 | .15288 | .15006 | .14733 |
| 56 | .16801 | .16491 | .16190 | .15898 | .15615 |
| 57 | .17760 | .17439 | .17128 | .16827 | .16534 |
| 58 | .18755 | .18424 | .18103 | .17792 | .17489 |
| 59 | .19790 | .19450 | .19119 | .18798 | .18486 |
| 60 | .20866 | .20516 | .20175 | .19844 | .19523 |
| 61 | .21986 | .21626 | .21276 | .20936 | .20605 |
| 62 | .23151 | .22782 | .22423 | .22073 | .21733 |
| 63 | .24362 | .23984 | .23616 | .23257 | .22908 |
| 64 | .25617 | .25231 | .24854 | .24487 | .24129 |
| 65 | .26917 | .26522 | .26137 | .25761 | .25395 |
| 66 | .28259 | .27857 | .27464 | .27081 | .26707 |
| 67 | .29643 | .29233 | .28833 | .28443 | .38061 |
| 68 | .31070 | .30653 | .30246 | .29849 | .29461 |
| 69 | .32542 | .32120 | .31707 | .31303 | .30908 |
| 70 | .34063 | .33635 | .33217 | .32807 | .32407 |
| 71 | .35639 | .35207 | .34784 | .34370 | .33965 |
| 72 | .37273 | .36837 | .36410 | .35993 | .35583 |
| 73 | .38955 | .38517 | .38088 | .37667 | .37255 |
| 74 | .40670 | .40230 | .39799 | .39377 | .38962 |
| 75 | .42398 | .41958 | .41526 | .41102 | .40686 |
| 76 | .44131 | .43691 | .43259 | .42825 | .42419 |
| 77 | .45864 | .45425 | .44994 | .44571 | .44155 |
| 78 | .47601 | .47164 | .46734 | .46312 | .45897 |
| 79 | .49348 | .48914 | .48487 | .48067 | .47654 |
| 80 | .51112 | .50682 | .50259 | .49842 | .49432 |
| 81 | .52881 | .52455 | .52036 | .51624 | .51218 |
| 82 | .54639 | .54219 | .53805 | .53398 | .52996 |
| 83 | .56386 | .55973 | .55566 | .55164 | .54768 |
| 84 | .58136 | .57730 | .57329 | .56934 | .56545 |
| 85 | .59891 | .59494 | .59102 | .58715 | .58333 |
| 86 | .61610 | .61222 | .60839 | .60460 | .60086 |
| 87 | .62335 | .62856 | .62481 | .62111 | .61746 |
| 88 | .64757 | .64386 | .64021 | .63659 | .63302 |
| 89 | .66209 | .65848 | .65491 | .65139 | .64790 |
| 90 | .67638 | .67287 | .66939 | .66596 | .66256 |
| 91 | .69032 | .68691 | .68353 | .68019 | .67689 |
| 92 | .70342 | .70011 | .69683 | .69359 | .69038 |
| 93 | .71539 | .71217 | .70899 | .70584 | .70271 |
| 94 | .72612 | .72299 | .71989 | .71683 | .71379 |
| 95 | .73550 | .43245 | .72943 | .72643 | .72347 |
| 96 | .74337 | .74039 | .73743 | .73450 | .73160 |
| 97 | .75041 | .74748 | .74458 | .74171 | .73886 |
| 98 | .74652 | .75364 | .75079 | .74797 | .74517 |
| 99 | .76224 | .75941 | .75660 | .75382 | .75106 |
| 100 | .76791 | .76513 | .76237 | .75963 | .75692 |
| 101 | .77280 | .77005 | .76732 | .67462 | .76194 |
| 102 | .77804 | .77532 | .77263 | .76996 | .76732 |
| 103 | .78485 | .78218 | .77954 | .77692 | .77432 |
| 104 | .79117 | .78854 | .78594 | .78335 | .78078 |
| 105 | .80103 | .79848 | .78595 | .79343 | .79093 |
| 106 | .81764 | .81524 | .81285 | .81048 | .80813 |
| 107 | .84137 | .93921 | .83706 | .83493 | .83281 |
| 108 | .88020 | .87851 | .87682 | .87515 | .87348 |
| 109 | .94563 | .94484 | .94405 | .94326 | .94248 |
Table G
Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
| (1) Age | (2) Yearly rate of return | ||||
|---|---|---|---|---|---|
| 13.2% | 13.4% | 13.6% | 13.8% | 14.0% | |
| 0 | .02442 | .02428 | .02414 | .02402 | .02389 |
| 1 | .00643 | .00629 | .00617 | .00605 | .00594 |
| 2 | .00596 | .00582 | .00569 | .00556 | .00544 |
| 3 | .00583 | .00569 | .00555 | .00542 | .00529 |
| 4 | .00586 | .00571 | .00556 | .00542 | .00529 |
| 5 | .00603 | .00587 | .00571 | .00556 | .00542 |
| 6 | .00630 | .00612 | .00595 | .00580 | .00565 |
| 7 | .00663 | .00644 | .00626 | .00610 | .00594 |
| 8 | .00705 | .00685 | .00666 | .00648 | .00631 |
| 9 | .00757 | .00736 | .00716 | .00697 | .00679 |
| 10 | .00821 | .00798 | .00777 | .00756 | .00737 |
| 11 | .00896 | .00872 | .00850 | .00828 | .00807 |
| 12 | .00983 | .00958 | .00934 | .00911 | .00889 |
| 13 | .01076 | .01049 | .01024 | .00999 | .00976 |
| 14 | .01170 | .01141 | .01114 | .01088 | .01064 |
| 15 | .01258 | .01228 | .01200 | .01172 | .01147 |
| 16 | .01337 | .01306 | .01276 | .01247 | .01220 |
| 17 | .01408 | .01375 | .01343 | .01313 | .01284 |
| 18 | .01471 | .01436 | .01403 | .01371 | .01341 |
| 19 | .01531 | .01494 | .01459 | .01426 | .01394 |
| 20 | .01592 | .01553 | .01516 | .01481 | .01447 |
| 21 | .01655 | .01614 | .01574 | .01537 | .01502 |
| 22 | .01719 | .01675 | .01634 | .01594 | .01557 |
| 23 | .01787 | .01741 | .01697 | .01655 | .01615 |
| 24 | .01863 | .01814 | .01768 | .01723 | .01681 |
| 25 | .01952 | .01899 | .01850 | .01802 | .01757 |
| 26 | .02056 | .02000 | .01947 | .01897 | .01849 |
| 27 | .02177 | .02118 | .02061 | .02008 | .01956 |
| 28 | .02317 | .02254 | .02194 | .02137 | .02082 |
| 29 | .02472 | .02405 | .02342 | .02281 | .02223 |
| 30 | .02645 | .02574 | .02506 | .02441 | .02379 |
| 31 | .02832 | .02756 | .02684 | .02615 | .02549 |
| 32 | .03037 | .02957 | .02880 | .02806 | .02736 |
| 33 | .03261 | .03175 | .03093 | .03015 | .02940 |
| 34 | .03502 | .03411 | .03324 | .03241 | .03162 |
| 35 | .03764 | .03668 | .03576 | .03488 | .03403 |
| 36 | .04048 | .03945 | .03847 | .03754 | .03664 |
| 37 | .04352 | .04244 | .04140 | .04040 | .03945 |
| 38 | .04677 | .04563 | .04453 | .04347 | .04246 |
| 39 | .05024 | .04903 | .04787 | .04675 | .04568 |
| 40 | .05394 | .05266 | .05143 | .05025 | .04912 |
| 41 | .05789 | .05653 | .05524 | .05399 | .05279 |
| 42 | .06212 | .06069 | .05932 | .05800 | .05674 |
| 43 | .06661 | .06511 | .06366 | .06227 | .06093 |
| 44 | .07138 | .06980 | .06828 | .06682 | .06541 |
| 45 | .07642 | .07476 | .07316 | .07162 | .07013 |
| 46 | .08174 | .08000 | .07832 | .07670 | .07514 |
| 47 | .08736 | .08553 | .08377 | .08207 | .08042 |
| 48 | .09331 | .09140 | .08955 | .08776 | .08604 |
| 49 | .09959 | .09759 | .09565 | .09378 | .09198 |
| 50 | .10624 | .10414 | .10212 | .10016 | .09827 |
| 51 | .11322 | .11104 | .10892 | .10688 | .10490 |
| 52 | .12057 | .11829 | .11608 | .11395 | .11188 |
| 53 | .12827 | .12590 | .12360 | .12138 | .11922 |
| 54 | .13631 | .13384 | .13145 | .12913 | .12689 |
| 55 | .14469 | .14213 | .13964 | .13724 | .13490 |
| 56 | .15341 | .15075 | .14817 | .14567 | .14324 |
| 57 | .16250 | .15975 | .15708 | .15448 | .15196 |
| 58 | .17196 | .16911 | .16634 | .16365 | .16104 |
| 59 | .18183 | .17888 | .17602 | .17324 | .17053 |
| 60 | .19210 | .18906 | .18611 | .18323 | .18043 |
| 61 | .20283 | .19970 | .19665 | .19368 | .19079 |
| 62 | .21402 | .21079 | .20766 | .20460 | .20162 |
| 63 | .22568 | .22237 | .21914 | .21600 | .21293 |
| 64 | .23780 | .23440 | .23109 | .22786 | .22471 |
| 65 | .25038 | .24690 | .24350 | .24019 | .23695 |
| 66 | .26342 | .25986 | .25638 | .25298 | .24967 |
| 67 | .27689 | .27325 | .26970 | .26623 | .26284 |
| 68 | .29081 | .28711 | .28248 | .27994 | .27647 |
| 69 | .30523 | .30145 | .29776 | .29415 | .29062 |
| 70 | .32015 | .31632 | .31257 | .30890 | .30530 |
| 71 | .33568 | .33179 | .32799 | .32426 | .32061 |
| 72 | .35182 | .34789 | .34404 | .34027 | .33657 |
| 73 | .36851 | .36455 | .36066 | .35685 | .35311 |
| 74 | .38555 | .38156 | .37765 | .37381 | .37004 |
| 75 | .40278 | .39877 | .39484 | .39098 | .38710 |
| 76 | .42010 | .41608 | .41213 | .40826 | .40445 |
| 77 | .43746 | .43344 | .42949 | .42561 | .42179 |
| 78 | .45489 | .45088 | .44693 | .44305 | .43923 |
| 79 | .47248 | .46848 | .46454 | .46067 | .45686 |
| 80 | .49028 | .48631 | .48240 | .47854 | .47475 |
| 82 | .50818 | .50423 | .50035 | .49653 | .59276 |
| 82 | .52600 | .52210 | .51826 | .51447 | .51074 |
| 83 | .54377 | .53992 | .53613 | .53238 | .52869 |
| 84 | .56160 | .55781 | .55407 | .55038 | .54674 |
| 85 | .57956 | .57584 | .57216 | .56854 | .56496 |
| 86 | .59717 | .59353 | .58993 | .58638 | .58287 |
| 87 | .61385 | .61028 | .60676 | .60328 | .59984 |
| 88 | .62950 | .62601 | .62256 | .61915 | .61578 |
| 89 | .64445 | .64104 | .63767 | .63434 | .63105 |
| 90 | .65920 | .65588 | .65259 | .64934 | .64612 |
| 91 | .67362 | .67039 | .66719 | .66402 | .66089 |
| 92 | .68720 | .68405 | .68094 | .67786 | .67481 |
| 93 | .69962 | .69657 | .69354 | .69054 | .68757 |
| 94 | .71078 | .70780 | .70485 | .70193 | .69903 |
| 95 | .72053 | .71763 | .71475 | .71189 | .70906 |
| 96 | .72872 | .72587 | .72305 | .72026 | .71748 |
| 97 | .73604 | .73325 | .73048 | .72773 | .72501 |
| 98 | .74239 | .73964 | .73692 | .73422 | .73154 |
| 99 | .74833 | .74562 | .74294 | .74028 | .73764 |
| 100 | .75423 | .75156 | .74892 | .74630 | .74370 |
| 101 | .75928 | .75664 | .75403 | .75144 | .74887 |
| 102 | .76469 | .76209 | .75950 | .75694 | .75440 |
| 103 | .77174 | .76918 | .76664 | .76413 | .76163 |
| 104 | .77824 | .77571 | .77320 | .77071 | .76824 |
| 105 | .78845 | .78599 | .78354 | .78111 | .77870 |
| 106 | .80579 | .80346 | .80115 | .79885 | .79657 |
| 107 | .83070 | .82860 | .82652 | .82444 | .82238 |
| 108 | .87182 | .87016 | .86852 | .86688 | .86525 |
| 109 | .94170 | .94092 | .94014 | .93937 | .93860 |
(e) Present value of the remainder interest in the case of transfers to pooled income funds for which the valuation date is after April 30, 1989, and before May 1, 1999—(1) In general. In the case of transfers to pooled income funds for which the valuation date is after April 30, 1989, and before May 1, 1999, the present value of a remainder interest is determined under this section. See, however, § 1.7520-3(b) (relating to exceptions to the use of prescribed tables under certain circumstances). The present value of a remainder interest that is dependent on the termination of the life of one individual is computed by the use of Table S in paragraph (e)(5) of this section. For purposes of the computations under this section, the age of an individual is the age at the individual’s nearest birthday. If the valuation date of a transfer to a pooled income fund is after April 30, 1989, and before June 10, 1994, a transferor can rely on Notice 89-24, 1989-1 C.B. 660, or Notice 89-60, 1989-1 C.B. 700, in valuing the transferred interest. (See § 601.601(d)(2)(ii)(b) of this chapter.)
(2) Present value of a remainder interest. The present value of a remainder interest in property transferred to a pooled income fund is computed on the basis of—
(i) Life contingencies determined from the values of lx that are set forth in Table 80CNSMT in § 20.2031-7A(e)(4) of this chapter (Estate Tax Regulations); and
(ii) Discount at a rate of interest, compounded annually, equal to the highest yearly rate of return of the pooled income fund for the 3 taxable years immediately preceding its taxable year in which the transfer of property to the fund is made. The provisions of § 1.642(c)-6(c) apply for determining the yearly rate of return. However, where the taxable year is less than 12 months, the provisions of § 1.642(c)-6(e)(3)(ii) apply for the determining the yearly rate of return.
(3) Pooled income funds in existence less than 3 taxable years. The provisions of § 1.642(c)-6(e)(4) apply for determining the highest yearly rate of return when the pooled income fund has been in existence less than three taxable years.
(4) Computation of value of remainder interest. The factor that is used in determining the present value of a remainder interest that is dependent on the termination of the life of one individual is the factor from Table S in paragraph (e)(5) of this section under the appropriate yearly rate of return opposite the number that corresponds to the age of the individual upon whose life the value of the remainder interest is based. Table S in paragraph (e)(5) of this section includes factors for yearly rates of return from 4.2 to 14 percent. Many actuarial factors not contained in Table S in paragraph (e)(5) of this section are contained in Table S in Internal Revenue Service Publication 1457, “Actuarial Values, Alpha Volume,” (8-89). Publication 1457 is no longer available for purchase from the Superintendent of Documents, United States Government Printing Office, Washington, DC 20402. However, pertinent factors in this publication may be obtained by a written request to: CC:DOM:CORP:R (IRS Publication 1457), room 5226, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. For other situations, see § 1.642(c)-6(b). If the yearly rate of return is a percentage that is between the yearly rates of return for which factors are provided, a linear interpolation must be made. The present value of the remainder interest is determined by multiplying the fair market value of the property on the valuation date by the appropriate remainder factor. For an example of a computation of the present value of a remainder interest requiring a linear interpolation adjustment, see § 1.642(c)-6(e)(5).
(5) Actuarial tables. In the case of transfers for which the valuation date is after April 30, 1989, and before May 1, 1999, the present value of a remainder interest dependent on the termination of one life in the case of a transfer to a pooled income fund is determined by use of the following tables:
Table S—Based on Life Table 80CNSMT Single Life Remainder Factors
[Applicable After April 30, 1989, and Before May 1, 1999]
| Age | Interest rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 4.2% | 4.4% | 4.6% | 4.8% | 5.0% | 5.2% | 5.4% | 5.6% | 5.8% | 6.0% | |
| 0 | .07389 | .06749 | .06188 | .05695 | .05261 | .04879 | .04541 | .04243 | .03978 | .03744 |
| 1 | .06494 | .05832 | .05250 | .04738 | .04287 | .03889 | .03537 | .03226 | .02950 | .02705 |
| 2 | .06678 | .05999 | .05401 | .04874 | .04410 | .03999 | .03636 | .03314 | .03028 | .02773 |
| 3 | .06897 | .06200 | .05587 | .05045 | .04567 | .04143 | .03768 | .03435 | .03139 | .02875 |
| 4 | .07139 | .06425 | .05796 | .05239 | .04746 | .04310 | .03922 | .03578 | .03271 | .02998 |
| 5 | .07401 | .06669 | .06023 | .05451 | .04944 | .04494 | .04094 | .03738 | .03421 | .03137 |
| 6 | .07677 | .06928 | .06265 | .05677 | .05156 | .04692 | .04279 | .03911 | .03583 | .03289 |
| 7 | .07968 | .07201 | .06521 | .05918 | .05381 | .04903 | .04477 | .04097 | .03757 | .03453 |
| 8 | .08274 | .07489 | .06792 | .06172 | .05621 | .05129 | .04689 | .04297 | .03945 | .03630 |
| 9 | .08597 | .07794 | .07079 | .06443 | .05876 | .05370 | .04917 | .04511 | .04148 | .03821 |
| 10 | .08936 | .08115 | .07383 | .06730 | .06147 | .05626 | .05159 | .04741 | .04365 | .04027 |
| 11 | .09293 | .08453 | .07704 | .07035 | .06436 | .05900 | .05419 | .04988 | .04599 | .04250 |
| 12 | .09666 | .08807 | .08040 | .07354 | .06739 | .06188 | .05693 | .05248 | .04847 | .04486 |
| 13 | .10049 | .09172 | .08387 | .07684 | .07053 | .06487 | .05977 | .05518 | .05104 | .04731 |
| 14 | .10437 | .09541 | .08738 | .08017 | .07370 | .06788 | .06263 | .05791 | .05364 | .04978 |
| 15 | .10827 | .09912 | .09090 | .08352 | .07688 | .07090 | .06551 | .06064 | .05623 | .05225 |
| 16 | .11220 | .10285 | .09445 | .08689 | .08008 | .07394 | .06839 | .06337 | .05883 | .05472 |
| 17 | .11615 | .10661 | .09802 | .09028 | .08330 | .07699 | .07129 | .06612 | .06144 | .05719 |
| 18 | .12017 | .11043 | .10165 | .09373 | .08656 | .08009 | .07422 | .06890 | .06408 | .05969 |
| 19 | .12428 | .11434 | .10537 | .09726 | .08992 | .08327 | .07724 | .07177 | .06679 | .06226 |
| 20 | .12850 | .11836 | .10919 | .10089 | .09337 | .08654 | .08035 | .07471 | .06959 | .06492 |
| 21 | .13282 | .12248 | .11311 | .10462 | .09692 | .08991 | .08355 | .07775 | .07247 | .06765 |
| 22 | .13728 | .12673 | .11717 | .10848 | .10059 | .09341 | .08686 | .08090 | .07546 | .07049 |
| 23 | .14188 | .13113 | .12136 | .11248 | .10440 | .09703 | .09032 | .08418 | .07858 | .07345 |
| 24 | .14667 | .13572 | .12575 | .11667 | .10839 | .10084 | .09395 | .08764 | .08187 | .07659 |
| 25 | .15167 | .14051 | .13034 | .12106 | .11259 | .10486 | .09778 | .09130 | .08536 | .07991 |
| 26 | .15690 | .14554 | .13517 | .12569 | .11703 | .10910 | .10184 | .09518 | .08907 | .08346 |
| 27 | .16237 | .15081 | .14024 | .13056 | .12171 | .11359 | .10614 | .09930 | .09302 | .08724 |
| 28 | .16808 | .15632 | .14555 | .13567 | .12662 | .11831 | .11068 | .10366 | .09720 | .09125 |
| 29 | .17404 | .16208 | .15110 | .14104 | .13179 | .12329 | .11547 | .10827 | .10163 | .09551 |
| 30 | .18025 | .16808 | .15692 | .14665 | .13721 | .12852 | .12051 | .11313 | .10631 | .10002 |
| 31 | .18672 | .17436 | .16300 | .15255 | .14291 | .13403 | .12584 | .11827 | .11127 | .10480 |
| 32 | .19344 | .18090 | .16935 | .15870 | .14888 | .13980 | .13142 | .12367 | .11650 | .10985 |
| 33 | .20044 | .18772 | .17598 | .16514 | .15513 | .14587 | .13730 | .12936 | .12201 | .11519 |
| 34 | .20770 | .19480 | .18287 | .17185 | .16165 | .15221 | .14345 | .13533 | .12780 | .12080 |
| 35 | .21522 | .20215 | .19005 | .17884 | .16846 | .15883 | .14989 | .14159 | .13388 | .12670 |
| 36 | .22299 | .20974 | .19747 | .18609 | .17552 | .16571 | .15660 | .14812 | .14022 | .13287 |
| 37 | .23101 | .21760 | .20516 | .19360 | .18286 | .17288 | .16358 | .15492 | .14685 | .13933 |
| 38 | .23928 | .22572 | .21311 | .20139 | .19048 | .18032 | .17085 | .16201 | .15377 | .14607 |
| 39 | .24780 | .23409 | .22133 | .20945 | .19837 | .18804 | .17840 | .16939 | .16097 | .15310 |
| 40 | .25658 | .24273 | .22982 | .21778 | .20654 | .19605 | .18624 | .17706 | .16847 | .16043 |
| 41 | .26560 | .25163 | .23858 | .22639 | .21499 | .20434 | .19436 | .18502 | .17627 | .16806 |
| 42 | .27486 | .26076 | .24758 | .23525 | .22370 | .21289 | .20276 | .19326 | .18434 | .17597 |
| 43 | .28435 | .27013 | .25683 | .24436 | .23268 | .22172 | .21143 | .20177 | .19270 | .18416 |
| 44 | .29407 | .27975 | .26633 | .25373 | .24191 | .23081 | .22038 | .21057 | .20134 | .19265 |
| 45 | .30402 | .28961 | .27608 | .26337 | .25142 | .24019 | .22962 | .21966 | .21028 | .20144 |
| 46 | .31420 | .29970 | .28608 | .27326 | .26120 | .24983 | .23913 | .22904 | .21951 | .21053 |
| 47 | .32460 | .31004 | .29632 | .28341 | .27123 | .25975 | .24892 | .23870 | .22904 | .21991 |
| 48 | .33521 | .32058 | .30679 | .29379 | .28151 | .26992 | .25897 | .24862 | .23883 | .22957 |
| 49 | .34599 | .33132 | .31746 | .30438 | .29201 | .28032 | .26926 | .25879 | .24888 | .23949 |
| 50 | .35695 | .34224 | .32833 | .31518 | .30273 | .29094 | .27978 | .26921 | .25918 | .24966 |
| 51 | .36809 | .35335 | .33940 | .32619 | .31367 | .30180 | .29055 | .27987 | .26973 | .26010 |
| 52 | .37944 | .36468 | .35070 | .33744 | .32486 | .31292 | .30158 | .29081 | .28057 | .27083 |
| 53 | .39098 | .37622 | .36222 | .34892 | .33629 | .32429 | .31288 | .30203 | .29170 | .28186 |
| 54 | .40269 | .38794 | .37393 | .36062 | .34795 | .33590 | .32442 | .31349 | .30308 | .29316 |
| 55 | .41457 | .39985 | .38585 | .37252 | .35983 | .34774 | .33621 | .32522 | .31474 | .30473 |
| 56 | .42662 | .41194 | .39796 | .38464 | .37193 | .35981 | .34824 | .33720 | .32666 | .31658 |
| 57 | .43884 | .42422 | .41028 | .39697 | .38426 | .37213 | .36053 | .34945 | .33885 | .32872 |
| 58 | .45123 | .43668 | .42279 | .40951 | .39682 | .38468 | .37307 | .36196 | .35132 | .34114 |
| 59 | .46377 | .44931 | .43547 | .42224 | .40958 | .39745 | .38584 | .37471 | .36405 | .35383 |
| 60 | .47643 | .46206 | .44830 | .43513 | .42250 | .41040 | .39880 | .38767 | .37699 | .36674 |
| 61 | .48916 | .47491 | .46124 | .44814 | .43556 | .42350 | .41192 | .40080 | .39012 | .37985 |
| 62 | .50196 | .48783 | .47427 | .46124 | .44874 | .43672 | .42518 | .41408 | .40340 | .39314 |
| 63 | .51480 | .50081 | .48736 | .47444 | .46201 | .45006 | .43856 | .42749 | .41684 | .40658 |
| 64 | .52770 | .51386 | .50054 | .48773 | .47540 | .46352 | .45208 | .44105 | .43043 | .42019 |
| 65 | .54069 | .52701 | .51384 | .50115 | .48892 | .47713 | .46577 | .45480 | .44422 | .43401 |
| 66 | .55378 | .54029 | .52727 | .51472 | .50262 | .49093 | .47965 | .46876 | .45824 | .44808 |
| 67 | .56697 | .55368 | .54084 | .52845 | .51648 | .50491 | .49373 | .48293 | .47248 | .46238 |
| 68 | .58026 | .56717 | .55453 | .54231 | .53049 | .51905 | .50800 | .49729 | .48694 | .47691 |
| 69 | .59358 | .58072 | .56828 | .55624 | .54459 | .53330 | .52238 | .51179 | .50154 | .49160 |
| 70 | .60689 | .59427 | .58205 | .57021 | .55874 | .54762 | .53683 | .52638 | .51624 | .50641 |
| 71 | .62014 | .60778 | .59578 | .58415 | .57287 | .56193 | .55131 | .54100 | .53099 | .52126 |
| 72 | .63334 | .62123 | .60948 | .59808 | .58700 | .57624 | .56579 | .55563 | .54577 | .53617 |
| 73 | .64648 | .63465 | .62315 | .61198 | .60112 | .59056 | .58029 | .57030 | .56059 | .55113 |
| 74 | .65961 | .64806 | .63682 | .62590 | .61527 | .60492 | .59485 | .58504 | .57550 | .56620 |
| 75 | .67274 | .66149 | .65054 | .63987 | .62948 | .61936 | .60950 | .59990 | .59053 | .58140 |
| 76 | .68589 | .67495 | .66429 | .65390 | .64377 | .63390 | .62427 | .61487 | .60570 | .59676 |
| 77 | .69903 | .68841 | .67806 | .66796 | .65811 | .64849 | .63910 | .62993 | .62097 | .61223 |
| 78 | .71209 | .70182 | .69179 | .68199 | .67242 | .66307 | .65393 | .64501 | .63628 | .62775 |
| 79 | .72500 | .71507 | .70537 | .69588 | .68660 | .67754 | .66867 | .65999 | .65151 | .64321 |
| 80 | .73768 | .72809 | .71872 | .70955 | .70058 | .69180 | .68320 | .67479 | .66655 | .65849 |
| 81 | .75001 | .74077 | .73173 | .72288 | .71422 | .70573 | .69741 | .68926 | .68128 | .67345 |
| 82 | .76195 | .75306 | .74435 | .73582 | .72746 | .71926 | .71123 | .70335 | .69562 | .68804 |
| 83 | .77346 | .76491 | .75654 | .74832 | .74026 | .73236 | .72460 | .71699 | .70952 | .70219 |
| 84 | .78456 | .77636 | .76831 | .76041 | .75265 | .74503 | .73756 | .73021 | .72300 | .71592 |
| 85 | .79530 | .78743 | .77971 | .77212 | .76466 | .75733 | .75014 | .74306 | .73611 | .72928 |
| 86 | .80560 | .79806 | .79065 | .78337 | .77621 | .76917 | .76225 | .75544 | .74875 | .74216 |
| 87 | .81535 | .80813 | .80103 | .79404 | .78717 | .78041 | .77375 | .76720 | .76076 | .75442 |
| 88 | .82462 | .81771 | .81090 | .80420 | .79760 | .79111 | .78472 | .77842 | .77223 | .76612 |
| 89 | .83356 | .82694 | .82043 | .81401 | .80769 | .80147 | .79533 | .78929 | .78334 | .77747 |
| 90 | .84225 | .83593 | .82971 | .82357 | .81753 | .81157 | .80570 | .79991 | .79420 | .78857 |
| 91 | .85058 | .84455 | .83861 | .83276 | .82698 | .82129 | .81567 | .81013 | .80466 | .79927 |
| 92 | .85838 | .85263 | .84696 | .84137 | .83585 | .83040 | .82503 | .81973 | .81449 | .80933 |
| 93 | .86557 | .86009 | .85467 | .84932 | .84405 | .83884 | .83370 | .82862 | .82360 | .81865 |
| 94 | .87212 | .86687 | .86169 | .85657 | .85152 | .84653 | .84160 | .83673 | .83192 | .82717 |
| 95 | .87801 | .87298 | .86801 | .86310 | .85825 | .85345 | .84872 | .84404 | .83941 | .83484 |
| 96 | .88322 | .87838 | .87360 | .86888 | .86420 | .85959 | .85502 | .85051 | .84605 | .84165 |
| 97 | .88795 | .88328 | .87867 | .87411 | .86961 | .86515 | .86074 | .85639 | .85208 | .84782 |
| 98 | .89220 | .88769 | .88323 | .87883 | .87447 | .87016 | .86589 | .86167 | .85750 | .85337 |
| 99 | .89612 | .89176 | .88745 | .88318 | .87895 | .87478 | .87064 | .86656 | .86251 | .85850 |
| 100 | .89977 | .89555 | .89136 | .88722 | .88313 | .87908 | .87506 | .87109 | .86716 | .86327 |
| 101 | .90326 | .89917 | .89511 | .89110 | .88712 | .88318 | .87929 | .87543 | .87161 | .86783 |
| 102 | .90690 | .90294 | .89901 | .89513 | .89128 | .88746 | .88369 | .87995 | .87624 | .87257 |
| 103 | .91076 | .90694 | .90315 | .89940 | .89569 | .89200 | .88835 | .88474 | .88116 | .87760 |
| 104 | .91504 | .91138 | .90775 | .90415 | .90058 | .89704 | .89354 | .89006 | .88661 | .88319 |
| 105 | .92027 | .91681 | .91337 | .90996 | .90658 | .90322 | .89989 | .89659 | .89331 | .89006 |
| 106 | .92763 | .92445 | .92130 | .91816 | .91506 | .91197 | .90890 | .90586 | .90284 | .89983 |
| 107 | .93799 | .93523 | .93249 | .92977 | .92707 | .92438 | .92170 | .91905 | .91641 | .91378 |
| 108 | .95429 | .95223 | .95018 | .94814 | .94611 | .94409 | .94208 | .94008 | .93809 | .93611 |
| 109 | .97985 | .97893 | .97801 | .97710 | .97619 | .97529 | .97438 | .97348 | .97259 | .97170 |
Table S—Based on Life Table 80CNSMT Single Life Remainder Factors
[Applicable After April 30, 1989, and Before May 1, 1999]
| Age | Interest rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 6.2% | 6.4% | 6.6% | 6.8% | 7.0% | 7.2% | 7.4% | 7.6% | 7.8% | 8.0% | |
| 0 | .03535 | .03349 | .03183 | .03035 | .02902 | .02783 | .02676 | .02579 | .02492 | .02413 |
| 1 | .02486 | .02292 | .02119 | .01963 | .01824 | .01699 | .01587 | .01486 | .01395 | .01312 |
| 2 | .02547 | .02345 | .02164 | .02002 | .01857 | .01727 | .01609 | .01504 | .01408 | .01321 |
| 3 | .02640 | .02429 | .02241 | .02073 | .01921 | .01785 | .01662 | .01552 | .01451 | .01361 |
| 4 | .02753 | .02535 | .02339 | .02163 | .02005 | .01863 | .01735 | .01619 | .01514 | .01418 |
| 5 | .02883 | .02656 | .02453 | .02269 | .02105 | .01956 | .01822 | .01700 | .01590 | .01490 |
| 6 | .03026 | .02790 | .02578 | .02387 | .02215 | .02060 | .01919 | .01792 | .01677 | .01572 |
| 7 | .03180 | .02935 | .02714 | .02515 | .02336 | .02174 | .02027 | .01894 | .01773 | .01664 |
| 8 | .03347 | .03092 | .02863 | .02656 | .02469 | .02300 | .02146 | .02007 | .01881 | .01766 |
| 9 | .03528 | .03263 | .03025 | .02810 | .02615 | .02438 | .02278 | .02133 | .02000 | .01880 |
| 10 | .03723 | .03449 | .03201 | .02977 | .02774 | .02590 | .02423 | .02271 | .02133 | .02006 |
| 11 | .03935 | .03650 | .03393 | .03160 | .02949 | .02757 | .02583 | .02424 | .02279 | .02147 |
| 12 | .04160 | .03865 | .03598 | .03356 | .03136 | .02936 | .02755 | .02589 | .02438 | .02299 |
| 13 | .04394 | .04088 | .03811 | .03560 | .03331 | .03123 | .02934 | .02761 | .02603 | .02458 |
| 14 | .04629 | .04312 | .04025 | .03764 | .03527 | .03311 | .03113 | .02933 | .02768 | .02617 |
| 15 | .04864 | .04536 | .04238 | .03968 | .03721 | .03496 | .03290 | .03103 | .02930 | .02773 |
| 16 | .05099 | .04759 | .04451 | .04170 | .03913 | .03679 | .03466 | .03270 | .03090 | .02926 |
| 17 | .05333 | .04982 | .04662 | .04370 | .04104 | .03861 | .03638 | .03434 | .03247 | .03075 |
| 18 | .05570 | .05207 | .04875 | .04573 | .04296 | .04044 | .03812 | .03599 | .03404 | .03225 |
| 19 | .05814 | .05438 | .05095 | .04781 | .04494 | .04231 | .03990 | .03769 | .03565 | .03378 |
| 20 | .06065 | .05677 | .05321 | .04996 | .04698 | .04424 | .04173 | .03943 | .03731 | .03535 |
| 21 | .06325 | .05922 | .05554 | .05217 | .04907 | .04623 | .04362 | .04122 | .03901 | .03697 |
| 22 | .06594 | .06178 | .05797 | .05447 | .05126 | .04831 | .04559 | .04309 | .04078 | .03865 |
| 23 | .06876 | .06446 | .06051 | .05688 | .05355 | .05048 | .04766 | .04505 | .04265 | .04042 |
| 24 | .07174 | .06729 | .06321 | .05945 | .05599 | .05281 | .04987 | .04715 | .04465 | .04233 |
| 25 | .07491 | .07031 | .06609 | .06219 | .05861 | .05530 | .05224 | .04941 | .04680 | .04438 |
| 26 | .07830 | .07355 | .06918 | .06515 | .06142 | .05799 | .05481 | .05187 | .04915 | .04662 |
| 27 | .08192 | .07702 | .07250 | .06832 | .06446 | .06090 | .05759 | .05454 | .05170 | .04906 |
| 28 | .08577 | .08071 | .07603 | .07171 | .06772 | .06402 | .06059 | .05740 | .05445 | .05170 |
| 29 | .08986 | .08464 | .07981 | .07534 | .07120 | .06736 | .06380 | .06049 | .05742 | .05456 |
| 30 | .09420 | .08882 | .08383 | .07921 | .07492 | .07095 | .06725 | .06381 | .06061 | .05763 |
| 31 | .09881 | .09327 | .08812 | .08335 | .07891 | .07479 | .07095 | .06738 | .06405 | .06095 |
| 32 | .10369 | .09797 | .09267 | .08774 | .08315 | .07888 | .07491 | .07120 | .06774 | .06451 |
| 33 | .10885 | .10297 | .09750 | .09241 | .08767 | .08325 | .07913 | .07529 | .07170 | .06834 |
| 34 | .11430 | .10824 | .10261 | .09736 | .09246 | .08790 | .08363 | .07964 | .07592 | .07243 |
| 35 | .12002 | .11380 | .10800 | .10259 | .09754 | .09282 | .08841 | .08428 | .08041 | .07679 |
| 36 | .12602 | .11963 | .11366 | .10809 | .10288 | .09800 | .09344 | .08917 | .08516 | .08140 |
| 37 | .13230 | .12574 | .11961 | .11387 | .10850 | .10347 | .09876 | .09433 | .09018 | .08628 |
| 38 | .13887 | .13214 | .12584 | .11994 | .11441 | .10922 | .10436 | .09978 | .09549 | .09145 |
| 39 | .14573 | .13883 | .13237 | .12630 | .12061 | .11527 | .11025 | .10553 | .10109 | .09690 |
| 40 | .15290 | .14583 | .13920 | .13297 | .12712 | .12162 | .11644 | .11157 | .10698 | .10266 |
| 41 | .16036 | .15312 | .14633 | .13994 | .13393 | .12827 | .12294 | .11792 | .11318 | .10871 |
| 42 | .16810 | .16071 | .15375 | .14720 | .14103 | .13522 | .12973 | .12456 | .11967 | .11505 |
| 43 | .17614 | .16858 | .16146 | .15475 | .14842 | .14245 | .13682 | .13149 | .12645 | .12169 |
| 44 | .18447 | .17675 | .16948 | .16261 | .15613 | .15000 | .14421 | .13873 | .13355 | .12864 |
| 45 | .19310 | .18524 | .17780 | .17078 | .16414 | .15787 | .15192 | .14630 | .14096 | .13591 |
| 46 | .20204 | .19402 | .18644 | .17926 | .17247 | .16604 | .15995 | .15418 | .14870 | .14350 |
| 47 | .21128 | .20311 | .19538 | .18806 | .18112 | .17454 | .16830 | .16238 | .15676 | .15141 |
| 48 | .22080 | .21249 | .20462 | .19716 | .19007 | .18335 | .17696 | .17090 | .16513 | .15964 |
| 49 | .23059 | .22214 | .21413 | .20653 | .19930 | .19244 | .18591 | .17970 | .17379 | .16816 |
| 50 | .24063 | .23206 | .22391 | .21617 | .20881 | .20180 | .19514 | .18879 | .18274 | .17697 |
| 51 | .25095 | .24225 | .23398 | .22610 | .21861 | .21147 | .20466 | .19818 | .19199 | .18609 |
| 52 | .26157 | .25275 | .24436 | .23636 | .22874 | .22147 | .21453 | .20791 | .20159 | .19556 |
| 53 | .27249 | .26357 | .25505 | .24694 | .23919 | .23180 | .22474 | .21799 | .21154 | .20537 |
| 54 | .28369 | .27466 | .26604 | .25782 | .24995 | .24244 | .23526 | .22839 | .22181 | .21552 |
| 55 | .29518 | .28605 | .27734 | .26900 | .26103 | .25341 | .24611 | .23912 | .23243 | .22601 |
| 56 | .30695 | .29774 | .28893 | .28050 | .27242 | .26469 | .25728 | .25019 | .24338 | .23685 |
| 57 | .31902 | .30973 | .30084 | .29232 | .28415 | .27632 | .26881 | .26161 | .25469 | .24805 |
| 58 | .33138 | .32203 | .31306 | .30446 | .29621 | .28829 | .28069 | .27339 | .26637 | .25962 |
| 59 | .34402 | .33461 | .32558 | .31691 | .30859 | .30059 | .29290 | .28550 | .27839 | .27155 |
| 60 | .35690 | .34745 | .33836 | .32963 | .32124 | .31317 | .30540 | .29792 | .29073 | .28379 |
| 61 | .36999 | .36050 | .35137 | .34259 | .33414 | .32601 | .31817 | .31062 | .30334 | .29633 |
| 62 | .38325 | .37374 | .36458 | .35576 | .34726 | .33907 | .33117 | .32356 | .31621 | .30912 |
| 63 | .39669 | .38717 | .37799 | .36913 | .36060 | .35236 | .34441 | .33674 | .32933 | .32217 |
| 64 | .41031 | .40078 | .39159 | .38272 | .37415 | .36588 | .35789 | .35016 | .34270 | .33548 |
| 65 | .42416 | .41464 | .40545 | .39656 | .38798 | .37968 | .37166 | .36390 | .35639 | .34912 |
| 66 | .43825 | .42876 | .41958 | .41070 | .40211 | .39380 | .38576 | .37797 | .37043 | .36312 |
| 67 | .45260 | .44315 | .43399 | .42513 | .41655 | .40824 | .40019 | .39238 | .38482 | .37749 |
| 68 | .46720 | .45779 | .44868 | .43985 | .43129 | .42299 | .41494 | .40713 | .39956 | .39221 |
| 69 | .48197 | .47263 | .46357 | .45478 | .44625 | .43798 | .42995 | .42215 | .41458 | .40722 |
| 70 | .49686 | .48760 | .47861 | .46988 | .46140 | .45316 | .44516 | .43738 | .42983 | .42248 |
| 71 | .51182 | .50265 | .49374 | .48508 | .47666 | .46847 | .46051 | .45276 | .44523 | .43790 |
| 72 | .52685 | .51778 | .50896 | .50038 | .49203 | .48390 | .47599 | .46829 | .46079 | .45349 |
| 73 | .54194 | .53298 | .52426 | .51578 | .50751 | .49946 | .49161 | .48397 | .47652 | .46926 |
| 74 | .55714 | .54832 | .53972 | .53134 | .52317 | .51520 | .50744 | .49986 | .49247 | .48527 |
| 75 | .57250 | .56382 | .55536 | .54710 | .53904 | .53118 | .52351 | .51601 | .50870 | .50156 |
| 76 | .58803 | .57951 | .57120 | .56308 | .55515 | .54740 | .53984 | .53245 | .52522 | .51817 |
| 77 | .60369 | .59535 | .58720 | .57923 | .57144 | .56383 | .55639 | .54912 | .54200 | .53504 |
| 78 | .61942 | .61126 | .60329 | .59549 | .58787 | .58040 | .57310 | .56596 | .55896 | .55212 |
| 79 | .63508 | .62713 | .61935 | .61174 | .60428 | .59698 | .58983 | .58283 | .57597 | .56925 |
| 80 | .65059 | .64285 | .63527 | .62785 | .62058 | .61345 | .60646 | .59961 | .59290 | .58632 |
| 81 | .66579 | .65827 | .65090 | .64368 | .63659 | .62965 | .62283 | .61615 | .60959 | .60316 |
| 82 | .68061 | .67332 | .66616 | .65914 | .65226 | .64550 | .63886 | .63235 | .62595 | .61968 |
| 83 | .69499 | .68793 | .68099 | .67418 | .66749 | .66092 | .65447 | .64813 | .64191 | .63579 |
| 84 | .70896 | .70213 | .69541 | .68881 | .68233 | .67595 | .66969 | .66353 | .65748 | .65153 |
| 85 | .72256 | .71596 | .70947 | .70308 | .69681 | .69063 | .68456 | .67859 | .67271 | .66693 |
| 86 | .73569 | .72931 | .72305 | .71688 | .71081 | .70484 | .69896 | .69318 | .68748 | .68188 |
| 87 | .74818 | .74204 | .73599 | .73003 | .72417 | .71839 | .71271 | .70711 | .70159 | .69616 |
| 88 | .76011 | .75419 | .74836 | .74261 | .73695 | .73137 | .72588 | .72046 | .71512 | .70986 |
| 89 | .77169 | .76599 | .76037 | .75484 | .74938 | .74400 | .73870 | .73347 | .72831 | .72323 |
| 90 | .78302 | .77755 | .77215 | .76683 | .76158 | .75640 | .75129 | .74625 | .74128 | .73638 |
| 91 | .79395 | .78870 | .78352 | .77842 | .77337 | .76840 | .76349 | .75864 | .75385 | .74913 |
| 92 | .80423 | .79920 | .79423 | .78933 | .78449 | .77971 | .77499 | .77033 | .76572 | .76118 |
| 93 | .81377 | .80894 | .80417 | .79946 | .79481 | .79022 | .78568 | .78120 | .77677 | .77239 |
| 94 | .82247 | .81784 | .81325 | .80873 | .80425 | .79983 | .79547 | .79115 | .78688 | .78266 |
| 95 | .83033 | .82586 | .82145 | .81709 | .81278 | .80852 | .80431 | .80014 | .79602 | .79195 |
| 96 | .83729 | .83298 | .82872 | .82451 | .82034 | .81622 | .81215 | .80812 | .80414 | .80019 |
| 97 | .84361 | .83944 | .83532 | .83124 | .82721 | .82322 | .81927 | .81537 | .81151 | .80769 |
| 98 | .84929 | .84525 | .84126 | .83730 | .83339 | .82952 | .82569 | .82190 | .81815 | .81443 |
| 99 | .85454 | .85062 | .84674 | .84290 | .83910 | .83534 | .83161 | .82792 | .82427 | .82066 |
| 100 | .85942 | .85561 | .85184 | .84810 | .84440 | .84074 | .83711 | .83352 | .82997 | .82644 |
| 101 | .86408 | .86037 | .85670 | .85306 | .84946 | .84589 | .84236 | .83886 | .83539 | .83196 |
| 102 | .86894 | .86534 | .86177 | .85823 | .85473 | .85126 | .84782 | .84442 | .84104 | .83770 |
| 103 | .87408 | .87060 | .86714 | .86371 | .86032 | .85695 | .85362 | .85031 | .84703 | .84378 |
| 104 | .87980 | .87644 | .87311 | .86980 | .86653 | .86328 | .86005 | .85686 | .85369 | .85054 |
| 105 | .88684 | .88363 | .88046 | .87731 | .87418 | .87108 | .86800 | .86494 | .86191 | .85890 |
| 106 | .89685 | .89389 | .89095 | .88804 | .88514 | .88226 | .87940 | .87656 | .87374 | .87094 |
| 107 | .91117 | .90858 | .90600 | .90344 | .90089 | .89836 | .89584 | .89334 | .89085 | .88838 |
| 108 | .93414 | .93217 | .93022 | .92828 | .92634 | .92442 | .92250 | .92060 | .91870 | .91681 |
| 109 | .97081 | .96992 | .96904 | .96816 | .96729 | .96642 | .96555 | .96468 | .96382 | .96296 |
Table S—Based on Life Table 80CNSMT Single Life Remainder Factors
[Applicable After April 30, 1989, and Before May 1, 1999]
| Age | Interest rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 8.2% | 8.4% | 8.6% | 8.8% | 9.0% | 9.2% | 9.4% | 9.6% | 9.8% | 10.0% | |
| 0 | .02341 | .02276 | .02217 | .02163 | .02114 | .02069 | .02027 | .01989 | .01954 | .01922 |
| 1 | .01237 | .01170 | .01108 | .01052 | .01000 | .00953 | .00910 | .00871 | .00834 | .00801 |
| 2 | .01243 | .01172 | .01107 | .01048 | .00994 | .00944 | .00899 | .00857 | .00819 | .00784 |
| 3 | .01278 | .01203 | .01135 | .01073 | .01016 | .00964 | .00916 | .00872 | .00832 | .00795 |
| 4 | .01332 | .01253 | .01182 | .01116 | .01056 | .01001 | .00951 | .00904 | .00862 | .00822 |
| 5 | .01400 | .01317 | .01241 | .01172 | .01109 | .01051 | .00998 | .00949 | .00904 | .00862 |
| 6 | .01477 | .01390 | .01310 | .01238 | .01171 | .01110 | .01054 | .01002 | .00954 | .00910 |
| 7 | .01563 | .01472 | .01389 | .01312 | .01242 | .01178 | .01118 | .01064 | .01013 | .00966 |
| 8 | .01660 | .01564 | .01477 | .01396 | .01322 | .01254 | .01192 | .01134 | .01081 | .01031 |
| 9 | .01770 | .01669 | .01577 | .01492 | .01414 | .01342 | .01276 | .01216 | .01159 | .01107 |
| 10 | .01891 | .01785 | .01688 | .01599 | .01517 | .01442 | .01372 | .01308 | .01249 | .01194 |
| 11 | .02026 | .01915 | .01814 | .01720 | .01634 | .01555 | .01481 | .01414 | .01351 | .01293 |
| 12 | .02173 | .02056 | .01950 | .01852 | .01761 | .01678 | .01601 | .01529 | .01463 | .01402 |
| 13 | .02326 | .02204 | .02092 | .01989 | .01895 | .01807 | .01726 | .01651 | .01582 | .01517 |
| 14 | .02478 | .02351 | .02234 | .02126 | .02027 | .01935 | .01850 | .01771 | .01698 | .01630 |
| 15 | .02628 | .02495 | .02372 | .02259 | .02155 | .02058 | .01969 | .01886 | .01810 | .01738 |
| 16 | .02774 | .02635 | .02507 | .02388 | .02279 | .02178 | .02084 | .01997 | .01917 | .01842 |
| 17 | .02917 | .02772 | .02637 | .02513 | .02399 | .02293 | .02194 | .02103 | .02018 | .01940 |
| 18 | .03059 | .02907 | .02767 | .02637 | .02517 | .02406 | .02302 | .02207 | .02118 | .02035 |
| 19 | .03205 | .03046 | .02899 | .02763 | .02637 | .02521 | .02412 | .02312 | .02218 | .02131 |
| 20 | .03355 | .03188 | .03035 | .02892 | .02760 | .02638 | .02524 | .02419 | .02320 | .02229 |
| 21 | .03509 | .03334 | .03173 | .03024 | .02886 | .02758 | .02638 | .02527 | .02424 | .02328 |
| 22 | .03669 | .03487 | .03318 | .03162 | .03017 | .02882 | .02757 | .02640 | .02532 | .02430 |
| 23 | .03837 | .03646 | .03470 | .03306 | .03154 | .03013 | .02881 | .02759 | .02644 | .02538 |
| 24 | .04018 | .03819 | .03634 | .03463 | .03303 | .03155 | .03016 | .02888 | .02767 | .02655 |
| 25 | .04214 | .04006 | .03812 | .03633 | .03465 | .03309 | .03164 | .03029 | .02902 | .02784 |
| 26 | .04428 | .04210 | .04008 | .03820 | .03644 | .03481 | .03328 | .03186 | .03052 | .02928 |
| 27 | .04662 | .04434 | .04223 | .04025 | .03841 | .03670 | .03509 | .03360 | .03219 | .03088 |
| 28 | .04915 | .04677 | .04456 | .04249 | .04056 | .03876 | .03708 | .03550 | .03403 | .03264 |
| 29 | .05189 | .04941 | .04709 | .04493 | .04291 | .04102 | .03925 | .03760 | .03604 | .03458 |
| 30 | .05485 | .05226 | .04984 | .04757 | .04546 | .04348 | .04162 | .03988 | .03825 | .03671 |
| 31 | .05805 | .05535 | .05282 | .05045 | .04824 | .04616 | .04421 | .04238 | .04067 | .03905 |
| 32 | .06149 | .05867 | .05603 | .05356 | .05124 | .04906 | .04702 | .04510 | .04329 | .04160 |
| 33 | .06520 | .06226 | .05950 | .05692 | .05449 | .05221 | .05007 | .04806 | .04616 | .04438 |
| 34 | .06916 | .06609 | .06322 | .06052 | .05799 | .05560 | .05336 | .05125 | .04926 | .04738 |
| 35 | .07339 | .07020 | .06720 | .06439 | .06174 | .05925 | .05690 | .05469 | .05260 | .05063 |
| 36 | .07787 | .07455 | .07143 | .06850 | .06573 | .06313 | .06068 | .05836 | .05617 | .05411 |
| 37 | .08262 | .07917 | .07593 | .07287 | .06999 | .06727 | .06470 | .06228 | .05999 | .05783 |
| 38 | .08765 | .08407 | .08069 | .07751 | .07451 | .07167 | .06899 | .06646 | .06407 | .06180 |
| 39 | .09296 | .08925 | .08574 | .08243 | .07931 | .07635 | .07356 | .07092 | .06841 | .06604 |
| 40 | .09858 | .09472 | .09109 | .08765 | .08440 | .08132 | .07841 | .07565 | .07303 | .07055 |
| 41 | .10449 | .10050 | .09673 | .09316 | .08978 | .08658 | .08355 | .08067 | .07794 | .07535 |
| 42 | .11069 | .10656 | .10265 | .09895 | .09544 | .09212 | .08896 | .08596 | .08312 | .08041 |
| 43 | .11718 | .11291 | .10887 | .10503 | .10140 | .09794 | .09466 | .09154 | .08858 | .08576 |
| 44 | .12399 | .11958 | .11540 | .11143 | .10766 | .10407 | .10067 | .09743 | .09434 | .09141 |
| 45 | .13111 | .12656 | .12224 | .11814 | .11423 | .11052 | .10699 | .10362 | .10042 | .09736 |
| 46 | .13856 | .13387 | .12941 | .12516 | .12113 | .11728 | .11362 | .11013 | .10680 | .10363 |
| 47 | .14633 | .14150 | .13690 | .13252 | .12835 | .12438 | .12059 | .11697 | .11352 | .11022 |
| 48 | .15442 | .14945 | .14471 | .14020 | .13589 | .13179 | .12787 | .12412 | .12055 | .11713 |
| 49 | .16280 | .15769 | .15281 | .14816 | .14373 | .13949 | .13544 | .13157 | .12787 | .12433 |
| 50 | .17147 | .16622 | .16121 | .15643 | .15186 | .14749 | .14331 | .13931 | .13548 | .13182 |
| 51 | .18045 | .17507 | .16993 | .16501 | .16030 | .15580 | .15150 | .14737 | .14342 | .13963 |
| 52 | .18979 | .18427 | .17899 | .17394 | .16911 | .16448 | .16004 | .15579 | .15172 | .14780 |
| 53 | .19947 | .19383 | .18842 | .18324 | .17828 | .17352 | .16896 | .16458 | .16038 | .15635 |
| 54 | .20950 | .20372 | .19819 | .19288 | .18779 | .18291 | .17822 | .17372 | .16940 | .16524 |
| 55 | .21986 | .21397 | .20831 | .20288 | .19767 | .19266 | .18785 | .18322 | .17878 | .17450 |
| 56 | .23058 | .22457 | .21879 | .21324 | .20791 | .20278 | .19785 | .19310 | .18854 | .18414 |
| 57 | .24167 | .23554 | .22965 | .22399 | .21854 | .21329 | .20824 | .20338 | .19870 | .19419 |
| 58 | .25314 | .24690 | .24090 | .23512 | .22956 | .22420 | .21904 | .21407 | .20927 | .20464 |
| 59 | .26497 | .25863 | .25252 | .24664 | .24097 | .23550 | .23023 | .22515 | .22024 | .21551 |
| 60 | .27712 | .27068 | .26448 | .25849 | .25272 | .24716 | .24178 | .23659 | .23158 | .22674 |
| 61 | .28956 | .28304 | .27674 | .27067 | .26480 | .25913 | .25366 | .24837 | .24325 | .23831 |
| 62 | .30228 | .29567 | .28929 | .28312 | .27717 | .27141 | .26584 | .26045 | .25524 | .25020 |
| 63 | .31525 | .30857 | .30211 | .29586 | .28982 | .28397 | .27832 | .27284 | .26754 | .26240 |
| 64 | .32851 | .32176 | .31522 | .30890 | .30278 | .29685 | .29111 | .28555 | .28016 | .27493 |
| 65 | .34209 | .33528 | .32868 | .32229 | .31610 | .31010 | .30429 | .29865 | .29317 | .28787 |
| 66 | .35604 | .34918 | .34253 | .33609 | .32983 | .32377 | .31788 | .31217 | .30663 | .30124 |
| 67 | .37037 | .36347 | .35678 | .35028 | .34398 | .33786 | .33191 | .32614 | .32053 | .31508 |
| 68 | .38508 | .37815 | .37142 | .36489 | .35854 | .35237 | .34638 | .34055 | .33488 | .32937 |
| 69 | .40008 | .39313 | .38638 | .37982 | .37344 | .36724 | .36120 | .35533 | .34961 | .34405 |
| 70 | .41533 | .40838 | .40162 | .39504 | .38864 | .38241 | .37634 | .37043 | .36468 | .35907 |
| 71 | .43076 | .42382 | .41705 | .41047 | .40405 | .39780 | .39171 | .38578 | .38000 | .37436 |
| 72 | .44638 | .43945 | .43269 | .42611 | .41969 | .41344 | .40733 | .40138 | .39558 | .38991 |
| 73 | .46218 | .45527 | .44854 | .44197 | .43556 | .42931 | .42321 | .41725 | .41143 | .40575 |
| 74 | .47823 | .47137 | .46466 | .45812 | .45173 | .44549 | .43940 | .43345 | .42763 | .42195 |
| 75 | .49459 | .48777 | .48112 | .47462 | .46826 | .46205 | .45598 | .45004 | .44424 | .43856 |
| 76 | .51127 | .50452 | .49793 | .49148 | .48517 | .47900 | .47297 | .46706 | .46129 | .45563 |
| 77 | .52823 | .52157 | .51505 | .50867 | .50243 | .49632 | .49033 | .48447 | .47873 | .47311 |
| 78 | .54541 | .53885 | .53242 | .52613 | .51996 | .51392 | .50800 | .50220 | .49652 | .49094 |
| 79 | .56267 | .55621 | .54989 | .54369 | .53762 | .53166 | .52582 | .52009 | .51448 | .50897 |
| 80 | .57987 | .57354 | .56733 | .56125 | .55527 | .54941 | .54366 | .53802 | .53248 | .52705 |
| 81 | .59685 | .59065 | .58457 | .57860 | .57274 | .56699 | .56134 | .55579 | .55035 | .54499 |
| 82 | .61351 | .60746 | .60151 | .59567 | .58993 | .58429 | .57875 | .57331 | .56796 | .56270 |
| 83 | .62978 | .62387 | .61806 | .61236 | .60675 | .60123 | .59581 | .59047 | .58523 | .58007 |
| 84 | .64567 | .63992 | .63426 | .62869 | .62321 | .61783 | .61253 | .60731 | .60218 | .59713 |
| 85 | .66125 | .65565 | .65014 | .64472 | .63938 | .63413 | .62896 | .62387 | .61886 | .61392 |
| 86 | .67636 | .67092 | .66557 | .66030 | .65511 | .65000 | .64496 | .64000 | .63511 | .63030 |
| 87 | .69081 | .68554 | .68034 | .67522 | .67018 | .66520 | .66031 | .65548 | .65071 | .64602 |
| 88 | .70468 | .69957 | .69453 | .68956 | .68466 | .67983 | .67507 | .67037 | .66574 | .66117 |
| 89 | .71821 | .71326 | .70838 | .70357 | .69882 | .69414 | .68952 | .68495 | .68045 | .67601 |
| 90 | .73153 | .72676 | .72204 | .71739 | .71280 | .70827 | .70379 | .69938 | .69502 | .69071 |
| 91 | .74447 | .73986 | .73532 | .73083 | .72640 | .72202 | .71770 | .71343 | .70921 | .70504 |
| 92 | .75669 | .75225 | .74787 | .74354 | .73927 | .73504 | .73087 | .72674 | .72267 | .71864 |
| 93 | .76807 | .76379 | .75957 | .75540 | .75127 | .74719 | .74317 | .73918 | .73524 | .73135 |
| 94 | .77849 | .77437 | .77030 | .76627 | .76229 | .75835 | .75446 | .75061 | .74680 | .74303 |
| 95 | .78792 | .78394 | .78001 | .77611 | .77226 | .76845 | .76468 | .76096 | .75727 | .75362 |
| 96 | .79630 | .79244 | .78863 | .78485 | .78112 | .77742 | .77377 | .77015 | .76657 | .76303 |
| 97 | .80391 | .80016 | .79646 | .79280 | .78917 | .78559 | .78203 | .77852 | .77504 | .77160 |
| 98 | .81076 | .80712 | .80352 | .79996 | .79643 | .79294 | .78948 | .78606 | .78267 | .77931 |
| 99 | .81709 | .81354 | .81004 | .80657 | .80313 | .79972 | .79635 | .79302 | .78971 | .78644 |
| 100 | .82296 | .81950 | .81609 | .81270 | .80934 | .80602 | .80273 | .79947 | .79624 | .79304 |
| 101 | .82855 | .82518 | .82185 | .81854 | .81526 | .81201 | .80880 | .80561 | .80245 | .79932 |
| 102 | .83438 | .83110 | .82785 | .82462 | .82142 | .81826 | .81512 | .81200 | .80892 | .80586 |
| 103 | .84056 | .83737 | .83420 | .83106 | .82795 | .82487 | .82181 | .81878 | .81577 | .81279 |
| 104 | .84743 | .84433 | .84127 | .83822 | .83521 | .83221 | .82924 | .82630 | .82338 | .82048 |
| 105 | .85591 | .85295 | .85001 | .84709 | .84419 | .84132 | .83846 | .83563 | .83282 | .83003 |
| 106 | .86816 | .86540 | .86266 | .85993 | .85723 | .85454 | .85187 | .84922 | .84659 | .84397 |
| 107 | .88592 | .88348 | .88105 | .87863 | .87623 | .87384 | .87147 | .86911 | .86676 | .86443 |
| 108 | .91493 | .91306 | .91119 | .90934 | .90749 | .90566 | .90383 | .90201 | .90020 | .89840 |
| 109 | .96211 | .96125 | .96041 | .95956 | .95872 | .95788 | .95704 | .95620 | .95537 | .95455 |
Table S—Based on Life Table 80CNSMT Single Life Remainder Factors
[Applicable After April 30, 1989, Before May 1, 1999]
| Age | Interest rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 10.2% | 10.4% | 10.6% | 10.8% | 11.0% | 11.2% | 11.4% | 11.6% | 11.8% | 12.0% | |
| 0 | .01891 | .01864 | .01838 | .01814 | .01791 | .01770 | .01750 | .01732 | .01715 | .01698 |
| 1 | .00770 | .00741 | .00715 | .00690 | .00667 | .00646 | .00626 | .00608 | .00590 | .00574 |
| 2 | .00751 | .00721 | .00693 | .00667 | .00643 | .00620 | .00600 | .00580 | .00562 | .00544 |
| 3 | .00760 | .00728 | .00699 | .00671 | .00646 | .00622 | .00600 | .00579 | .00560 | .00541 |
| 4 | .00786 | .00752 | .00721 | .00692 | .00665 | .00639 | .00616 | .00594 | .00573 | .00554 |
| 5 | .00824 | .00788 | .00755 | .00724 | .00695 | .00668 | .00643 | .00620 | .00598 | .00578 |
| 6 | .00869 | .00832 | .00796 | .00764 | .00733 | .00705 | .00678 | .00654 | .00630 | .00608 |
| 7 | .00923 | .00883 | .00846 | .00811 | .00779 | .00749 | .00720 | .00694 | .00669 | .00646 |
| 8 | .00986 | .00943 | .00904 | .00867 | .00833 | .00801 | .00771 | .00743 | .00716 | .00692 |
| 9 | .01059 | .01014 | .00972 | .00933 | .00897 | .00863 | .00831 | .00801 | .00773 | .00747 |
| 10 | .01142 | .01095 | .01051 | .01009 | .00971 | .00935 | .00901 | .00869 | .00840 | .00812 |
| 11 | .01239 | .01189 | .01142 | .01098 | .01057 | .01019 | .00983 | .00950 | .00918 | .00889 |
| 12 | .01345 | .01292 | .01243 | .01197 | .01154 | .01113 | .01075 | .01040 | .01007 | .00975 |
| 13 | .01457 | .01401 | .01349 | .01300 | .01255 | .01212 | .01172 | .01135 | .01100 | .01067 |
| 14 | .01567 | .01508 | .01453 | .01402 | .01354 | .01309 | .01267 | .01227 | .01190 | .01155 |
| 15 | .01672 | .01610 | .01552 | .01498 | .01448 | .01400 | .01356 | .01314 | .01275 | .01238 |
| 16 | .01772 | .01707 | .01646 | .01589 | .01536 | .01486 | .01439 | .01396 | .01354 | .01315 |
| 17 | .01866 | .01798 | .01734 | .01674 | .01618 | .01566 | .01516 | .01470 | .01427 | .01386 |
| 18 | .01958 | .01886 | .01818 | .01755 | .01697 | .01641 | .01590 | .01541 | .01495 | .01452 |
| 19 | .02050 | .01974 | .01903 | .01837 | .01775 | .01717 | .01662 | .01611 | .01563 | .01517 |
| 20 | .02143 | .02064 | .01989 | .01919 | .01854 | .01793 | .01735 | .01681 | .01630 | .01582 |
| 21 | .02238 | .02154 | .02075 | .02002 | .01933 | .01868 | .01807 | .01750 | .01696 | .01646 |
| 22 | .02336 | .02247 | .02164 | .02087 | .02014 | .01946 | .01882 | .01821 | .01764 | .01711 |
| 23 | .02438 | .02345 | .02257 | .02176 | .02099 | .02027 | .01959 | .01895 | .01835 | .01778 |
| 24 | .02550 | .02451 | .02359 | .02273 | .02192 | .02115 | .02044 | .01976 | .01913 | .01853 |
| 25 | .02673 | .02569 | .02472 | .02381 | .02295 | .02214 | .02138 | .02067 | .01999 | .01936 |
| 26 | .02811 | .02701 | .02598 | .02502 | .02411 | .02326 | .02246 | .02170 | .02098 | .02031 |
| 27 | .02965 | .02849 | .02741 | .02639 | .02543 | .02452 | .02367 | .02287 | .02211 | .02140 |
| 28 | .03134 | .03013 | .02898 | .02790 | .02689 | .02593 | .02503 | .02418 | .02338 | .02262 |
| 29 | .03322 | .03193 | .03072 | .02958 | .02851 | .02750 | .02654 | .02564 | .02479 | .02398 |
| 30 | .03527 | .03391 | .03264 | .03143 | .03030 | .02923 | .02821 | .02726 | .02635 | .02550 |
| 31 | .03753 | .03610 | .03475 | .03348 | .03228 | .03115 | .03008 | .02907 | .02811 | .02720 |
| 32 | .04000 | .03849 | .03707 | .03573 | .03446 | .03326 | .03213 | .03105 | .03004 | .02907 |
| 33 | .04269 | .04111 | .03961 | .03819 | .03685 | .03558 | .03438 | .03325 | .03217 | .03115 |
| 34 | .04561 | .04394 | .04236 | .04087 | .03946 | .03812 | .03685 | .03565 | .03451 | .03342 |
| 35 | .04877 | .04702 | .04535 | .04378 | .04229 | .04087 | .03953 | .03826 | .03706 | .03591 |
| 36 | .05215 | .05031 | .04856 | .04690 | .04533 | .04384 | .04242 | .04108 | .03980 | .03859 |
| 37 | .05578 | .05384 | .05200 | .05025 | .04860 | .04703 | .04553 | .04411 | .04276 | .04148 |
| 38 | .05965 | .05761 | .05568 | .05385 | .05211 | .05045 | .04888 | .04738 | .04595 | .04460 |
| 39 | .06379 | .06165 | .05962 | .05770 | .05587 | .05412 | .05247 | .05089 | .04939 | .04795 |
| 40 | .06820 | .06596 | .06383 | .06181 | .05989 | .05806 | .05631 | .05465 | .05307 | .05155 |
| 41 | .07288 | .07054 | .06832 | .06620 | .06418 | .06226 | .06042 | .05868 | .05701 | .05541 |
| 42 | .07784 | .07539 | .07306 | .07085 | .06873 | .06671 | .06479 | .06295 | .06119 | .05952 |
| 43 | .08308 | .08052 | .07808 | .07576 | .07355 | .07143 | .06941 | .06748 | .06564 | .06387 |
| 44 | .08861 | .08594 | .08340 | .08097 | .07865 | .07644 | .07432 | .07230 | .07036 | .06851 |
| 45 | .09445 | .09167 | .08901 | .08648 | .08406 | .08174 | .07953 | .07741 | .07538 | .07343 |
| 46 | .10060 | .09770 | .09494 | .09230 | .08977 | .08735 | .08503 | .08281 | .08068 | .07865 |
| 47 | .10707 | .10406 | .10119 | .09843 | .09579 | .09327 | .09085 | .08853 | .08630 | .08417 |
| 48 | .11386 | .11073 | .10774 | .10487 | .10213 | .09949 | .09697 | .09455 | .09222 | .08999 |
| 49 | .12094 | .11769 | .11458 | .11160 | .10874 | .10600 | .10337 | .10084 | .09842 | .09609 |
| 50 | .12831 | .12494 | .12172 | .11862 | .11565 | .11280 | .11006 | .10743 | .10490 | .10247 |
| 51 | .13600 | .13251 | .12917 | .12596 | .12288 | .11991 | .11706 | .11432 | .11169 | .10915 |
| 52 | .14405 | .14044 | .13698 | .13366 | .13046 | .12738 | .12442 | .12157 | .11883 | .11619 |
| 53 | .15247 | .14875 | .14517 | .14172 | .13841 | .13522 | .13215 | .12919 | .12635 | .12360 |
| 54 | .16124 | .15740 | .15370 | .15014 | .14671 | .14341 | .14023 | .13717 | .13421 | .13136 |
| 55 | .17039 | .16642 | .16261 | .15893 | .15539 | .15198 | .14868 | .14551 | .14244 | .13948 |
| 56 | .17991 | .17583 | .17190 | .16811 | .16445 | .16092 | .15752 | .15423 | .15106 | .14799 |
| 57 | .18984 | .18564 | .18160 | .17769 | .17392 | .17029 | .16677 | .16338 | .16010 | .15692 |
| 58 | .20018 | .19587 | .19172 | .18770 | .18382 | .18007 | .17645 | .17295 | .16956 | .16628 |
| 59 | .21093 | .20652 | .20225 | .19812 | .19414 | .19028 | .18655 | .18294 | .17945 | .17606 |
| 60 | .22206 | .21753 | .21316 | .20893 | .20483 | .20087 | .19703 | .19332 | .18972 | .18624 |
| 61 | .23353 | .22890 | .22442 | .22009 | .21589 | .21182 | .20788 | .20407 | .20037 | .19678 |
| 62 | .24532 | .24059 | .23601 | .23158 | .22728 | .22311 | .21907 | .21515 | .21135 | .20767 |
| 63 | .25742 | .25260 | .24793 | .24339 | .23900 | .23473 | .23060 | .22658 | .22268 | .21890 |
| 64 | .26987 | .26495 | .26019 | .25556 | .25107 | .24671 | .24248 | .23837 | .23438 | .23050 |
| 65 | .28271 | .27771 | .27286 | .26815 | .26357 | .25912 | .25480 | .25059 | .24651 | .24254 |
| 66 | .29601 | .29093 | .28600 | .28120 | .27654 | .27200 | .26760 | .26331 | .25913 | .25507 |
| 67 | .30978 | .30462 | .29961 | .29474 | .29000 | .28539 | .28090 | .27653 | .27227 | .26813 |
| 68 | .32401 | .31879 | .31371 | .30877 | .30396 | .29927 | .29471 | .29027 | .28593 | .28171 |
| 69 | .33863 | .33336 | .32822 | .32322 | .31835 | .31359 | .30896 | .30445 | .30005 | .29576 |
| 70 | .35361 | .34829 | .34310 | .33804 | .33311 | .32830 | .32361 | .31903 | .31457 | .31021 |
| 71 | .36886 | .36349 | .35826 | .35316 | .34818 | .34332 | .33858 | .33394 | .32942 | .32500 |
| 72 | .38439 | .37899 | .37373 | .36858 | .36356 | .35866 | .35387 | .34919 | .34461 | .34015 |
| 73 | .40021 | .39479 | .38950 | .38432 | .37927 | .37433 | .36950 | .36478 | .36016 | .35565 |
| 74 | .41639 | .41096 | .40565 | .40046 | .39538 | .39042 | .38556 | .38081 | .37616 | .37161 |
| 75 | .43301 | .42758 | .42226 | .41706 | .41198 | .40699 | .40212 | .39734 | .39267 | .38809 |
| 76 | .45009 | .44467 | .43937 | .43417 | .42908 | .42410 | .41921 | .41443 | .40974 | .40514 |
| 77 | .46761 | .46221 | .45693 | .45175 | .44667 | .44170 | .43682 | .43203 | .42734 | .42274 |
| 78 | .48548 | .48013 | .47488 | .46973 | .46468 | .45972 | .45486 | .45009 | .44541 | .44082 |
| 79 | .50356 | .49826 | .49306 | .48795 | .48294 | .47802 | .47319 | .46845 | .46379 | .45922 |
| 80 | .52171 | .51647 | .51133 | .50628 | .50132 | .49644 | .49166 | .48695 | .48233 | .47779 |
| 81 | .53974 | .53457 | .52950 | .52451 | .51961 | .51479 | .51006 | .50541 | .50083 | .49633 |
| 82 | .55753 | .55245 | .54745 | .54254 | .53771 | .53296 | .52828 | .52369 | .51917 | .51472 |
| 83 | .57500 | .57001 | .56510 | .56026 | .55551 | .55083 | .54623 | .54170 | .53724 | .53285 |
| 84 | .59216 | .58726 | .58245 | .57770 | .57304 | .56844 | .56391 | .55945 | .55506 | .55074 |
| 85 | .60906 | .60428 | .59956 | .59492 | .59034 | .58583 | .58139 | .57702 | .57270 | .56845 |
| 86 | .62555 | .62088 | .61627 | .61173 | .60725 | .60284 | .59849 | .59420 | .58997 | .58580 |
| 87 | .64139 | .63683 | .63233 | .62790 | .62352 | .61921 | .61495 | .61076 | .60661 | .60253 |
| 88 | .65666 | .65221 | .64783 | .64350 | .63923 | .63502 | .63086 | .62675 | .62270 | .61871 |
| 89 | .67163 | .66730 | .66304 | .65882 | .65466 | .65055 | .64650 | .64249 | .63854 | .63463 |
| 90 | .68646 | .68226 | .67812 | .67402 | .66998 | .66599 | .66204 | .65814 | .65430 | .65049 |
| 91 | .70093 | .69686 | .69285 | .68888 | .68496 | .68108 | .67725 | .67347 | .66973 | .66604 |
| 92 | .71466 | .71073 | .70684 | .70300 | .69920 | .69545 | .69173 | .68806 | .68444 | .68085 |
| 93 | .72750 | .72370 | .71994 | .71622 | .71254 | .70890 | .70530 | .70174 | .69822 | .69474 |
| 94 | .73931 | .73562 | .73198 | .72838 | .72481 | .72129 | .71780 | .71434 | .71093 | .70755 |
| 95 | .75001 | .74644 | .74291 | .73941 | .73595 | .73253 | .72914 | .72579 | .72247 | .71919 |
| 96 | .75953 | .75606 | .75262 | .74923 | .74586 | .74253 | .73924 | .73598 | .73275 | .72955 |
| 97 | .76819 | .76481 | .76147 | .75816 | .75489 | .75165 | .74844 | .74526 | .74211 | .73899 |
| 98 | .77599 | .77270 | .76944 | .76621 | .76302 | .75986 | .75672 | .75362 | .75054 | .74750 |
| 99 | .78319 | .77998 | .77680 | .77365 | .77053 | .76744 | .76437 | .76134 | .75833 | .75535 |
| 100 | .78987 | .78673 | .78362 | .78054 | .77748 | .77446 | .77146 | .76849 | .76555 | .76263 |
| 101 | .79622 | .79315 | .79010 | .78708 | .78409 | .78113 | .77819 | .77528 | .77239 | .76953 |
| 102 | .80283 | .79983 | .79685 | .79390 | .79097 | .78807 | .78519 | .78234 | .77951 | .77671 |
| 103 | .80983 | .80690 | .80399 | .80111 | .79825 | .79541 | .79260 | .78981 | .78705 | .78430 |
| 104 | .81760 | .81475 | .81192 | .80912 | .80633 | .80357 | .80083 | .79810 | .79541 | .79273 |
| 105 | .82726 | .82451 | .82178 | .81907 | .81638 | .81371 | .81106 | .80843 | .80582 | .80322 |
| 106 | .84137 | .83879 | .83623 | .83368 | .83115 | .82863 | .82614 | .82366 | .82119 | .81874 |
| 107 | .86211 | .85981 | .85751 | .85523 | .85297 | .85071 | .84847 | .84624 | .84403 | .84182 |
| 108 | .89660 | .89481 | .89304 | .89127 | .88950 | .88775 | .88601 | .88427 | .88254 | .88081 |
| 109 | .95372 | .95290 | .95208 | .95126 | .95045 | .94964 | .94883 | .94803 | .94723 | .94643 |
Table S—Based on Life Table 80CNSMT Single Life Remainder Factors
[Applicable After April 30, 1989, and Before May 1, 1999]
| Age | Interest rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 12.2% | 12.4% | 12.6% | 12.8% | 13.0% | 13.2% | 13.4% | 13.6% | 13.8% | 14.0% | |
| 0 | .01683 | .01669 | .01655 | .01642 | .01630 | .01618 | .01607 | .01596 | .01586 | .01576 |
| 1 | .00559 | .00544 | .00531 | .00518 | .00506 | .00494 | .00484 | .00473 | .00464 | .00454 |
| 2 | .00528 | .00513 | .00499 | .00485 | .00473 | .00461 | .00449 | .00439 | .00428 | .00419 |
| 3 | .00524 | .00508 | .00493 | .00479 | .00465 | .00453 | .00441 | .00429 | .00419 | .00408 |
| 4 | .00536 | .00519 | .00503 | .00488 | .00473 | .00460 | .00447 | .00435 | .00423 | .00412 |
| 5 | .00558 | .00540 | .00523 | .00507 | .00492 | .00477 | .00464 | .00451 | .00439 | .00427 |
| 6 | .00588 | .00569 | .00550 | .00533 | .00517 | .00502 | .00487 | .00473 | .00460 | .00448 |
| 7 | .00624 | .00604 | .00584 | .00566 | .00549 | .00532 | .00517 | .00502 | .00488 | .00475 |
| 8 | .00668 | .00646 | .00626 | .00606 | .00588 | .00570 | .00554 | .00538 | .00523 | .00509 |
| 9 | .00722 | .00699 | .00677 | .00656 | .00636 | .00617 | .00600 | .00583 | .00567 | .00552 |
| 10 | .00785 | .00761 | .00737 | .00715 | .00694 | .00674 | .00655 | .00637 | .00620 | .00604 |
| 11 | .00861 | .00835 | .00810 | .00786 | .00764 | .00743 | .00723 | .00704 | .00686 | .00668 |
| 12 | .00946 | .00918 | .00891 | .00866 | .00843 | .00820 | .00799 | .00779 | .00760 | .00741 |
| 13 | .01035 | .01006 | .00978 | .00951 | .00927 | .00903 | .00880 | .00859 | .00839 | .00819 |
| 14 | .01122 | .01091 | .01061 | .01034 | .01007 | .00982 | .00958 | .00936 | .00914 | .00894 |
| 15 | .01203 | .01171 | .01140 | .01110 | .01082 | .01056 | .01031 | .01007 | .00985 | .00963 |
| 16 | .01279 | .01244 | .01211 | .01181 | .01151 | .01123 | .01097 | .01072 | .01048 | .01025 |
| 17 | .01347 | .01311 | .01276 | .01244 | .01213 | .01184 | .01156 | .01130 | .01104 | .01081 |
| 18 | .01411 | .01373 | .01336 | .01302 | .01270 | .01239 | .01210 | .01182 | .01155 | .01130 |
| 19 | .01474 | .01434 | .01396 | .01359 | .01325 | .01293 | .01262 | .01233 | .01205 | .01178 |
| 20 | .01537 | .01494 | .01454 | .01415 | .01379 | .01345 | .01313 | .01282 | .01252 | .01224 |
| 21 | .01598 | .01553 | .01510 | .01470 | .01432 | .01396 | .01361 | .01329 | .01298 | .01268 |
| 22 | .01660 | .01613 | .01568 | .01525 | .01485 | .01446 | .01410 | .01375 | .01343 | .01312 |
| 23 | .01725 | .01674 | .01627 | .01581 | .01539 | .01498 | .01460 | .01423 | .01388 | .01355 |
| 24 | .01796 | .01742 | .01692 | .01644 | .01599 | .01556 | .01515 | .01476 | .01439 | .01404 |
| 25 | .01876 | .01819 | .01765 | .01714 | .01666 | .01621 | .01577 | .01536 | .01497 | .01460 |
| 26 | .01967 | .01907 | .01850 | .01796 | .01745 | .01696 | .01650 | .01606 | .01565 | .01525 |
| 27 | .02072 | .02008 | .01948 | .01890 | .01836 | .01784 | .01735 | .01688 | .01644 | .01601 |
| 28 | .02190 | .02122 | .02057 | .01996 | .01938 | .01883 | .01831 | .01781 | .01734 | .01689 |
| 29 | .02322 | .02249 | .02181 | .02116 | .02054 | .01996 | .01940 | .01887 | .01836 | .01788 |
| 30 | .02469 | .02392 | .02319 | .02250 | .02184 | .02122 | .02062 | .02006 | .01952 | .01900 |
| 31 | .02634 | .02552 | .02475 | .02401 | .02331 | .02264 | .02201 | .02140 | .02083 | .02028 |
| 32 | .02816 | .02729 | .02647 | .02568 | .02494 | .02423 | .02355 | .02291 | .02229 | .02170 |
| 33 | .03018 | .02926 | .02838 | .02755 | .02675 | .02600 | .02528 | .02459 | .02393 | .02331 |
| 34 | .03239 | .03142 | .03048 | .02960 | .02875 | .02795 | .02718 | .02645 | .02575 | .02508 |
| 35 | .03482 | .03378 | .03279 | .03185 | .03095 | .03009 | .02928 | .02850 | .02775 | .02704 |
| 36 | .03743 | .03633 | .03528 | .03428 | .03333 | .03242 | .03155 | .03072 | .02992 | .02916 |
| 37 | .04026 | .03909 | .03798 | .03692 | .03591 | .03494 | .03401 | .03313 | .03228 | .03147 |
| 38 | .04330 | .04207 | .04089 | .03977 | .03869 | .03767 | .03668 | .03574 | .03484 | .03398 |
| 39 | .04658 | .04528 | .04403 | .04284 | .04170 | .04061 | .03957 | .03857 | .03762 | .03670 |
| 40 | .05011 | .04873 | .04741 | .04615 | .04495 | .04379 | .04269 | .04163 | .04061 | .03964 |
| 41 | .05389 | .05244 | .05104 | .04971 | .04844 | .04721 | .04604 | .04492 | .04384 | .04281 |
| 42 | .05791 | .05638 | .05491 | .05350 | .05216 | .05086 | .04962 | .04844 | .04729 | .04620 |
| 43 | .06219 | .06057 | .05902 | .05754 | .05612 | .05475 | .05344 | .05218 | .05098 | .04981 |
| 44 | .06673 | .06503 | .06340 | .06184 | .06034 | .05890 | .05752 | .05619 | .05491 | .05368 |
| 45 | .07157 | .06978 | .06806 | .06642 | .06484 | .06332 | .06186 | .06046 | .05911 | .05781 |
| 46 | .07669 | .07481 | .07301 | .07128 | .06962 | .06802 | .06649 | .06501 | .06358 | .06221 |
| 47 | .08212 | .08015 | .07826 | .07645 | .07470 | .07302 | .07140 | .06984 | .06834 | .06690 |
| 48 | .08784 | .08578 | .08380 | .08190 | .08006 | .07830 | .07660 | .07496 | .07338 | .07186 |
| 49 | .09384 | .09169 | .08961 | .08762 | .08570 | .08384 | .08206 | .08034 | .07868 | .07708 |
| 50 | .10013 | .09787 | .09570 | .09361 | .09160 | .08966 | .08779 | .08598 | .08424 | .08256 |
| 51 | .10671 | .10436 | .10209 | .09991 | .09780 | .09577 | .09381 | .09192 | .09009 | .08832 |
| 52 | .11365 | .11120 | .10883 | .10655 | .10435 | .10222 | .10017 | .09819 | .09628 | .09442 |
| 53 | .12095 | .11840 | .11593 | .11355 | .11126 | .10904 | .10689 | .10482 | .10282 | .10088 |
| 54 | .12860 | .12595 | .12338 | .12090 | .11851 | .11619 | .11396 | .11179 | .10970 | .10767 |
| 55 | .13663 | .13386 | .13120 | .12862 | .12613 | .12372 | .12138 | .11912 | .11694 | .11482 |
| 56 | .14503 | .14217 | .13940 | .13672 | .13413 | .13162 | .12919 | .12683 | .12456 | .12235 |
| 57 | .15385 | .15089 | .14801 | .14523 | .14254 | .13994 | .13741 | .13496 | .13259 | .13029 |
| 58 | .16311 | .16004 | .15706 | .15418 | .15139 | .14868 | .14606 | .14352 | .14105 | .13866 |
| 59 | .17279 | .16961 | .16654 | .16355 | .16066 | .15786 | .15514 | .15250 | .14994 | .14745 |
| 60 | .18286 | .17958 | .17640 | .17332 | .17033 | .16743 | .16462 | .16188 | .15922 | .15664 |
| 61 | .19330 | .18992 | .18665 | .18347 | .18038 | .17738 | .17447 | .17164 | .16889 | .16622 |
| 62 | .20409 | .20061 | .19724 | .19396 | .19078 | .18768 | .18467 | .18175 | .17891 | .17614 |
| 63 | .21522 | .21165 | .20818 | .20480 | .20152 | .19833 | .19523 | .19221 | .18928 | .18642 |
| 64 | .22672 | .22306 | .21949 | .21602 | .21265 | .20937 | .20617 | .20306 | .20003 | .19708 |
| 65 | .23867 | .23491 | .23125 | .22769 | .22423 | .22085 | .21757 | .21437 | .21125 | .20821 |
| 66 | .25112 | .24727 | .24353 | .23988 | .23632 | .23286 | .22948 | .22619 | .22299 | .21986 |
| 67 | .26409 | .26016 | .25633 | .25260 | .24896 | .24541 | .24195 | .23857 | .23528 | .23206 |
| 68 | .27760 | .27359 | .26968 | .26586 | .26214 | .25851 | .25497 | .25151 | .24814 | .24484 |
| 69 | .29157 | .28748 | .28350 | .27961 | .27581 | .27211 | .26849 | .26495 | .26150 | .25812 |
| 70 | .30596 | .30181 | .29775 | .29379 | .28992 | .28614 | .28245 | .27884 | .27532 | .27187 |
| 71 | .32069 | .31648 | .31236 | .30833 | .30440 | .30055 | .29679 | .29312 | .28952 | .28600 |
| 72 | .33578 | .33151 | .32733 | .32325 | .31925 | .31535 | .31152 | .30778 | .30412 | .30054 |
| 73 | .35123 | .34691 | .34269 | .33855 | .33450 | .33054 | .32666 | .32286 | .31914 | .31550 |
| 74 | .36715 | .36279 | .35852 | .35434 | .35024 | .34623 | .34230 | .33845 | .33468 | .33098 |
| 75 | .38360 | .37921 | .37491 | .37069 | .36656 | .36250 | .35853 | .35464 | .35082 | .34708 |
| 76 | .40064 | .39623 | .39190 | .38765 | .38349 | .37941 | .37540 | .37148 | .36762 | .36384 |
| 77 | .41823 | .41381 | .40947 | .40521 | .40103 | .39692 | .39290 | .38895 | .38507 | .38126 |
| 78 | .43632 | .43189 | .42755 | .42329 | .41910 | .41499 | .41095 | .40698 | .40309 | .39926 |
| 79 | .45473 | .45032 | .44599 | .44173 | .43755 | .43344 | .42940 | .42543 | .42153 | .41770 |
| 80 | .47333 | .46894 | .46463 | .46040 | .45623 | .45213 | .44811 | .44414 | .44025 | .43642 |
| 81 | .49191 | .48755 | .48328 | .47907 | .47493 | .47085 | .46684 | .46290 | .45902 | .45520 |
| 82 | .51034 | .50603 | .50179 | .49762 | .49351 | .48947 | .48549 | .48157 | .47772 | .47392 |
| 83 | .52852 | .52427 | .52008 | .51595 | .51189 | .50788 | .50394 | .50006 | .49623 | .49246 |
| 84 | .54648 | .54228 | .53815 | .53407 | .53006 | .52610 | .52221 | .51836 | .51458 | .51084 |
| 85 | .56426 | .56013 | .55606 | .55205 | .54810 | .54420 | .54035 | .53656 | .53282 | .52913 |
| 86 | .58169 | .57764 | .57364 | .56970 | .56581 | .56197 | .55818 | .55445 | .55076 | .54713 |
| 87 | .59850 | .59452 | .59060 | .58673 | .58291 | .57913 | .57541 | .57174 | .56811 | .56453 |
| 88 | .61476 | .61086 | .60702 | .60322 | .59947 | .59577 | .59212 | .58851 | .58494 | .58142 |
| 89 | .63078 | .62697 | .62321 | .61950 | .61583 | .61220 | .60862 | .60508 | .60159 | .59813 |
| 90 | .64674 | .64302 | .63935 | .63573 | .63215 | .62861 | .62511 | .62165 | .61823 | .61485 |
| 91 | .66238 | .65877 | .65520 | .65167 | .64819 | .64474 | .64133 | .63795 | .63462 | .63132 |
| 92 | .67730 | .67379 | .67032 | .66689 | .66350 | .66014 | .65682 | .65354 | .65029 | .64708 |
| 93 | .69130 | .68789 | .68452 | .68119 | .67789 | .67463 | .67140 | .66820 | .66504 | .66191 |
| 94 | .70421 | .70090 | .69762 | .69438 | .69118 | .68800 | .68486 | .68175 | .67867 | .67563 |
| 95 | .71594 | .71272 | .70954 | .70639 | .70326 | .70017 | .69712 | .69409 | .69109 | .68812 |
| 96 | .72638 | .72325 | .72014 | .71707 | .71403 | .71101 | .70803 | .70507 | .70215 | .69925 |
| 97 | .73590 | .73285 | .72982 | .72682 | .72385 | .72090 | .71799 | .71510 | .71224 | .70941 |
| 98 | .74448 | .74149 | .73853 | .73560 | .73269 | .72981 | .72696 | .72414 | .72134 | .71856 |
| 99 | .75240 | .74948 | .74658 | .74371 | .74086 | .73805 | .73525 | .73248 | .72974 | .72702 |
| 100 | .75974 | .75687 | .75403 | .75121 | .74842 | .74566 | .74292 | .74020 | .73751 | .73484 |
| 101 | .76669 | .76388 | .76109 | .75833 | .75559 | .75287 | .75018 | .74751 | .74486 | .74223 |
| 102 | .77393 | .77117 | .76844 | .76573 | .76304 | .76037 | .75773 | .75511 | .75251 | .74993 |
| 103 | .78158 | .77888 | .77620 | .77355 | .77091 | .76830 | .76571 | .76313 | .76058 | .75805 |
| 104 | .79007 | .78743 | .78482 | .78222 | .77964 | .77709 | .77455 | .77203 | .76953 | .76705 |
| 105 | .80065 | .79809 | .79556 | .79304 | .79054 | .78805 | .78559 | .78314 | .78071 | .77829 |
| 106 | .81631 | .81389 | .81149 | .80911 | .80674 | .80438 | .80204 | .79972 | .79741 | .79511 |
| 107 | .83963 | .83745 | .83529 | .83313 | .83099 | .82886 | .82674 | .82463 | .82254 | .82045 |
| 108 | .87910 | .87739 | .87569 | .87400 | .87232 | .87064 | .86897 | .86731 | .86566 | .86401 |
| 109 | .94563 | .94484 | .94405 | .94326 | .94248 | .94170 | .94092 | .94014 | .93937 | .93860 |
(f) Present value of the remainder interest in the case of transfers to pooled income funds for which the valuation date is after April 30, 1999, and before May 1, 2009—(1) In general. In the case of transfers to pooled income funds for which the valuation date is after April 30, 1999, and before May 1, 2009, the present value of a remainder interest is determined under this section. See, however, § 1.7520-3(b) (relating to exceptions to the use of prescribed tables under certain circumstances). The present value of a remainder interest that is dependent on the termination of the life of one individual is computed by the use of Table S in paragraph (f)(6) of this section. For purposes of the computations under this section, the age of an individual is the age at the individual’s nearest birthday.
(2) Transitional rules for valuation of transfers to pooled income funds. (i) For purposes of sections 2055, 2106, or 2624, if on May 1, 1999, the decedent was mentally incompetent so that the disposition of the property could not be changed, and the decedent died after April 30, 1999, without having regained competency to dispose of the decedent’s property, or the decedent died within 90 days of the date that the decedent first regained competency after April 30, 1999, the present value of a remainder interest is determined as if the valuation date with respect to the decedent’s gross estate is either before May 1, 1999, or after April 30, 1999, at the option of the decedent’s executor.
(ii) For purposes of sections 170, 2055, 2106, 2522, or 2624, in the case of transfers to a pooled income fund for which the valuation date is after April 30, 1999, and before July 1, 1999, the present value of the remainder interest under this section is determined by use of the section 7520 interest rate for the month in which the valuation date occurs (see §§ 1.7520-1(b) and 1.7520-2(a)(2)) and the appropriate actuarial tables under either paragraph (e)(5) or (f)(6) of this section, at the option of the donor or the decedent’s executor, as the case may be.
(iii) For purposes of paragraphs (f)(2)(i) and (f)(2)(ii) of this section, where the donor or decedent’s executor is given the option to use the appropriate actuarial tables under either paragraph (e)(5) or (f)(6) of this section, the donor or decedent’s executor must use the same actuarial table with respect to each individual transaction and with respect to all transfers occurring on the valuation date (for example, gift and income tax charitable deductions with respect to the same transfer must be determined based on the same tables, and all assets includible in the gross estate and/or estate tax deductions claimed must be valued based on the same tables).
(3) Present value of a remainder interest. The present value of a remainder interest in property transferred to a pooled income fund is computed on the basis of—
(i) Life contingencies determined from the values of lx that are set forth in Table 90CM in § 20.2031-7A(f)(4); and
(ii) Discount at a rate of interest, compounded annually, equal to the highest yearly rate of return of the pooled income fund for the 3 taxable years immediately preceding its taxable year in which the transfer of property to the fund is made. The provisions of § 1.642(c)-6(c) apply for determining the yearly rate of return. However, where the taxable year is less than 12 months, the provisions of § 1.642(c)-6(e)(3)(ii) apply for the determining the yearly rate of return.
(4) Pooled income funds in existence less than 3 taxable years. The provisions of § 1.642(c)-6(e)(4) apply for determining the highest yearly rate of return when the pooled income fund has been in existence less than 3 taxable years.
(5) Computation of value of remainder interest. The factor that is used in determining the present value of a remainder interest that is dependent on the termination of the life of one individual is the factor from Table S in paragraph (f)(6) of this section under the appropriate yearly rate of return opposite the number that corresponds to the age of the individual upon whose life the value of the remainder interest is based. Table S in paragraph (f)(6) of this section includes factors for yearly rates of return from 4.2 to 14 percent. Many actuarial factors not contained in Table S in paragraph (f)(6) of this section are contained in Table S in Internal Revenue Service Publication 1457, “Actuarial Values, Book Aleph,” (7-99). Publication 1457 is no longer available for purchase from the Superintendent of Documents, United States Government Printing Office. However, pertinent factors in this publication may be obtained by a written request to: CC:PA:LPD:PR (IRS Publication 1457), Room 5205, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. For other situations, see § 1.642(c)-6(b). If the yearly rate of return is a percentage that is between the yearly rates of return for which factors are provided, a linear interpolation must be made. The present value of the remainder interest is determined by multiplying the fair market value of the property on the valuation date by the appropriate remainder factor. For an example of a computation of the present value of a remainder interest requiring a linear interpolation adjustment, see § 1.642(c)-6(e)(5).
(6) Actuarial tables. In the case of transfers for which the valuation date is after April 30, 1999, and before May 1, 2009, the present value of a remainder interest dependent on the termination of one life in the case of a transfer to a pooled income fund is determined by use of the following tables:
Table S—Based on Life Table 90CM Single Life Remainder Factors
[Applicable After April 30, 1999, and Before May 1, 2009]
| Age | Interest rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 4.2% | 4.4% | 4.6% | 4.8% | 5.0% | 5.2% | 5.4% | 5.6% | 5.8% | 6.0% | |
| 0 | .06752 | .06130 | .05586 | .05109 | .04691 | .04322 | .03998 | .03711 | .03458 | .03233 |
| 1 | .06137 | .05495 | .04932 | .04438 | .04003 | .03620 | .03283 | .02985 | .02721 | .02487 |
| 2 | .06325 | .05667 | .05088 | .04580 | .04132 | .03737 | .03388 | .03079 | .02806 | .02563 |
| 3 | .06545 | .05869 | .05275 | .04752 | .04291 | .03883 | .03523 | .03203 | .02920 | .02668 |
| 4 | .06784 | .06092 | .05482 | .04944 | .04469 | .04048 | .03676 | .03346 | .03052 | .02791 |
| 5 | .07040 | .06331 | .05705 | .05152 | .04662 | .04229 | .03845 | .03503 | .03199 | .02928 |
| 6 | .07310 | .06583 | .05941 | .05372 | .04869 | .04422 | .04025 | .03672 | .03357 | .03076 |
| 7 | .07594 | .06849 | .06191 | .05607 | .05089 | .04628 | .04219 | .03854 | .03528 | .03236 |
| 8 | .07891 | .07129 | .06453 | .05853 | .05321 | .04846 | .04424 | .04046 | .03709 | .03407 |
| 9 | .08203 | .07423 | .06731 | .06115 | .05567 | .05079 | .04643 | .04253 | .03904 | .03592 |
| 10 | .08532 | .07734 | .07024 | .06392 | .05829 | .05326 | .04877 | .04474 | .04114 | .03790 |
| 11 | .08875 | .08059 | .07331 | .06683 | .06104 | .05587 | .05124 | .04709 | .04336 | .04002 |
| 12 | .09233 | .08398 | .07653 | .06989 | .06394 | .05862 | .05385 | .04957 | .04572 | .04226 |
| 13 | .09601 | .08748 | .07985 | .07304 | .06693 | .06146 | .05655 | .05214 | .04816 | .04458 |
| 14 | .09974 | .09102 | .08322 | .07624 | .06997 | .06435 | .05929 | .05474 | .05064 | .04694 |
| 15 | .10350 | .09460 | .08661 | .07946 | .07303 | .06725 | .06204 | .05735 | .05312 | .04930 |
| 16 | .10728 | .09818 | .09001 | .08268 | .07608 | .07014 | .06479 | .05996 | .05559 | .05164 |
| 17 | .11108 | .10179 | .09344 | .08592 | .07916 | .07306 | .06755 | .06257 | .05807 | .05399 |
| 18 | .11494 | .10545 | .09691 | .08921 | .08227 | .07601 | .07034 | .06521 | .06057 | .05636 |
| 19 | .11889 | .10921 | .10047 | .09259 | .08548 | .07904 | .07322 | .06794 | .06315 | .05880 |
| 20 | .12298 | .11310 | .10417 | .09610 | .08881 | .08220 | .07622 | .07078 | .06584 | .06135 |
| 21 | .12722 | .11713 | .10801 | .09976 | .09228 | .08550 | .07935 | .07375 | .06866 | .06403 |
| 22 | .13159 | .12130 | .11199 | .10354 | .09588 | .08893 | .08260 | .07685 | .07160 | .06682 |
| 23 | .13613 | .12563 | .11612 | .10748 | .09964 | .09250 | .08601 | .08009 | .07468 | .06975 |
| 24 | .14084 | .13014 | .12043 | .11160 | .10357 | .09625 | .08958 | .08349 | .07793 | .07284 |
| 25 | .14574 | .13484 | .12493 | .11591 | .10768 | .10018 | .09334 | .08708 | .08135 | .07611 |
| 26 | .15084 | .13974 | .12963 | .12041 | .11199 | .10431 | .09728 | .09085 | .08496 | .07956 |
| 27 | .15615 | .14485 | .13454 | .12513 | .11652 | .10865 | .10144 | .09484 | .08878 | .08322 |
| 28 | .16166 | .15016 | .13965 | .13004 | .12124 | .11319 | .10580 | .09901 | .09279 | .08706 |
| 29 | .16737 | .15567 | .14497 | .13516 | .12617 | .11792 | .11035 | .10339 | .09699 | .09109 |
| 30 | .17328 | .16138 | .15048 | .14047 | .13129 | .12286 | .11510 | .10796 | .10138 | .09532 |
| 31 | .17938 | .16728 | .15618 | .14599 | .13661 | .12799 | .12004 | .11272 | .10597 | .09974 |
| 32 | .18568 | .17339 | .16210 | .15171 | .14214 | .13333 | .12520 | .11769 | .11076 | .10435 |
| 33 | .19220 | .17972 | .16824 | .15766 | .14790 | .13889 | .13058 | .12289 | .11578 | .10920 |
| 34 | .19894 | .18627 | .17460 | .16383 | .15388 | .14468 | .13618 | .12831 | .12102 | .11426 |
| 35 | .20592 | .19307 | .18121 | .17025 | .16011 | .15073 | .14204 | .13399 | .12652 | .11958 |
| 36 | .21312 | .20010 | .18805 | .17691 | .16658 | .15701 | .14814 | .13990 | .13225 | .12514 |
| 37 | .22057 | .20737 | .19514 | .18382 | .17331 | .16356 | .15450 | .14608 | .13825 | .13096 |
| 38 | .22827 | .21490 | .20251 | .19100 | .18031 | .17038 | .16113 | .15253 | .14452 | .13705 |
| 39 | .23623 | .22270 | .21013 | .19845 | .18759 | .17747 | .16805 | .15927 | .15108 | .14344 |
| 40 | .24446 | .23078 | .21805 | .20620 | .19516 | .18487 | .17527 | .16631 | .15795 | .15013 |
| 41 | .25298 | .23915 | .22626 | .21425 | .20305 | .19259 | .18282 | .17368 | .16514 | .15715 |
| 42 | .26178 | .24782 | .23478 | .22262 | .21125 | .20062 | .19069 | .18138 | .17267 | .16450 |
| 43 | .27087 | .25678 | .24360 | .23129 | .21977 | .20898 | .19888 | .18941 | .18053 | .17220 |
| 44 | .28025 | .26603 | .25273 | .24027 | .22860 | .21766 | .20740 | .19777 | .18873 | .18023 |
| 45 | .28987 | .27555 | .26212 | .24953 | .23772 | .22664 | .21622 | .20644 | .19724 | .18858 |
| 46 | .29976 | .28533 | .27179 | .25908 | .24714 | .23591 | .22536 | .21542 | .20606 | .19725 |
| 47 | .30987 | .29535 | .28171 | .26889 | .25682 | .24546 | .23476 | .22468 | .21518 | .20621 |
| 48 | .32023 | .30563 | .29190 | .27897 | .26678 | .25530 | .24447 | .23425 | .22460 | .21549 |
| 49 | .33082 | .31615 | .30234 | .28931 | .27702 | .26543 | .25447 | .24412 | .23434 | .22509 |
| 50 | .34166 | .32694 | .31306 | .29995 | .28756 | .27586 | .26479 | .25432 | .24441 | .23502 |
| 51 | .35274 | .33798 | .32404 | .31085 | .29838 | .28658 | .27541 | .26482 | .25479 | .24528 |
| 52 | .36402 | .34924 | .33525 | .32200 | .30946 | .29757 | .28630 | .27561 | .26547 | .25584 |
| 53 | .37550 | .36070 | .34668 | .33339 | .32078 | .30882 | .29746 | .28667 | .27643 | .26669 |
| 54 | .38717 | .37237 | .35833 | .34500 | .33234 | .32031 | .30888 | .29801 | .28766 | .27782 |
| 55 | .39903 | .38424 | .37019 | .35683 | .34413 | .33205 | .32056 | .30961 | .29918 | .28925 |
| 56 | .41108 | .39631 | .38227 | .36890 | .35617 | .34405 | .33250 | .32149 | .31099 | .30097 |
| 57 | .42330 | .40857 | .39455 | .38118 | .36844 | .35629 | .34469 | .33363 | .32306 | .31297 |
| 58 | .43566 | .42098 | .40699 | .39364 | .38089 | .36873 | .35710 | .34600 | .33538 | .32522 |
| 59 | .44811 | .43351 | .41956 | .40623 | .39350 | .38133 | .36968 | .35855 | .34789 | .33768 |
| 60 | .46066 | .44613 | .43224 | .41896 | .40624 | .39408 | .38243 | .37127 | .36058 | .35033 |
| 61 | .47330 | .45887 | .44505 | .43182 | .41914 | .40699 | .39535 | .38418 | .37347 | .36318 |
| 62 | .48608 | .47175 | .45802 | .44485 | .43223 | .42011 | .40848 | .39732 | .38660 | .37629 |
| 63 | .49898 | .48478 | .47115 | .45807 | .44550 | .43343 | .42184 | .41069 | .39997 | .38966 |
| 64 | .51200 | .49793 | .48442 | .47143 | .45895 | .44694 | .43539 | .42427 | .41357 | .40326 |
| 65 | .52512 | .51121 | .49782 | .48495 | .47255 | .46062 | .44912 | .43805 | .42738 | .41709 |
| 66 | .53835 | .52461 | .51137 | .49862 | .48634 | .47449 | .46307 | .45206 | .44143 | .43118 |
| 67 | .55174 | .53818 | .52511 | .51250 | .50034 | .48860 | .47727 | .46633 | .45576 | .44556 |
| 68 | .56524 | .55188 | .53899 | .52654 | .51452 | .50291 | .49168 | .48083 | .47034 | .46020 |
| 69 | .57882 | .56568 | .55299 | .54071 | .52885 | .51737 | .50627 | .49552 | .48513 | .47506 |
| 70 | .59242 | .57951 | .56703 | .55495 | .54325 | .53193 | .52096 | .51034 | .50004 | .49007 |
| 71 | .60598 | .59332 | .58106 | .56918 | .55767 | .54651 | .53569 | .52520 | .51503 | .50516 |
| 72 | .61948 | .60707 | .59504 | .58338 | .57206 | .56108 | .55043 | .54009 | .53004 | .52029 |
| 73 | .63287 | .62073 | .60895 | .59751 | .58640 | .57561 | .56513 | .55495 | .54505 | .53543 |
| 74 | .64621 | .63435 | .62282 | .61162 | .60073 | .59015 | .57985 | .56984 | .56009 | .55061 |
| 75 | .65953 | .64796 | .63671 | .62575 | .61510 | .60473 | .59463 | .58480 | .57523 | .56591 |
| 76 | .67287 | .66160 | .65063 | .63995 | .62954 | .61940 | .60952 | .59989 | .59050 | .58135 |
| 77 | .68622 | .67526 | .66459 | .65419 | .64404 | .63415 | .62450 | .61509 | .60590 | .59694 |
| 78 | .69954 | .68892 | .67856 | .66845 | .65858 | .64895 | .63955 | .63036 | .62140 | .61264 |
| 79 | .71278 | .70250 | .69246 | .68265 | .67308 | .66372 | .65457 | .64563 | .63690 | .62836 |
| 80 | .72581 | .71588 | .70618 | .69668 | .68740 | .67833 | .66945 | .66077 | .65227 | .64396 |
| 81 | .73857 | .72899 | .71962 | .71045 | .70147 | .69268 | .68408 | .67566 | .66741 | .65933 |
| 82 | .75101 | .74178 | .73274 | .72389 | .71522 | .70672 | .69840 | .69024 | .68225 | .67441 |
| 83 | .76311 | .75423 | .74553 | .73700 | .72864 | .72044 | .71240 | .70451 | .69678 | .68919 |
| 84 | .77497 | .76645 | .75809 | .74988 | .74183 | .73393 | .72618 | .71857 | .71110 | .70377 |
| 85 | .78665 | .77848 | .77047 | .76260 | .75487 | .74728 | .73982 | .73250 | .72530 | .71823 |
| 86 | .79805 | .79025 | .78258 | .77504 | .76764 | .76036 | .75320 | .74617 | .73925 | .73245 |
| 87 | .80904 | .80159 | .79427 | .78706 | .77998 | .77301 | .76615 | .75940 | .75277 | .74624 |
| 88 | .81962 | .81251 | .80552 | .79865 | .79188 | .78521 | .77865 | .77220 | .76584 | .75958 |
| 89 | .82978 | .82302 | .81636 | .80980 | .80335 | .79699 | .79072 | .78455 | .77847 | .77248 |
| 90 | .83952 | .83309 | .82676 | .82052 | .81437 | .80831 | .80234 | .79645 | .79064 | .78492 |
| 91 | .84870 | .84260 | .83658 | .83064 | .82479 | .81902 | .81332 | .80771 | .80217 | .79671 |
| 92 | .85716 | .85136 | .84563 | .83998 | .83441 | .82891 | .82348 | .81812 | .81283 | .80761 |
| 93 | .86494 | .85942 | .85396 | .84858 | .84326 | .83801 | .83283 | .82771 | .82266 | .81767 |
| 94 | .87216 | .86690 | .86170 | .85657 | .85149 | .84648 | .84153 | .83664 | .83181 | .82704 |
| 95 | .87898 | .87397 | .86902 | .86412 | .85928 | .85450 | .84977 | .84510 | .84049 | .83592 |
| 96 | .88537 | .88060 | .87587 | .87121 | .86659 | .86203 | .85751 | .85305 | .84864 | .84427 |
| 97 | .89127 | .88672 | .88221 | .87775 | .87335 | .86898 | .86467 | .86040 | .85618 | .85200 |
| 98 | .89680 | .89245 | .88815 | .88389 | .87968 | .87551 | .87138 | .86730 | .86326 | .85926 |
| 99 | .90217 | .89803 | .89393 | .88987 | .88585 | .88187 | .87793 | .87402 | .87016 | .86633 |
| 100 | .90738 | .90344 | .89953 | .89567 | .89183 | .88804 | .88428 | .88056 | .87687 | .87322 |
| 101 | .91250 | .90876 | .90504 | .90137 | .89772 | .89412 | .89054 | .88699 | .88348 | .88000 |
| 102 | .91751 | .91396 | .91045 | .90696 | .90350 | .90007 | .89668 | .89331 | .88997 | .88666 |
| 103 | .92247 | .91912 | .91579 | .91249 | .90922 | .90598 | .90276 | .89957 | .89640 | .89326 |
| 104 | .92775 | .92460 | .92148 | .91839 | .91532 | .91227 | .90924 | .90624 | .90326 | .90031 |
| 105 | .93290 | .92996 | .92704 | .92415 | .92127 | .91841 | .91558 | .91276 | .90997 | .90719 |
| 106 | .93948 | .93680 | .93415 | .93151 | .92889 | .92628 | .92370 | .92113 | .91857 | .91604 |
| 107 | .94739 | .94504 | .94271 | .94039 | .93808 | .93579 | .93351 | .93124 | .92899 | .92675 |
| 108 | .95950 | .95767 | .95585 | .95404 | .95224 | .95045 | .94867 | .94689 | .94512 | .94336 |
| 109 | .97985 | .97893 | .97801 | .97710 | .97619 | .97529 | .97438 | .97348 | .97259 | .97170 |
Table S—Based on Life Table 90CM Single Life Remainder Factors
[Applicable After April 30, 1999, and Before May 1, 2009]
| Age | Interest rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 6.2% | 6.4% | 6.6% | 6.8% | 7.0% | 7.2% | 7.4% | 7.6% | 7.8% | 8.0% | |
| 0 | .03034 | .02857 | .02700 | .02559 | .02433 | .02321 | .02220 | .02129 | .02047 | .01973 |
| 1 | .02279 | .02094 | .01929 | .01782 | .01650 | .01533 | .01427 | .01331 | .01246 | .01168 |
| 2 | .02347 | .02155 | .01983 | .01829 | .01692 | .01569 | .01458 | .01358 | .01268 | .01187 |
| 3 | .02444 | .02243 | .02065 | .01905 | .01761 | .01632 | .01516 | .01412 | .01317 | .01232 |
| 4 | .02558 | .02349 | .02163 | .01996 | .01846 | .01712 | .01590 | .01481 | .01382 | .01292 |
| 5 | .02686 | .02469 | .02275 | .02101 | .01945 | .01804 | .01677 | .01562 | .01458 | .01364 |
| 6 | .02825 | .02600 | .02398 | .02217 | .02053 | .01906 | .01773 | .01653 | .01544 | .01445 |
| 7 | .02976 | .02742 | .02532 | .02343 | .02172 | .02019 | .01880 | .01754 | .01640 | .01536 |
| 8 | .03137 | .02894 | .02675 | .02479 | .02301 | .02140 | .01995 | .01864 | .01744 | .01635 |
| 9 | .03311 | .03059 | .02832 | .02627 | .02442 | .02274 | .02122 | .01985 | .01859 | .01745 |
| 10 | .03499 | .03237 | .03001 | .02788 | .02595 | .02420 | .02262 | .02118 | .01987 | .01867 |
| 11 | .03700 | .03428 | .03183 | .02961 | .02760 | .02578 | .02413 | .02262 | .02125 | .02000 |
| 12 | .03913 | .03632 | .03377 | .03146 | .02937 | .02748 | .02575 | .02418 | .02275 | .02144 |
| 13 | .04135 | .03843 | .03579 | .03339 | .03122 | .02924 | .02744 | .02580 | .02431 | .02294 |
| 14 | .04359 | .04057 | .03783 | .03534 | .03308 | .03102 | .02915 | .02744 | .02587 | .02444 |
| 15 | .04584 | .04270 | .03986 | .03728 | .03493 | .03279 | .03083 | .02905 | .02742 | .02593 |
| 16 | .04806 | .04482 | .04187 | .03919 | .03674 | .03452 | .03248 | .03063 | .02892 | .02736 |
| 17 | .05029 | .04692 | .04387 | .04108 | .03855 | .03623 | .03411 | .03218 | .03040 | .02877 |
| 18 | .05253 | .04905 | .04588 | .04299 | .04036 | .03795 | .03574 | .03373 | .03187 | .03017 |
| 19 | .05484 | .05124 | .04796 | .04496 | .04222 | .03972 | .03742 | .03532 | .03339 | .03161 |
| 20 | .05726 | .05354 | .05013 | .04702 | .04418 | .04158 | .03919 | .03700 | .03498 | .03313 |
| 21 | .05980 | .05595 | .05242 | .04920 | .04625 | .04354 | .04105 | .03877 | .03667 | .03473 |
| 22 | .06246 | .05847 | .05482 | .05147 | .04841 | .04559 | .04301 | .04063 | .03844 | .03642 |
| 23 | .06524 | .06112 | .05734 | .05387 | .05069 | .04777 | .04508 | .04260 | .04032 | .03821 |
| 24 | .06819 | .06392 | .06001 | .05642 | .05312 | .05008 | .04728 | .04470 | .04232 | .04012 |
| 25 | .07131 | .06690 | .06285 | .05913 | .05570 | .05255 | .04964 | .04695 | .04447 | .04218 |
| 26 | .07460 | .07005 | .06586 | .06200 | .05845 | .05518 | .05215 | .04936 | .04677 | .04438 |
| 27 | .07810 | .07340 | .06907 | .06508 | .06140 | .05800 | .05485 | .05195 | .04925 | .04676 |
| 28 | .08179 | .07693 | .07246 | .06833 | .06451 | .06098 | .05772 | .05469 | .05189 | .04929 |
| 29 | .08566 | .08065 | .07603 | .07176 | .06780 | .06414 | .06075 | .05761 | .05469 | .05198 |
| 30 | .08973 | .08456 | .07978 | .07536 | .07127 | .06748 | .06396 | .06069 | .05766 | .05483 |
| 31 | .09398 | .08865 | .08372 | .07915 | .07491 | .07098 | .06733 | .06394 | .06078 | .05785 |
| 32 | .09843 | .09294 | .08785 | .08313 | .07875 | .07468 | .07089 | .06737 | .06409 | .06103 |
| 33 | .10310 | .09745 | .09220 | .08732 | .08279 | .07858 | .07466 | .07100 | .06759 | .06441 |
| 34 | .10799 | .10217 | .09676 | .09173 | .08705 | .08269 | .07862 | .07483 | .07129 | .06798 |
| 35 | .11314 | .10715 | .10157 | .09638 | .09155 | .08704 | .08283 | .07890 | .07522 | .07179 |
| 36 | .11852 | .11236 | .10662 | .10127 | .09628 | .09162 | .08726 | .08319 | .07938 | .07581 |
| 37 | .12416 | .11783 | .11193 | .10641 | .10126 | .09645 | .09194 | .08772 | .08377 | .08006 |
| 38 | .13009 | .12359 | .11751 | .11183 | .10652 | .10155 | .09689 | .09253 | .08843 | .08459 |
| 39 | .13629 | .12962 | .12338 | .11753 | .11206 | .10693 | .10212 | .09761 | .09337 | .08938 |
| 40 | .14281 | .13597 | .12955 | .12355 | .11791 | .11262 | .10766 | .10299 | .09860 | .09447 |
| 41 | .14966 | .14264 | .13606 | .12989 | .12409 | .11864 | .11352 | .10870 | .10417 | .09989 |
| 42 | .15685 | .14966 | .14291 | .13657 | .13061 | .12500 | .11972 | .11475 | .11006 | .10564 |
| 43 | .16437 | .15702 | .15010 | .14360 | .13747 | .13171 | .12627 | .12115 | .11631 | .11174 |
| 44 | .17224 | .16472 | .15764 | .15098 | .14469 | .13876 | .13317 | .12789 | .12290 | .11819 |
| 45 | .18042 | .17274 | .16550 | .15867 | .15223 | .14615 | .14040 | .13496 | .12982 | .12496 |
| 46 | .18893 | .18110 | .17370 | .16671 | .16011 | .15387 | .14796 | .14238 | .13708 | .13207 |
| 47 | .19775 | .18975 | .18220 | .17505 | .16830 | .16190 | .15584 | .15010 | .14466 | .13950 |
| 48 | .20688 | .19873 | .19102 | .18373 | .17682 | .17027 | .16406 | .15817 | .15258 | .14727 |
| 49 | .21633 | .20804 | .20018 | .19274 | .18568 | .17898 | .17262 | .16658 | .16084 | .15539 |
| 50 | .22612 | .21769 | .20969 | .20210 | .19490 | .18805 | .18155 | .17536 | .16948 | .16388 |
| 51 | .23625 | .22769 | .21955 | .21182 | .20448 | .19749 | .19084 | .18452 | .17849 | .17275 |
| 52 | .24669 | .23799 | .22973 | .22186 | .21438 | .20726 | .20047 | .19400 | .18784 | .18196 |
| 53 | .25742 | .24861 | .24022 | .23222 | .22461 | .21735 | .21043 | .20383 | .19753 | .19151 |
| 54 | .26845 | .25952 | .25101 | .24290 | .23516 | .22777 | .22072 | .21399 | .20756 | .20140 |
| 55 | .27978 | .27074 | .26212 | .25389 | .24604 | .23853 | .23136 | .22450 | .21793 | .21166 |
| 56 | .29140 | .28227 | .27355 | .26522 | .25725 | .24963 | .24233 | .23535 | .22867 | .22227 |
| 57 | .30333 | .29411 | .28529 | .27686 | .26879 | .26106 | .25365 | .24656 | .23976 | .23324 |
| 58 | .31551 | .30621 | .29731 | .28878 | .28061 | .27278 | .26528 | .25807 | .25116 | .24453 |
| 59 | .32790 | .31854 | .30956 | .30095 | .29269 | .28477 | .27716 | .26986 | .26284 | .25610 |
| 60 | .34050 | .33107 | .32202 | .31334 | .30500 | .29699 | .28929 | .28190 | .27478 | .26794 |
| 61 | .35331 | .34384 | .33473 | .32598 | .31757 | .30948 | .30170 | .29422 | .28701 | .28007 |
| 62 | .36639 | .35688 | .34772 | .33892 | .33044 | .32229 | .31443 | .30687 | .29958 | .29255 |
| 63 | .37974 | .37020 | .36101 | .35216 | .34363 | .33542 | .32750 | .31986 | .31250 | .30539 |
| 64 | .39334 | .38378 | .37456 | .36568 | .35711 | .34884 | .34087 | .33317 | .32574 | .31857 |
| 65 | .40718 | .39761 | .38838 | .37947 | .37087 | .36257 | .35455 | .34681 | .33932 | .33208 |
| 66 | .42128 | .41172 | .40249 | .39357 | .38496 | .37663 | .36858 | .36079 | .35326 | .34597 |
| 67 | .43569 | .42616 | .41694 | .40803 | .39941 | .39107 | .38299 | .37518 | .36761 | .36028 |
| 68 | .45038 | .44089 | .43170 | .42281 | .41419 | .40585 | .39777 | .38994 | .38235 | .37499 |
| 69 | .46531 | .45587 | .44672 | .43786 | .42927 | .42094 | .41286 | .40503 | .39743 | .39006 |
| 70 | .48040 | .47103 | .46194 | .45312 | .44456 | .43626 | .42820 | .42038 | .41278 | .40540 |
| 71 | .49558 | .48629 | .47727 | .46851 | .46000 | .45174 | .44371 | .43591 | .42832 | .42095 |
| 72 | .51082 | .50162 | .49268 | .48399 | .47554 | .46733 | .45934 | .45157 | .44401 | .43666 |
| 73 | .52607 | .51697 | .50813 | .49952 | .49114 | .48299 | .47506 | .46733 | .45981 | .45249 |
| 74 | .54139 | .53241 | .52367 | .51515 | .50686 | .49879 | .49092 | .48325 | .47578 | .46849 |
| 75 | .55683 | .54798 | .53936 | .53095 | .52276 | .51477 | .50698 | .49938 | .49197 | .48474 |
| 76 | .57243 | .56373 | .55524 | .54696 | .53888 | .53100 | .52330 | .51579 | .50846 | .50130 |
| 77 | .58819 | .57965 | .57132 | .56318 | .55523 | .54747 | .53988 | .53247 | .52523 | .51815 |
| 78 | .60408 | .59572 | .58755 | .57957 | .57177 | .56414 | .55668 | .54939 | .54225 | .53527 |
| 79 | .62001 | .61184 | .60385 | .59604 | .58840 | .58092 | .57360 | .56644 | .55943 | .55256 |
| 80 | .63582 | .62786 | .62007 | .61244 | .60497 | .59765 | .59048 | .58347 | .57659 | .56985 |
| 81 | .65142 | .64367 | .63608 | .62864 | .62135 | .61421 | .60721 | .60034 | .59361 | .58701 |
| 82 | .66673 | .65920 | .65182 | .64458 | .63748 | .63052 | .62368 | .61698 | .61041 | .60395 |
| 83 | .68175 | .67444 | .66728 | .66024 | .65334 | .64656 | .63991 | .63338 | .62696 | .62066 |
| 84 | .69657 | .68950 | .68256 | .67574 | .66904 | .66246 | .65599 | .64964 | .64340 | .63727 |
| 85 | .71128 | .70446 | .69775 | .69116 | .68467 | .67830 | .67204 | .66587 | .65982 | .65386 |
| 86 | .72576 | .71919 | .71272 | .70636 | .70010 | .69394 | .68789 | .68193 | .67606 | .67029 |
| 87 | .73981 | .73349 | .72726 | .72114 | .71511 | .70917 | .70333 | .69757 | .69190 | .68632 |
| 88 | .75342 | .74735 | .74137 | .73548 | .72968 | .72396 | .71833 | .71279 | .70732 | .70194 |
| 89 | .76658 | .76076 | .75503 | .74938 | .74381 | .73832 | .73290 | .72757 | .72231 | .71712 |
| 90 | .77928 | .77371 | .76823 | .76281 | .75748 | .75221 | .74702 | .74190 | .73684 | .73186 |
| 91 | .79131 | .78600 | .78075 | .77557 | .77046 | .76542 | .76044 | .75553 | .75068 | .74589 |
| 92 | .80246 | .79737 | .79235 | .78740 | .78250 | .77767 | .77290 | .76818 | .76353 | .75893 |
| 93 | .81274 | .80788 | .80307 | .79832 | .79363 | .78899 | .78441 | .77989 | .77542 | .77100 |
| 94 | .82232 | .81766 | .81306 | .80850 | .80401 | .79956 | .79517 | .79082 | .78653 | .78228 |
| 95 | .83141 | .82695 | .82254 | .81818 | .81387 | .80961 | .80539 | .80122 | .79710 | .79302 |
| 96 | .83996 | .83569 | .83147 | .82729 | .82316 | .81907 | .81503 | .81103 | .80707 | .80315 |
| 97 | .84787 | .84378 | .83973 | .83573 | .83176 | .82784 | .82396 | .82012 | .81632 | .81255 |
| 98 | .85530 | .85138 | .84750 | .84366 | .83985 | .83609 | .83236 | .82867 | .82502 | .82140 |
| 99 | .86255 | .85880 | .85508 | .85140 | .84776 | .84415 | .84057 | .83703 | .83353 | .83005 |
| 100 | .86960 | .86601 | .86246 | .85894 | .85546 | .85200 | .84858 | .84519 | .84183 | .83849 |
| 101 | .87655 | .87313 | .86974 | .86638 | .86305 | .85975 | .85648 | .85324 | .85003 | .84684 |
| 102 | .88338 | .88012 | .87689 | .87369 | .87052 | .86738 | .86426 | .86116 | .85809 | .85505 |
| 103 | .89015 | .88706 | .88399 | .88095 | .87793 | .87494 | .87197 | .86903 | .86611 | .86321 |
| 104 | .89737 | .89446 | .89157 | .88871 | .88586 | .88304 | .88024 | .87745 | .87469 | .87195 |
| 105 | .90443 | .90170 | .89898 | .89628 | .89360 | .89094 | .88830 | .88568 | .88307 | .88049 |
| 106 | .91351 | .91101 | .90852 | .90605 | .90359 | .90115 | .89873 | .89632 | .89392 | .89154 |
| 107 | .92452 | .92230 | .92010 | .91791 | .91573 | .91356 | .91141 | .90927 | .90714 | .90502 |
| 108 | .94161 | .93987 | .93814 | .93641 | .93469 | .93298 | .93128 | .92958 | .92790 | .92622 |
| 109 | .97081 | .96992 | .96904 | .96816 | .96729 | .96642 | .96555 | .96468 | .96382 | .96296 |
Table S—Based on Life Table 90CM Single Life Remainder Factors
[Applicable After April 30, 1999, and Before May 1, 2009]
| Age | Interest rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 8.2% | 8.4% | 8.6% | 8.8% | 9.0% | 9.2% | 9.4% | 9.6% | 9.8% | 10.0% | |
| 0 | .01906 | .01845 | .01790 | .01740 | .01694 | .01652 | .01613 | .01578 | .01546 | .01516 |
| 1 | .01098 | .01034 | .00977 | .00924 | .00876 | .00833 | .00793 | .00756 | .00722 | .00691 |
| 2 | .01113 | .01046 | .00986 | .00930 | .00880 | .00834 | .00791 | .00753 | .00717 | .00684 |
| 3 | .01155 | .01084 | .01020 | .00962 | .00909 | .00860 | .00816 | .00775 | .00737 | .00702 |
| 4 | .01211 | .01137 | .01069 | .01008 | .00952 | .00900 | .00853 | .00810 | .00770 | .00733 |
| 5 | .01279 | .01201 | .01130 | .01065 | .01006 | .00952 | .00902 | .00856 | .00814 | .00775 |
| 6 | .01356 | .01274 | .01199 | .01131 | .01068 | .01011 | .00959 | .00910 | .00865 | .00824 |
| 7 | .01442 | .01356 | .01277 | .01205 | .01140 | .01079 | .01023 | .00972 | .00925 | .00881 |
| 8 | .01536 | .01446 | .01363 | .01287 | .01218 | .01154 | .01096 | .01041 | .00991 | .00945 |
| 9 | .01641 | .01546 | .01460 | .01380 | .01307 | .01240 | .01178 | .01120 | .01068 | .01019 |
| 10 | .01758 | .01659 | .01567 | .01484 | .01407 | .01336 | .01270 | .01210 | .01154 | .01103 |
| 11 | .01886 | .01781 | .01686 | .01598 | .01517 | .01442 | .01373 | .01310 | .01251 | .01196 |
| 12 | .02024 | .01915 | .01814 | .01721 | .01636 | .01558 | .01485 | .01419 | .01357 | .01299 |
| 13 | .02168 | .02054 | .01948 | .01851 | .01762 | .01679 | .01603 | .01533 | .01467 | .01407 |
| 14 | .02313 | .02193 | .02083 | .01981 | .01887 | .01801 | .01721 | .01646 | .01578 | .01514 |
| 15 | .02456 | .02330 | .02214 | .02107 | .02009 | .01918 | .01834 | .01756 | .01684 | .01617 |
| 16 | .02593 | .02462 | .02340 | .02229 | .02126 | .02030 | .01942 | .01860 | .01785 | .01714 |
| 17 | .02728 | .02590 | .02463 | .02346 | .02238 | .02138 | .02046 | .01960 | .01880 | .01806 |
| 18 | .02861 | .02717 | .02584 | .02462 | .02348 | .02243 | .02146 | .02056 | .01972 | .01894 |
| 19 | .02998 | .02847 | .02708 | .02580 | .02461 | .02351 | .02249 | .02154 | .02066 | .01984 |
| 20 | .03142 | .02984 | .02839 | .02704 | .02580 | .02465 | .02357 | .02258 | .02165 | .02079 |
| 21 | .03295 | .03130 | .02978 | .02837 | .02706 | .02585 | .02473 | .02368 | .02271 | .02180 |
| 22 | .03455 | .03283 | .03124 | .02976 | .02839 | .02712 | .02594 | .02484 | .02382 | .02286 |
| 23 | .03626 | .03446 | .03279 | .03124 | .02981 | .02847 | .02723 | .02608 | .02500 | .02400 |
| 24 | .03809 | .03620 | .03446 | .03283 | .03133 | .02993 | .02863 | .02741 | .02628 | .02522 |
| 25 | .04005 | .03808 | .03625 | .03456 | .03298 | .03151 | .03014 | .02887 | .02768 | .02656 |
| 26 | .04216 | .04010 | .03819 | .03641 | .03476 | .03322 | .03178 | .03044 | .02919 | .02802 |
| 27 | .04444 | .04229 | .04029 | .03843 | .03670 | .03508 | .03357 | .03217 | .03085 | .02962 |
| 28 | .04687 | .04463 | .04254 | .04059 | .03877 | .03708 | .03550 | .03402 | .03263 | .03133 |
| 29 | .04946 | .04712 | .04493 | .04289 | .04099 | .03922 | .03756 | .03600 | .03455 | .03318 |
| 30 | .05221 | .04976 | .04748 | .04534 | .04335 | .04149 | .03975 | .03812 | .03659 | .03515 |
| 31 | .05511 | .05255 | .05017 | .04794 | .04585 | .04390 | .04208 | .04037 | .03876 | .03725 |
| 32 | .05818 | .05551 | .05302 | .05069 | .04851 | .04647 | .04455 | .04276 | .04107 | .03948 |
| 33 | .06144 | .05866 | .05606 | .05363 | .05135 | .04921 | .04720 | .04532 | .04355 | .04188 |
| 34 | .06489 | .06200 | .05928 | .05674 | .05436 | .05212 | .05002 | .04805 | .04619 | .04444 |
| 35 | .06857 | .06555 | .06273 | .06007 | .05758 | .05524 | .05304 | .05097 | .04902 | .04718 |
| 36 | .07246 | .06932 | .06638 | .06361 | .06101 | .05856 | .05626 | .05409 | .05205 | .05012 |
| 37 | .07659 | .07332 | .07025 | .06737 | .06466 | .06210 | .05969 | .05742 | .05528 | .05325 |
| 38 | .08098 | .07758 | .07439 | .07138 | .06855 | .06588 | .06336 | .06099 | .05874 | .05662 |
| 39 | .08563 | .08210 | .07878 | .07565 | .07270 | .06992 | .06729 | .06480 | .06245 | .06023 |
| 40 | .09059 | .08692 | .08347 | .08021 | .07714 | .07423 | .07149 | .06889 | .06643 | .06411 |
| 41 | .09586 | .09206 | .08848 | .08509 | .08189 | .07886 | .07600 | .07329 | .07072 | .06828 |
| 42 | .10147 | .09753 | .09381 | .09029 | .08696 | .08381 | .08083 | .07800 | .07531 | .07277 |
| 43 | .10742 | .10334 | .09948 | .09583 | .09237 | .08909 | .08598 | .08304 | .08024 | .07758 |
| 44 | .11373 | .10950 | .10551 | .10172 | .09813 | .09472 | .09148 | .08841 | .08549 | .08272 |
| 45 | .12035 | .11599 | .11185 | .10792 | .10420 | .10066 | .09730 | .09410 | .09106 | .08817 |
| 46 | .12732 | .12281 | .11853 | .11447 | .11061 | .10694 | .10345 | .10013 | .09696 | .09395 |
| 47 | .13460 | .12995 | .12553 | .12133 | .11733 | .11353 | .10991 | .10646 | .10317 | .10004 |
| 48 | .14223 | .13743 | .13287 | .12853 | .12439 | .12046 | .11671 | .11313 | .10972 | .10646 |
| 49 | .15020 | .14526 | .14056 | .13608 | .13181 | .12774 | .12385 | .12015 | .11661 | .11322 |
| 50 | .15855 | .15347 | .14862 | .14401 | .13960 | .13540 | .13138 | .12754 | .12388 | .12037 |
| 51 | .16727 | .16205 | .15707 | .15232 | .14777 | .14344 | .13929 | .13532 | .13153 | .12789 |
| 52 | .17634 | .17098 | .16587 | .16097 | .15630 | .15183 | .14755 | .14345 | .13953 | .13577 |
| 53 | .18576 | .18027 | .17501 | .16999 | .16518 | .16057 | .15616 | .15194 | .14789 | .14400 |
| 54 | .19552 | .18990 | .18451 | .17935 | .17441 | .16968 | .16514 | .16078 | .15661 | .15260 |
| 55 | .20564 | .19989 | .19437 | .18908 | .18402 | .17915 | .17449 | .17001 | .16571 | .16157 |
| 56 | .21613 | .21025 | .20461 | .19919 | .19400 | .18901 | .18422 | .17962 | .17519 | .17093 |
| 57 | .22698 | .22098 | .21522 | .20968 | .20436 | .19925 | .19434 | .18961 | .18507 | .18069 |
| 58 | .23816 | .23204 | .22616 | .22051 | .21507 | .20984 | .20481 | .19996 | .19530 | .19080 |
| 59 | .24962 | .24339 | .23740 | .23163 | .22608 | .22073 | .21558 | .21062 | .20584 | .20123 |
| 60 | .26136 | .25502 | .24892 | .24304 | .23738 | .23192 | .22666 | .22158 | .21669 | .21196 |
| 61 | .27339 | .26695 | .26075 | .25477 | .24900 | .24343 | .23806 | .23288 | .22787 | .22304 |
| 62 | .28578 | .27925 | .27295 | .26687 | .26100 | .25533 | .24985 | .24456 | .23945 | .23451 |
| 63 | .29854 | .29192 | .28553 | .27935 | .27339 | .26762 | .26205 | .25666 | .25145 | .24641 |
| 64 | .31164 | .30494 | .29846 | .29221 | .28615 | .28030 | .27463 | .26915 | .26384 | .25870 |
| 65 | .32508 | .31831 | .31177 | .30543 | .29930 | .29336 | .28761 | .28203 | .27663 | .27140 |
| 66 | .33891 | .33208 | .32547 | .31906 | .31285 | .30684 | .30101 | .29536 | .28987 | .28456 |
| 67 | .35318 | .34630 | .33963 | .33316 | .32689 | .32081 | .31491 | .30918 | .30363 | .29823 |
| 68 | .36785 | .36093 | .35422 | .34770 | .34138 | .33524 | .32928 | .32349 | .31787 | .31240 |
| 69 | .38290 | .37595 | .36920 | .36265 | .35628 | .35009 | .34408 | .33824 | .33256 | .32703 |
| 70 | .39823 | .39127 | .38450 | .37791 | .37151 | .36529 | .35924 | .35335 | .34762 | .34204 |
| 71 | .41378 | .40681 | .40003 | .39343 | .38701 | .38076 | .37467 | .36875 | .36298 | .35736 |
| 72 | .42950 | .42253 | .41575 | .40914 | .40271 | .39644 | .39034 | .38438 | .37858 | .37293 |
| 73 | .44535 | .43840 | .43162 | .42502 | .41858 | .41231 | .40619 | .40022 | .39440 | .38872 |
| 74 | .46139 | .45446 | .44771 | .44112 | .43469 | .42842 | .42230 | .41632 | .41049 | .40479 |
| 75 | .47769 | .47080 | .46408 | .45752 | .45111 | .44485 | .43874 | .43277 | .42693 | .42123 |
| 76 | .49430 | .48747 | .48079 | .47427 | .46790 | .46167 | .45558 | .44963 | .44380 | .43811 |
| 77 | .51123 | .50447 | .49786 | .49139 | .48506 | .47888 | .47282 | .46690 | .46111 | .45543 |
| 78 | .52845 | .52177 | .51523 | .50884 | .50257 | .49645 | .49044 | .48457 | .47881 | .47317 |
| 79 | .54584 | .53926 | .53282 | .52650 | .52032 | .51426 | .50833 | .50251 | .49681 | .49122 |
| 80 | .56325 | .55678 | .55044 | .54423 | .53813 | .53216 | .52630 | .52056 | .51492 | .50939 |
| 81 | .58054 | .57419 | .56797 | .56186 | .55587 | .54999 | .54422 | .53856 | .53300 | .52754 |
| 82 | .59762 | .59140 | .58530 | .57931 | .57343 | .56766 | .56198 | .55641 | .55094 | .54557 |
| 83 | .61448 | .60840 | .60243 | .59657 | .59081 | .58515 | .57958 | .57411 | .56874 | .56346 |
| 84 | .63124 | .62531 | .61949 | .61376 | .60813 | .60259 | .59715 | .59179 | .58652 | .58134 |
| 85 | .64800 | .64224 | .63657 | .63099 | .62550 | .62010 | .61478 | .60955 | .60441 | .59934 |
| 86 | .66461 | .65902 | .65351 | .64810 | .64276 | .63751 | .63233 | .62724 | .62222 | .61728 |
| 87 | .68083 | .67541 | .67008 | .66483 | .65965 | .65455 | .64953 | .64458 | .63970 | .63489 |
| 88 | .69663 | .69140 | .68624 | .68116 | .67615 | .67121 | .66634 | .66154 | .65680 | .65213 |
| 89 | .71201 | .70696 | .70199 | .69708 | .69224 | .68747 | .68276 | .67811 | .67353 | .66900 |
| 90 | .72694 | .72209 | .71730 | .71257 | .70791 | .70330 | .69876 | .69427 | .68984 | .68547 |
| 91 | .74117 | .73650 | .73190 | .72735 | .72286 | .71842 | .71404 | .70972 | .70545 | .70123 |
| 92 | .75439 | .74991 | .74548 | .74110 | .73678 | .73251 | .72829 | .72412 | .72000 | .71593 |
| 93 | .76664 | .76233 | .75806 | .75385 | .74969 | .74557 | .74150 | .73748 | .73350 | .72957 |
| 94 | .77809 | .77394 | .76983 | .76578 | .76177 | .75780 | .75388 | .75000 | .74616 | .74237 |
| 95 | .78899 | .78500 | .78106 | .77715 | .77329 | .76947 | .76569 | .76195 | .75826 | .75460 |
| 96 | .79928 | .79544 | .79165 | .78790 | .78418 | .78050 | .77686 | .77326 | .76970 | .76617 |
| 97 | .80883 | .80514 | .80149 | .79787 | .79430 | .79075 | .78725 | .78377 | .78033 | .77693 |
| 98 | .81781 | .81427 | .81075 | .80727 | .80382 | .80041 | .79703 | .79368 | .79036 | .78708 |
| 99 | .82661 | .82320 | .81982 | .81648 | .81316 | .80988 | .80662 | .80340 | .80020 | .79704 |
| 100 | .83519 | .83192 | .82868 | .82547 | .82228 | .81913 | .81600 | .81290 | .80982 | .80678 |
| 101 | .84368 | .84055 | .83744 | .83437 | .83131 | .82829 | .82529 | .82231 | .81936 | .81643 |
| 102 | .85203 | .84904 | .84607 | .84313 | .84021 | .83731 | .83444 | .83159 | .82876 | .82596 |
| 103 | .86034 | .85748 | .85465 | .85184 | .84906 | .84629 | .84355 | .84082 | .83812 | .83544 |
| 104 | .86923 | .86653 | .86385 | .86119 | .85855 | .85593 | .85333 | .85074 | .84818 | .84563 |
| 105 | .87792 | .87537 | .87283 | .87032 | .86782 | .86534 | .86287 | .86042 | .85799 | .85557 |
| 106 | .88918 | .88683 | .88450 | .88218 | .87987 | .87758 | .87530 | .87304 | .87079 | .86855 |
| 107 | .90291 | .90082 | .89873 | .89666 | .89460 | .89255 | .89051 | .88849 | .88647 | .88447 |
| 108 | .92455 | .92288 | .92123 | .91958 | .91794 | .91630 | .91468 | .91306 | .91145 | .90984 |
| 109 | .96211 | .96125 | .96041 | .95956 | .95872 | .95788 | .95704 | .95620 | .95537 | .95455 |
Table S—Based on Life Table 90CM Single Life Remainder Factors
[Applicable After April 30, 1999, and Before May 1, 2009]
| Age | Interest rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 10.2% | 10.4% | 10.6% | 10.8% | 11.0% | 11.2% | 11.4% | 11.6% | 11.8% | 12.0% | |
| 0 | .01488 | .01463 | .01439 | .01417 | .01396 | .01377 | .01359 | .01343 | .01327 | .01312 |
| 1 | .00662 | .00636 | .00612 | .00589 | .00568 | .00548 | .00530 | .00513 | .00497 | .00482 |
| 2 | .00654 | .00626 | .00600 | .00576 | .00554 | .00533 | .00514 | .00496 | .00479 | .00463 |
| 3 | .00670 | .00641 | .00613 | .00588 | .00564 | .00542 | .00522 | .00502 | .00484 | .00468 |
| 4 | .00699 | .00668 | .00639 | .00612 | .00587 | .00563 | .00542 | .00521 | .00502 | .00484 |
| 5 | .00739 | .00706 | .00675 | .00646 | .00620 | .00595 | .00571 | .00550 | .00529 | .00510 |
| 6 | .00786 | .00751 | .00718 | .00687 | .00659 | .00633 | .00608 | .00585 | .00563 | .00543 |
| 7 | .00841 | .00803 | .00769 | .00736 | .00706 | .00678 | .00652 | .00627 | .00604 | .00582 |
| 8 | .00902 | .00863 | .00826 | .00791 | .00759 | .00730 | .00702 | .00675 | .00651 | .00628 |
| 9 | .00973 | .00931 | .00892 | .00856 | .00822 | .00790 | .00760 | .00733 | .00706 | .00682 |
| 10 | .01055 | .01010 | .00969 | .00930 | .00894 | .00861 | .00829 | .00799 | .00772 | .00746 |
| 11 | .01146 | .01099 | .01055 | .01014 | .00976 | .00940 | .00907 | .00875 | .00846 | .00818 |
| 12 | .01246 | .01196 | .01150 | .01106 | .01066 | .01028 | .00993 | .00960 | .00928 | .00899 |
| 13 | .01351 | .01298 | .01249 | .01204 | .01161 | .01121 | .01084 | .01049 | .01016 | .00985 |
| 14 | .01455 | .01400 | .01348 | .01300 | .01255 | .01213 | .01173 | .01136 | .01102 | .01069 |
| 15 | .01555 | .01497 | .01443 | .01392 | .01345 | .01300 | .01259 | .01220 | .01183 | .01148 |
| 16 | .01648 | .01587 | .01530 | .01477 | .01427 | .01380 | .01336 | .01295 | .01257 | .01220 |
| 17 | .01737 | .01673 | .01612 | .01556 | .01504 | .01455 | .01408 | .01365 | .01324 | .01286 |
| 18 | .01822 | .01754 | .01691 | .01632 | .01576 | .01525 | .01476 | .01430 | .01387 | .01347 |
| 19 | .01908 | .01837 | .01770 | .01708 | .01650 | .01595 | .01544 | .01495 | .01450 | .01407 |
| 20 | .01999 | .01924 | .01854 | .01788 | .01726 | .01669 | .01615 | .01564 | .01516 | .01471 |
| 21 | .02096 | .02017 | .01943 | .01874 | .01809 | .01748 | .01691 | .01637 | .01586 | .01539 |
| 22 | .02197 | .02114 | .02036 | .01963 | .01895 | .01830 | .01770 | .01713 | .01660 | .01610 |
| 23 | .02306 | .02218 | .02136 | .02059 | .01987 | .01919 | .01855 | .01795 | .01739 | .01686 |
| 24 | .02424 | .02331 | .02245 | .02163 | .02087 | .02016 | .01948 | .01885 | .01825 | .01769 |
| 25 | .02552 | .02455 | .02364 | .02278 | .02197 | .02122 | .02051 | .01984 | .01920 | .01861 |
| 26 | .02692 | .02589 | .02493 | .02403 | .02318 | .02238 | .02162 | .02091 | .02025 | .01961 |
| 27 | .02846 | .02738 | .02636 | .02541 | .02451 | .02367 | .02287 | .02212 | .02141 | .02074 |
| 28 | .03012 | .02898 | .02791 | .02690 | .02595 | .02506 | .02422 | .02342 | .02267 | .02196 |
| 29 | .03190 | .03070 | .02957 | .02851 | .02751 | .02656 | .02567 | .02483 | .02404 | .02329 |
| 30 | .03381 | .03254 | .03135 | .03023 | .02917 | .02817 | .02723 | .02634 | .02551 | .02471 |
| 31 | .03583 | .03450 | .03324 | .03206 | .03094 | .02989 | .02890 | .02796 | .02707 | .02623 |
| 32 | .03799 | .03659 | .03527 | .03402 | .03284 | .03173 | .03068 | .02968 | .02874 | .02785 |
| 33 | .04031 | .03883 | .03744 | .03612 | .03488 | .03371 | .03260 | .03155 | .03055 | .02961 |
| 34 | .04279 | .04123 | .03976 | .03838 | .03707 | .03583 | .03465 | .03354 | .03249 | .03149 |
| 35 | .04545 | .04382 | .04227 | .04081 | .03943 | .03812 | .03688 | .03571 | .03459 | .03354 |
| 36 | .04830 | .04658 | .04495 | .04341 | .04196 | .04058 | .03927 | .03803 | .03685 | .03573 |
| 37 | .05134 | .04953 | .04782 | .04620 | .04467 | .04321 | .04183 | .04052 | .03928 | .03809 |
| 38 | .05462 | .05272 | .05092 | .04921 | .04760 | .04606 | .04461 | .04322 | .04191 | .04066 |
| 39 | .05812 | .05613 | .05424 | .05245 | .05075 | .04913 | .04760 | .04614 | .04475 | .04343 |
| 40 | .06190 | .05981 | .05782 | .05594 | .05415 | .05245 | .05083 | .04929 | .04783 | .04643 |
| 41 | .06597 | .06378 | .06170 | .05972 | .05784 | .05605 | .05435 | .05272 | .05118 | .04970 |
| 42 | .07035 | .06806 | .06587 | .06380 | .06182 | .05994 | .05815 | .05644 | .05481 | .05326 |
| 43 | .07505 | .07265 | .07036 | .06818 | .06611 | .06414 | .06225 | .06045 | .05874 | .05710 |
| 44 | .08008 | .07757 | .07518 | .07290 | .07072 | .06865 | .06667 | .06478 | .06298 | .06125 |
| 45 | .08542 | .08279 | .08029 | .07791 | .07563 | .07346 | .07138 | .06940 | .06750 | .06569 |
| 46 | .09108 | .08834 | .08573 | .08324 | .08085 | .07858 | .07640 | .07432 | .07233 | .07043 |
| 47 | .09705 | .09419 | .09147 | .08886 | .08637 | .08399 | .08172 | .07954 | .07745 | .07545 |
| 48 | .10335 | .10038 | .09754 | .09482 | .09222 | .08973 | .08735 | .08507 | .08288 | .08078 |
| 49 | .10999 | .10690 | .10394 | .10111 | .09840 | .09581 | .09332 | .09093 | .08864 | .08644 |
| 50 | .11701 | .11380 | .11073 | .10778 | .10496 | .10225 | .09965 | .09716 | .09477 | .09247 |
| 51 | .12441 | .12108 | .11789 | .11482 | .11189 | .10907 | .10636 | .10376 | .10126 | .09886 |
| 52 | .13217 | .12871 | .12540 | .12222 | .11916 | .11623 | .11341 | .11071 | .10810 | .10560 |
| 53 | .14028 | .13670 | .13327 | .12997 | .12680 | .12375 | .12082 | .11801 | .11529 | .11268 |
| 54 | .14875 | .14505 | .14150 | .13808 | .13480 | .13163 | .12859 | .12566 | .12284 | .12012 |
| 55 | .15760 | .15378 | .15011 | .14657 | .14317 | .13989 | .13674 | .13370 | .13077 | .12794 |
| 56 | .16684 | .16290 | .15911 | .15546 | .15194 | .14855 | .14528 | .14213 | .13909 | .13615 |
| 57 | .17648 | .17242 | .16851 | .16474 | .16111 | .15760 | .15422 | .15096 | .14781 | .14477 |
| 58 | .18647 | .18229 | .17827 | .17438 | .17064 | .16702 | .16353 | .16015 | .15689 | .15374 |
| 59 | .19678 | .19249 | .18835 | .18435 | .18049 | .17676 | .17316 | .16968 | .16631 | .16305 |
| 60 | .20740 | .20300 | .19875 | .19464 | .19066 | .18682 | .18311 | .17952 | .17604 | .17268 |
| 61 | .21837 | .21385 | .20949 | .20527 | .20119 | .19724 | .19341 | .18971 | .18613 | .18266 |
| 62 | .22973 | .22511 | .22064 | .21631 | .21212 | .20807 | .20414 | .20033 | .19664 | .19306 |
| 63 | .24152 | .23680 | .23222 | .22779 | .22350 | .21934 | .21530 | .21139 | .20760 | .20392 |
| 64 | .25372 | .24890 | .24422 | .23969 | .23529 | .23103 | .22690 | .22289 | .21899 | .21521 |
| 65 | .26633 | .26141 | .25664 | .25201 | .24752 | .24316 | .23893 | .23482 | .23083 | .22695 |
| 66 | .27940 | .27439 | .26953 | .26481 | .26023 | .25577 | .25145 | .24724 | .24316 | .23918 |
| 67 | .29299 | .28790 | .28296 | .27815 | .27348 | .26894 | .26453 | .26024 | .25606 | .25200 |
| 68 | .30709 | .30193 | .29691 | .29202 | .28728 | .28265 | .27816 | .27378 | .26952 | .26537 |
| 69 | .32166 | .31643 | .31134 | .30639 | .30157 | .29687 | .29230 | .28785 | .28351 | .27928 |
| 70 | .33661 | .33133 | .32618 | .32116 | .31628 | .31152 | .30688 | .30235 | .29794 | .29364 |
| 71 | .35188 | .34654 | .34134 | .33627 | .33133 | .32651 | .32181 | .31722 | .31275 | .30838 |
| 72 | .36742 | .36204 | .35679 | .35168 | .34668 | .34181 | .33706 | .33241 | .32788 | .32345 |
| 73 | .38317 | .37776 | .37248 | .36733 | .36229 | .35738 | .35257 | .34788 | .34330 | .33882 |
| 74 | .39923 | .39380 | .38849 | .38330 | .37823 | .37328 | .36844 | .36370 | .35908 | .35455 |
| 75 | .41566 | .41021 | .40489 | .39968 | .39459 | .38961 | .38474 | .37997 | .37531 | .37074 |
| 76 | .43254 | .42709 | .42176 | .41655 | .41144 | .40645 | .40156 | .39677 | .39208 | .38749 |
| 77 | .44988 | .44444 | .43912 | .43391 | .42880 | .42380 | .41891 | .41411 | .40940 | .40479 |
| 78 | .46765 | .46224 | .45694 | .45174 | .44665 | .44166 | .43677 | .43197 | .42726 | .42265 |
| 79 | .48574 | .48037 | .47510 | .46993 | .46487 | .45990 | .45502 | .45024 | .44554 | .44094 |
| 80 | .50397 | .49865 | .49343 | .48830 | .48327 | .47834 | .47349 | .46873 | .46406 | .45947 |
| 81 | .52219 | .51693 | .51176 | .50669 | .50171 | .49682 | .49201 | .48729 | .48265 | .47809 |
| 82 | .54029 | .53510 | .53000 | .52499 | .52007 | .51523 | .51047 | .50580 | .50120 | .49667 |
| 83 | .55826 | .55315 | .54813 | .54319 | .53834 | .53356 | .52886 | .52424 | .51969 | .51522 |
| 84 | .57624 | .57123 | .56629 | .56144 | .55666 | .55195 | .54732 | .54277 | .53828 | .53386 |
| 85 | .59435 | .58944 | .58460 | .57984 | .57516 | .57054 | .56599 | .56151 | .55710 | .55275 |
| 86 | .61241 | .60762 | .60289 | .59824 | .59365 | .58913 | .58468 | .58029 | .57596 | .57170 |
| 87 | .63015 | .62548 | .62087 | .61633 | .61185 | .60744 | .60309 | .59880 | .59456 | .59039 |
| 88 | .64753 | .64299 | .63851 | .63409 | .62973 | .62543 | .62118 | .61700 | .61287 | .60879 |
| 89 | .66454 | .66013 | .65579 | .65150 | .64726 | .64308 | .63895 | .63488 | .63086 | .62689 |
| 90 | .68115 | .67689 | .67268 | .66853 | .66442 | .66037 | .65637 | .65241 | .64851 | .64465 |
| 91 | .69706 | .69294 | .68887 | .68486 | .68089 | .67696 | .67309 | .66925 | .66547 | .66173 |
| 92 | .71190 | .70792 | .70399 | .70011 | .69627 | .69247 | .68872 | .68501 | .68134 | .67771 |
| 93 | .72569 | .72184 | .71804 | .71429 | .71057 | .70689 | .70326 | .69967 | .69611 | .69259 |
| 94 | .73861 | .73490 | .73123 | .72759 | .72400 | .72044 | .71692 | .71344 | .71000 | .70659 |
| 95 | .75097 | .74739 | .74384 | .74033 | .73686 | .73342 | .73002 | .72665 | .72331 | .72001 |
| 96 | .76267 | .75922 | .75579 | .75240 | .74905 | .74572 | .74243 | .73917 | .73595 | .73275 |
| 97 | .77356 | .77022 | .76691 | .76363 | .76039 | .75718 | .75399 | .75084 | .74772 | .74463 |
| 98 | .78382 | .78059 | .77740 | .77423 | .77110 | .76799 | .76491 | .76186 | .75884 | .75584 |
| 99 | .79390 | .79079 | .78771 | .78465 | .78162 | .77862 | .77565 | .77270 | .76978 | .76688 |
| 100 | .80376 | .80076 | .79779 | .79485 | .79193 | .78904 | .78617 | .78333 | .78051 | .77771 |
| 101 | .81353 | .81066 | .80780 | .80497 | .80217 | .79938 | .79662 | .79388 | .79117 | .78847 |
| 102 | .82318 | .82042 | .81768 | .81496 | .81227 | .80960 | .80694 | .80431 | .80170 | .79911 |
| 103 | .83278 | .83014 | .82752 | .82491 | .82233 | .81977 | .81723 | .81470 | .81220 | .80971 |
| 104 | .84310 | .84059 | .83810 | .83563 | .83317 | .83073 | .82831 | .82591 | .82352 | .82115 |
| 105 | .85318 | .85079 | .84843 | .84607 | .84374 | .84142 | .83911 | .83682 | .83455 | .83229 |
| 106 | .86633 | .86413 | .86193 | .85975 | .85758 | .85543 | .85329 | .85116 | .84904 | .84694 |
| 107 | .88247 | .88049 | .87852 | .87656 | .87460 | .87266 | .87073 | .86881 | .86690 | .86500 |
| 108 | .90825 | .90666 | .90507 | .90350 | .90193 | .90037 | .89881 | .89727 | .89572 | .89419 |
| 109 | .95372 | .95290 | .95208 | .95126 | .95045 | .94964 | .94883 | .94803 | .94723 | .94643 |
Table S—Based on Life Table 90CM Single Life Remainder Factors
[Applicable After April 30, 1999, and Before May 1, 2009]
| Age | Interest rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 12.2% | 12.4% | 12.6% | 12.8% | 13.0% | 13.2% | 13.4% | 13.6% | 13.8% | 14.0% | |
| 0 | .01298 | .01285 | .01273 | .01261 | .01250 | .01240 | .01230 | .01221 | .01212 | .01203 |
| 1 | .00468 | .00455 | .00443 | .00431 | .00420 | .00410 | .00400 | .00391 | .00382 | .00374 |
| 2 | .00448 | .00435 | .00421 | .00409 | .00398 | .00387 | .00376 | .00366 | .00357 | .00348 |
| 3 | .00452 | .00437 | .00423 | .00410 | .00398 | .00386 | .00375 | .00365 | .00355 | .00345 |
| 4 | .00468 | .00452 | .00437 | .00423 | .00410 | .00397 | .00386 | .00375 | .00364 | .00354 |
| 5 | .00493 | .00476 | .00460 | .00445 | .00431 | .00418 | .00405 | .00393 | .00382 | .00371 |
| 6 | .00524 | .00506 | .00489 | .00473 | .00458 | .00444 | .00430 | .00418 | .00406 | .00394 |
| 7 | .00562 | .00543 | .00525 | .00508 | .00492 | .00477 | .00462 | .00449 | .00436 | .00423 |
| 8 | .00606 | .00586 | .00566 | .00548 | .00531 | .00515 | .00499 | .00485 | .00471 | .00458 |
| 9 | .00659 | .00637 | .00616 | .00597 | .00579 | .00561 | .00545 | .00529 | .00514 | .00500 |
| 10 | .00721 | .00698 | .00676 | .00655 | .00636 | .00617 | .00600 | .00583 | .00567 | .00552 |
| 11 | .00792 | .00767 | .00744 | .00722 | .00701 | .00682 | .00663 | .00645 | .00628 | .00612 |
| 12 | .00871 | .00845 | .00821 | .00797 | .00775 | .00754 | .00735 | .00716 | .00698 | .00681 |
| 13 | .00955 | .00928 | .00902 | .00877 | .00854 | .00831 | .00810 | .00790 | .00771 | .00753 |
| 14 | .01038 | .01009 | .00981 | .00955 | .00930 | .00907 | .00885 | .00864 | .00843 | .00824 |
| 15 | .01116 | .01085 | .01056 | .01028 | .01002 | .00977 | .00954 | .00932 | .00910 | .00890 |
| 16 | .01186 | .01153 | .01123 | .01094 | .01066 | .01040 | .01015 | .00992 | .00969 | .00948 |
| 17 | .01250 | .01215 | .01183 | .01152 | .01124 | .01096 | .01070 | .01045 | .01022 | .00999 |
| 18 | .01308 | .01272 | .01238 | .01206 | .01175 | .01147 | .01119 | .01093 | .01068 | .01044 |
| 19 | .01367 | .01329 | .01293 | .01259 | .01227 | .01196 | .01167 | .01140 | .01113 | .01088 |
| 20 | .01428 | .01388 | .01350 | .01314 | .01280 | .01248 | .01217 | .01188 | .01161 | .01134 |
| 21 | .01494 | .01451 | .01411 | .01373 | .01337 | .01303 | .01271 | .01240 | .01211 | .01183 |
| 22 | .01562 | .01517 | .01475 | .01435 | .01397 | .01361 | .01326 | .01294 | .01263 | .01233 |
| 23 | .01635 | .01588 | .01543 | .01501 | .01460 | .01422 | .01386 | .01351 | .01319 | .01287 |
| 24 | .01716 | .01665 | .01618 | .01573 | .01530 | .01489 | .01451 | .01415 | .01380 | .01347 |
| 25 | .01804 | .01751 | .01701 | .01653 | .01608 | .01565 | .01524 | .01485 | .01448 | .01413 |
| 26 | .01902 | .01845 | .01792 | .01741 | .01693 | .01648 | .01604 | .01563 | .01524 | .01487 |
| 27 | .02011 | .01951 | .01895 | .01841 | .01790 | .01742 | .01696 | .01652 | .01610 | .01571 |
| 28 | .02129 | .02066 | .02006 | .01949 | .01895 | .01844 | .01795 | .01748 | .01704 | .01662 |
| 29 | .02258 | .02191 | .02127 | .02067 | .02009 | .01955 | .01903 | .01853 | .01806 | .01762 |
| 30 | .02396 | .02325 | .02257 | .02193 | .02132 | .02074 | .02019 | .01966 | .01916 | .01869 |
| 31 | .02543 | .02467 | .02396 | .02328 | .02263 | .02201 | .02143 | .02087 | .02034 | .01983 |
| 32 | .02701 | .02621 | .02545 | .02472 | .02404 | .02338 | .02276 | .02217 | .02160 | .02106 |
| 33 | .02871 | .02786 | .02706 | .02629 | .02556 | .02487 | .02420 | .02357 | .02297 | .02240 |
| 34 | .03054 | .02964 | .02879 | .02797 | .02720 | .02646 | .02576 | .02509 | .02445 | .02383 |
| 35 | .03253 | .03158 | .03067 | .02981 | .02898 | .02820 | .02745 | .02674 | .02606 | .02541 |
| 36 | .03467 | .03366 | .03269 | .03178 | .03090 | .03007 | .02928 | .02852 | .02779 | .02710 |
| 37 | .03697 | .03590 | .03488 | .03391 | .03298 | .03209 | .03125 | .03044 | .02967 | .02893 |
| 38 | .03947 | .03833 | .03725 | .03622 | .03524 | .03430 | .03340 | .03254 | .03172 | .03094 |
| 39 | .04217 | .04096 | .03982 | .03873 | .03768 | .03669 | .03573 | .03482 | .03395 | .03312 |
| 40 | .04510 | .04383 | .04262 | .04146 | .04035 | .03930 | .03828 | .03732 | .03639 | .03550 |
| 41 | .04830 | .04695 | .04567 | .04445 | .04327 | .04215 | .04108 | .04005 | .03907 | .03812 |
| 42 | .05177 | .05035 | .04900 | .04770 | .04646 | .04527 | .04413 | .04304 | .04200 | .04100 |
| 43 | .05553 | .05404 | .05261 | .05123 | .04992 | .04866 | .04746 | .04630 | .04520 | .04413 |
| 44 | .05960 | .05802 | .05651 | .05506 | .05368 | .05235 | .05107 | .04985 | .04867 | .04754 |
| 45 | .06395 | .06229 | .06069 | .05917 | .05770 | .05630 | .05495 | .05365 | .05241 | .05121 |
| 46 | .06860 | .06685 | .06517 | .06356 | .06202 | .06053 | .05911 | .05774 | .05643 | .05516 |
| 47 | .07353 | .07169 | .06992 | .06823 | .06660 | .06504 | .06353 | .06209 | .06070 | .05936 |
| 48 | .07877 | .07684 | .07498 | .07320 | .07149 | .06984 | .06826 | .06673 | .06527 | .06385 |
| 49 | .08433 | .08231 | .08036 | .07849 | .07669 | .07495 | .07329 | .07168 | .07013 | .06864 |
| 50 | .09026 | .08814 | .08609 | .08413 | .08224 | .08042 | .07867 | .07698 | .07535 | .07378 |
| 51 | .09655 | .09433 | .09219 | .09013 | .08815 | .08624 | .08440 | .08262 | .08091 | .07926 |
| 52 | .10318 | .10086 | .09863 | .09647 | .09439 | .09239 | .09046 | .08860 | .08680 | .08506 |
| 53 | .11017 | .10774 | .10541 | .10315 | .10098 | .09888 | .09686 | .09491 | .09302 | .09120 |
| 54 | .11750 | .11498 | .11254 | .11019 | .10792 | .10572 | .10361 | .10156 | .09958 | .09767 |
| 55 | .12522 | .12258 | .12005 | .11759 | .11522 | .11294 | .11072 | .10859 | .10652 | .10451 |
| 56 | .13332 | .13059 | .12794 | .12539 | .12292 | .12054 | .11823 | .11599 | .11383 | .11174 |
| 57 | .14183 | .13899 | .13624 | .13359 | .13102 | .12853 | .12613 | .12380 | .12154 | .11936 |
| 58 | .15070 | .14775 | .14490 | .14215 | .13948 | .13689 | .13439 | .13197 | .12962 | .12734 |
| 59 | .15990 | .15685 | .15389 | .15103 | .14826 | .14558 | .14298 | .14046 | .13801 | .13564 |
| 60 | .16942 | .16626 | .16321 | .16024 | .15737 | .15459 | .15189 | .14927 | .14673 | .14426 |
| 61 | .17929 | .17603 | .17287 | .16981 | .16684 | .16395 | .16115 | .15844 | .15580 | .15324 |
| 62 | .18960 | .18623 | .18297 | .17980 | .17673 | .17375 | .17085 | .16803 | .16530 | .16264 |
| 63 | .20035 | .19688 | .19352 | .19025 | .18708 | .18400 | .18100 | .17809 | .17525 | .17250 |
| 64 | .21154 | .20797 | .20451 | .20114 | .19787 | .19469 | .19159 | .18859 | .18566 | .18281 |
| 65 | .22318 | .21951 | .21595 | .21249 | .20912 | .20584 | .20265 | .19955 | .19652 | .19358 |
| 66 | .23532 | .23156 | .22790 | .22434 | .22088 | .21751 | .21422 | .21102 | .20791 | .20487 |
| 67 | .24804 | .24419 | .24044 | .23679 | .23324 | .22977 | .22640 | .22311 | .21990 | .21678 |
| 68 | .26133 | .25740 | .25356 | .24983 | .24618 | .24263 | .23917 | .23579 | .23250 | .22929 |
| 69 | .27516 | .27114 | .26723 | .26341 | .25969 | .25605 | .25251 | .24905 | .24567 | .24237 |
| 70 | .28945 | .28536 | .28137 | .27747 | .27367 | .26996 | .26633 | .26279 | .25934 | .25596 |
| 71 | .30412 | .29996 | .29590 | .29193 | .28806 | .28427 | .28057 | .27696 | .27343 | .26998 |
| 72 | .31913 | .31491 | .31078 | .30675 | .30281 | .29895 | .29519 | .29150 | .28790 | .28438 |
| 73 | .33444 | .33016 | .32597 | .32188 | .31788 | .31396 | .31013 | .30638 | .30271 | .29913 |
| 74 | .35012 | .34579 | .34155 | .33741 | .33335 | .32938 | .32549 | .32168 | .31795 | .31430 |
| 75 | .36628 | .36190 | .35762 | .35343 | .34932 | .34530 | .34136 | .33750 | .33372 | .33001 |
| 76 | .38299 | .37858 | .37427 | .37004 | .36589 | .36183 | .35784 | .35394 | .35011 | .34636 |
| 77 | .40028 | .39585 | .39151 | .38725 | .38307 | .37898 | .37496 | .37103 | .36716 | .36337 |
| 78 | .41812 | .41368 | .40933 | .40506 | .40086 | .39675 | .39271 | .38874 | .38485 | .38103 |
| 79 | .43641 | .43198 | .42762 | .42334 | .41914 | .41502 | .41096 | .40698 | .40308 | .39924 |
| 80 | .45496 | .45054 | .44619 | .44192 | .43772 | .43360 | .42954 | .42556 | .42164 | .41779 |
| 81 | .47360 | .46920 | .46487 | .46061 | .45643 | .45231 | .44827 | .44429 | .44038 | .43653 |
| 82 | .49223 | .48785 | .48355 | .47932 | .47516 | .47106 | .46703 | .46307 | .45916 | .45532 |
| 83 | .51081 | .50648 | .50221 | .49802 | .49388 | .48982 | .48581 | .48187 | .47799 | .47416 |
| 84 | .52951 | .52523 | .52101 | .51686 | .51277 | .50874 | .50477 | .50086 | .49701 | .49321 |
| 85 | .54847 | .54425 | .54009 | .53600 | .53196 | .52798 | .52406 | .52019 | .51638 | .51262 |
| 86 | .56749 | .56335 | .55926 | .55523 | .55126 | .54734 | .54348 | .53966 | .53591 | .53220 |
| 87 | .58627 | .58221 | .57820 | .57425 | .57035 | .56650 | .56270 | .55895 | .55526 | .55161 |
| 88 | .60477 | .60079 | .59688 | .59301 | .58919 | .58542 | .58170 | .57802 | .57439 | .57081 |
| 89 | .62297 | .61909 | .61527 | .61149 | .60776 | .60408 | .60044 | .59685 | .59330 | .58979 |
| 90 | .64084 | .63707 | .63335 | .62968 | .62604 | .62246 | .61891 | .61540 | .61194 | .60851 |
| 91 | .65803 | .65437 | .65076 | .64719 | .64366 | .64017 | .63672 | .63330 | .62993 | .62659 |
| 92 | .67412 | .67058 | .66707 | .66360 | .66017 | .65678 | .65342 | .65010 | .64682 | .64357 |
| 93 | .68911 | .68567 | .68227 | .67890 | .67557 | .67227 | .66901 | .66578 | .66258 | .65942 |
| 94 | .70321 | .69988 | .69657 | .69330 | .69006 | .68686 | .68369 | .68055 | .67744 | .67437 |
| 95 | .71674 | .71351 | .71031 | .70713 | .70399 | .70088 | .69781 | .69476 | .69174 | .68875 |
| 96 | .72959 | .72646 | .72335 | .72028 | .71724 | .71422 | .71123 | .70828 | .70534 | .70244 |
| 97 | .74156 | .73853 | .73552 | .73254 | .72959 | .72666 | .72376 | .72089 | .71804 | .71522 |
| 98 | .75287 | .74993 | .74702 | .74413 | .74126 | .73842 | .73561 | .73282 | .73006 | .72732 |
| 99 | .76401 | .76117 | .75834 | .75555 | .75277 | .75002 | .74730 | .74459 | .74191 | .73926 |
| 100 | .77494 | .77219 | .76946 | .76676 | .76408 | .76142 | .75878 | .75616 | .75357 | .75099 |
| 101 | .78580 | .78315 | .78052 | .77791 | .77532 | .77275 | .77021 | .76768 | .76517 | .76268 |
| 102 | .79654 | .79399 | .79146 | .78894 | .78645 | .78397 | .78152 | .77908 | .77666 | .77426 |
| 103 | .80724 | .80479 | .80236 | .79994 | .79755 | .79517 | .79280 | .79046 | .78813 | .78582 |
| 104 | .81879 | .81646 | .81413 | .81183 | .80954 | .80726 | .80501 | .80276 | .80054 | .79832 |
| 105 | .83005 | .82782 | .82560 | .82340 | .82121 | .81904 | .81688 | .81474 | .81260 | .81049 |
| 106 | .84485 | .84277 | .84071 | .83866 | .83662 | .83459 | .83257 | .83057 | .82857 | .82659 |
| 107 | .86311 | .86124 | .85937 | .85751 | .85566 | .85382 | .85199 | .85017 | .84835 | .84655 |
| 108 | .89266 | .89114 | .88963 | .88812 | .88662 | .88513 | .88364 | .88216 | .88068 | .87922 |
| 109 | .94563 | .94484 | .94405 | .94326 | .94248 | .94170 | .94092 | .94014 | .93937 | .93860 |
(7) Effective/applicability dates. Paragraphs (f)(1) through (f)(6) apply after April 30, 1999, and before May 1, 2009.
(g) Present value of the remainder interest in the case of transfers to pooled income funds for which the valuation date is on or after May 1, 2009, and before June 1, 2023—(1) In general. In the case of transfers to pooled income funds for which the valuation date is on or after May 1, 2009, and before June 1, 2023, the present value of a remainder interest is determined under this section. See, however, § 1.7520-3(b) (relating to exceptions to the use of prescribed tables under certain circumstances). The present value of a remainder interest that is dependent on the termination of the life of one individual is computed by the use of Table S in paragraph (g)(6) of this section. For purposes of the computations under this section, the age of an individual is the age at the individual’s nearest birthday.
(2) Transitional rules for valuation of transfers to pooled income funds. (i) For purposes of section 2055, 2106, or 2624, if on May 1, 2009, the decedent was under a mental disability so that the disposition of the property could not be changed, and the decedent died on or after May 1, 2009, but before June 2, 2023, without having regained the ability to dispose of the decedent’s property, or if the decedent died within 90 days of the date that the decedent first regained that ability on or after May 1, 2009, but before June 2, 2023, the present value of a remainder interest is determined as if the valuation date with respect to the decedent’s gross estate is either before May 1, 2009, or after April 30, 2009, at the option of the decedent’s executor.
(ii) For purposes of section 170, 2055, 2106, 2522, or 2624, in the case of transfers to a pooled income fund for which the valuation date is on or after May 1, 2009, and before July 1, 2009, the present value of the remainder interest under this section is determined by using the section 7520 interest rate for the month in which the valuation date occurs (see §§ 1.7520-1(b) and 1.7520-2(a)(2)) and the appropriate actuarial tables under either paragraph (f)(6) or (g)(6) of this section, at the option of the donor or the decedent’s executor, as the case may be.
(iii) For purposes of paragraphs (g)(2)(i) and (ii) of this section, where the donor or decedent’s executor is given the option to use the appropriate actuarial tables under either paragraph (f)(6) or (g)(6) of this section, the donor or decedent’s executor must consistently use the same mortality basis with respect to each interest (income, remainder, partial, etc.) in the same property, and with respect to all transfers occurring on the same valuation date. For example, gift and income tax charitable deductions with respect to the same transfer must be determined based on factors with the same mortality basis, and all assets includible in the gross estate and/or estate tax deductions claimed must be valued based on factors with the same mortality basis.
(iv) In the case of transfers to a pooled income fund for which the valuation date is after April 30, 2019, and before June 1, 2023, the present value of the remainder interest under this section is determined under § 1.642(c)-6(e)(2).
(3) Present value of a remainder interest. The present value of a remainder interest in property transferred to a pooled income fund is computed on the basis of—
(i) Life contingencies determined from the values of l
(ii) Discount at a rate of interest, compounded annually, equal to the highest yearly rate of return of the pooled income fund for the three taxable years immediately preceding its taxable year in which the transfer of property to the fund is made. The provisions of § 1.642(c)-6(c) apply for determining the yearly rate of return. However, where the taxable year is less than 12 months, the provisions of § 1.642(c)-6(e)(3)(ii) apply for the determining the yearly rate of return.
(4) Pooled income funds in existence less than three taxable years. The provisions of § 1.642(c)-6(e)(4) apply for determining the highest yearly rate of return when the pooled income fund has been in existence less than three taxable years.
(5) Computation of value of remainder interest. The factor that is used in determining the present value of a remainder interest that is dependent on the termination of the life of one individual is the factor from Table S in paragraph (g)(6) of this section under the appropriate yearly rate of return opposite the number that corresponds to the age of the individual upon whose life the value of the remainder interest is based. Table S in paragraph (g)(6) of this section includes factors for yearly rates of return from 0.2 to 14 percent, inclusive, in increments of two-tenths of one percent. Actuarial factors that do not appear in paragraph (g)(6) of this section may be computed directly by using the formula in § 20.2031-7(d)(2)(ii)(B) of this chapter to derive a remainder factor from the appropriate mortality table to at least five decimal places. For the convenience of taxpayers, actuarial factors have been computed by the IRS and appear in Table S that is referenced and explained by IRS Publication 1457, Actuarial Valuations Version 3A (2009). The table is available at no charge, electronically via the IRS website at https://www.irs.gov/retirement-plans/actuarial-tables (or a corresponding URL as may be updated from time to time). For other situations, see § 1.642(c)-6(b). If the yearly rate of return is a percentage that is between the yearly rates of return for which factors are provided by Table S, an exact method of obtaining the applicable factors (such as through software using the actual rate of return and actuarial formulas provided in § 20.2031-7(d)(2)(ii)(B) of this chapter) or a linear interpolation must be used, provided whichever method used is applied consistently in valuing all interests in the same property. The present value of the remainder interest is determined by multiplying the fair market value of the property on the valuation date by the appropriate remainder factor. For an example of a computation of the present value of a remainder interest requiring a linear interpolation adjustment, see § 1.642(c)-6(e)(5).
(6) Actuarial tables. In the case of transfers for which the valuation date is on or after May 1, 2009, and before June 1, 2023, and without regard to the headings in the tables in this paragraph (g)(6) that do not contain this termination date for the applicability of the tables, the present value of a remainder interest dependent on the termination of one life in the case of a transfer to a pooled income fund is determined by using the following tables:
(7) Applicability dates. Paragraphs (g)(1) through (6) of this section apply on and after May 1, 2009, and before June 1, 2023.
Election to Treat Trust as Part of an Estate
§ 1.645-1 Election by certain revocable trusts to be treated as part of estate.
(a) In general. If an election is filed for a qualified revocable trust, as defined in paragraph (b)(1) of this section, in accordance with the rules set forth in paragraph (c) of this section, the qualified revocable trust is treated and taxed for purposes of subtitle A of the Internal Revenue Code as part of its related estate, as defined in paragraph (b)(5) of this section (and not as a separate trust) during the election period, as defined in paragraph (b)(6) of this section. Rules regarding the use of taxpayer identification numbers (TINs) and the filing of a Form 1041, “U.S. Income Tax Return for Estates and Trusts,” for a qualified revocable trust are in paragraph (d) of this section. Rules regarding the tax treatment of an electing trust and related estate and the general filing requirements for the combined entity during the election period are in paragraph (e)(2) of this section. Rules regarding the tax treatment of an electing trust and its filing requirements during the election period if no executor, as defined in paragraph (b)(4) of this section, is appointed for a related estate are in paragraph (e)(3) of this section. Rules for determining the duration of the section 645 election period are in paragraph (f) of this section. Rules regarding the tax effects of the termination of the election are in paragraph (h) of this section. Rules regarding the tax consequences of the appointment of an executor after a trustee has made a section 645 election believing that an executor would not be appointed for a related estate are in paragraph (g) of this section.
(b) Definitions. For purposes of this section:
(1) Qualified revocable trust. A qualified revocable trust (QRT) is any trust (or portion thereof) that on the date of death of the decedent was treated as owned by the decedent under section 676 by reason of a power held by the decedent (determined without regard to section 672(e)). A trust that was treated as owned by the decedent under section 676 by reason of a power that was exercisable by the decedent only with the approval or consent of a nonadverse party or with the approval or consent of the decedent’s spouse is a QRT. A trust that was treated as owned by the decedent under section 676 solely by reason of a power held by a nonadverse party or by reason of a power held by the decedent’s spouse is not a QRT.
(2) Electing trust. An electing trust is a QRT for which a valid section 645 election has been made. Once a section 645 election has been made for the trust, the trust shall be treated as an electing trust throughout the entire election period.
(3) Decedent. The decedent is the individual who was treated as the owner of the QRT under section 676 on the date of that individual’s death.
(4) Executor. An executor is an executor, personal representative, or administrator that has obtained letters of appointment to administer the decedent’s estate through formal or informal appointment procedures. Solely for purposes of this paragraph (b)(4), an executor does not include a person that has actual or constructive possession of property of the decedent unless that person is also appointed or qualified as an executor, administrator, or personal representative of the decedent’s estate. If more than one jurisdiction has appointed an executor, the executor appointed in the domiciliary or primary proceeding is the executor of the related estate for purposes of this paragraph (b)(4).
(5) Related estate. A related estate is the estate of the decedent who was treated as the owner of the QRT on the date of the decedent’s death.
(6) Election period. The election period is the period of time during which an electing trust is treated and taxed as part of its related estate. The rules for determining the duration of the election period are in paragraph (f) of this section.
(c) The election—(1) Filing the election if there is an executor—(i) Time and manner for filing the election. If there is an executor of the related estate, the trustees of each QRT joining in the election and the executor of the related estate make an election under section 645 and this section to treat each QRT joining in the election as part of the related estate for purposes of subtitle A of the Internal Revenue Code by filing a form provided by the IRS for making the election (election form) properly completed and signed under penalties of perjury, or in any other manner prescribed after December 24, 2002 by forms provided by the Internal Revenue Service (IRS), or by other published guidance for making the election. For the election to be valid, the election form must be filed not later than the time prescribed under section 6072 for filing the Form 1041 for the first taxable year of the related estate (regardless of whether there is sufficient income to require the filing of that return). If an extension is granted for the filing of the Form 1041 for the first taxable year of the related estate, the election form will be timely filed if it is filed by the time prescribed for filing the Form 1041 including the extension granted with respect to the Form 1041.
(ii) Conditions to election. In addition to providing the information required by the election form, as a condition to a valid section 645 election, the trustee of each QRT joining in the election and the executor of the related estate agree, by signing the election form under penalties of perjury, that:
(A) With respect to a trustee—
(1) The trustee agrees to the election;
(2) The trustee is responsible for timely providing the executor of the related estate with all the trust information necessary to permit the executor to file a complete, accurate, and timely Form 1041 for the combined electing trust(s) and related estate for each taxable year during the election period;
(3) The trustee of each QRT joining the election and the executor of the related estate have agreed to allocate the tax burden of the combined electing trust(s) and related estate for each taxable year during the election period in a manner that reasonably reflects the tax obligations of each electing trust and the related estate; and
(4) The trustee is responsible for insuring that the electing trust’s share of the tax obligations of the combined electing trust(s) and related estate is timely paid to the Secretary.
(B) With respect to the executor—
(1) The executor agrees to the election;
(2) The executor is responsible for filing a complete, accurate, and timely Form 1041 for the combined electing trust(s) and related estate for each taxable year during the election period;
(3) The executor and the trustee of each QRT joining in the election have agreed to allocate the tax burden of the combined electing trust(s) and related estate for each taxable year during the election period in a manner that reasonably reflects the tax obligations of each electing trust and the related estate;
(4) The executor is responsible for insuring that the related estate’s share of the tax obligations of the combined electing trust(s) and related estate is timely paid to the Secretary.
(2) Filing the election if there is no executor—(i) Time and manner for filing the election. If there is no executor for a related estate, an election to treat one or more QRTs of the decedent as an estate for purposes of subtitle A of the Internal Revenue Code is made by the trustees of each QRT joining in the election, by filing a properly completed election form, or in any other manner prescribed after December 24, 2002 by forms provided by the IRS, or by other published guidance for making the election. For the election to be valid, the election form must be filed not later than the time prescribed under section 6072 for filing the Form 1041 for the first taxable year of the trust, taking into account the trustee’s election to treat the trust as an estate under section 645 (regardless of whether there is sufficient income to require the filing of that return). If an extension is granted for the filing of the Form 1041 for the first taxable year of the electing trust, the election form will be timely filed if it is filed by the time prescribed for filing the Form 1041 including the extension granted with respect to the filing of the Form 1041.
(ii) Conditions to election. In addition to providing the information required by the election form, as a condition to a valid section 645 election, the trustee of each QRT joining in the election agrees, by signing the election form under penalties of perjury, that—
(A) The trustee agrees to the election;
(B) If there is more than one QRT joining in the election, the trustees of each QRT joining in the election have appointed one trustee to be responsible for filing the Form 1041 for the combined electing trusts for each taxable year during the election period (filing trustee) and the filing trustee has agreed to accept that responsibility;
(C) If there is more than one QRT, the trustees of each QRT joining in the election have agreed to allocate the tax liability of the combined electing trusts for each taxable year during the election period in a manner that reasonably reflects the tax obligations of each electing trust;
(D) The trustee agrees to:
(1) Timely file a Form 1041 for the electing trust(s) for each taxable year during the election period; or
(2) If there is more than one QRT and the trustee is not the filing trustee, timely provide the filing trustee with all of the electing trust’s information necessary to permit the filing trustee to file a complete, accurate, and timely Form 1041 for the combined electing trusts for each taxable year during the election period;
(3) Insure that the electing trust’s share of the tax burden is timely paid to the Secretary;
(E) There is no executor and, to the knowledge and belief of the trustee, one will not be appointed; and
(F) If an executor is appointed after the filing of the election form and the executor agrees to the section 645 election, the trustee will complete and file a revised election form with the executor.
(3) Election for more than one QRT. If there is more than one QRT, the election may be made for some or all of the QRTs. If there is no executor, one trustee must be appointed by the trustees of the electing trusts to file Forms 1041 for the combined electing trusts filing as an estate during the election period.
(d) TIN and filing requirements for a QRT—(1) Obtaining a TIN. Regardless of whether there is an executor for a related estate and regardless of whether a section 645 election will be made for the QRT, a TIN must be obtained for the QRT following the death of the decedent. See § 301.6109-1(a)(3) of this chapter. The trustee must furnish this TIN to the payors of the QRT. See § 301.6109-1(a)(5) of this chapter for the definition of payor.
(2) Filing a Form 1041 for a QRT—(i) Option not to file a Form 1041 for a QRT for which a section 645 election will be made. If a section 645 election will be made for a QRT, the executor of the related estate, if any, and the trustee of the QRT may treat the QRT as an electing trust from the decedent’s date of death until the due date for the section 645 election. Accordingly, the trustee of the QRT is not required to file a Form 1041 for the QRT for the short taxable year beginning with the decedent’s date of death and ending December 31 of that year. However, if a QRT is treated as an electing trust under this paragraph from the decedent’s date of death until the due date for the section 645 election but a valid section 645 election is not made for the QRT, the QRT will be subject to penalties and interest for failing to timely file a Form 1041 and pay the tax due thereon.
(ii) Requirement to file a Form 1041 for a QRT if paragraph (d)(2)(i) of this section does not apply—(A) Requirement to file Form 1041. If the trustee of the QRT and the executor of the related estate, if any, do not treat the QRT as an electing trust as provided under paragraph (d)(2)(i) of this section, or if the trustee of the electing trust and the executor, if any, are uncertain whether a section 645 election will be made for a QRT, the trustee of the QRT must file a Form 1041 for the short taxable year beginning with the decedent’s death and ending December 31 of that year (unless the QRT is not required to file a Form 1041 under section 6012 for this period).
(B) Requirement to amend Form 1041 if a section 645 election is made—(1) If there is an executor. If there is an executor and a valid section 645 election is made for a QRT after a Form 1041 has been filed for the QRT as a trust (see paragraph (d)(2)(ii)(A) of this section), the trustee must amend the Form 1041. The QRT’s items of income, deduction, and credit must be excluded from the amended Form 1041 filed under this paragraph and must be included on the Form 1041 filed for the first taxable year of the combined electing trust and related estate under paragraph (e)(2)(ii)(A) of this section.
(2) If there is no executor. If there is no executor and a valid section 645 election is made for a QRT after a Form 1041 has been filed for the QRT as a trust (see paragraph (d)(2)(ii)(A) of this section) for the short taxable year beginning with the decedent’s death and ending December 31 of that year, the trustee must file an amended return for the QRT. The amended return must be filed consistent with paragraph (e)(3) of this section and must be filed by the due date of the Form 1041 for the QRT, taking into account the trustee’s election under section 645.
(e) Tax treatment and general filing requirements of electing trust and related estate during the election period—(1) Effect of election. The section 645 election once made is irrevocable.
(2) If there is an executor—(i) Tax treatment of the combined electing trust and related estate. If there is an executor, the electing trust is treated, during the election period, as part of the related estate for all purposes of subtitle A of the Internal Revenue Code. Thus, for example, the electing trust is treated as part of the related estate for purposes of the set-aside deduction under section 642(c)(2), the subchapter S shareholder requirements of section 1361(b)(1), and the special offset for rental real estate activities in section 469(i)(4).
(ii) Filing requirements—(A) Filing the Form 1041 for the combined electing trust and related estate during the election period. If there is an executor, the executor files a single income tax return annually (assuming a return is required under section 6012) under the name and TIN of the related estate for the combined electing trust and the related estate. Information regarding the name and TIN of each electing trust must be provided on the Form 1041 as required by the instructions to that form. The period of limitations provided in section 6501 for assessments with respect to an electing trust and the related estate starts with the filing of the return required under this paragraph. Except as required under the separate share rules of section 663(c), for purposes of filing the Form 1041 under this paragraph and computing the tax, the items of income, deduction, and credit of the electing trust and related estate are combined. One personal exemption in the amount of $600 is permitted under section 642(b), and the tax is computed under section 1(e), taking into account section 1(h), for the combined taxable income.
(B) Filing a Form 1041 for the electing trust is not required. Except for any final Form 1041 required to be filed under paragraph (h)(2)(i)(B) of this section, if there is an executor, the trustee of the electing trust does not file a Form 1041 for the electing trust during the election period. Although the trustee is not required to file a Form 1041 for the electing trust, the trustee of the electing trust must timely provide the executor of the related estate with all the trust information necessary to permit the executor to file a complete, accurate and timely Form 1041 for the combined electing trust and related estate. The trustee must also insure that the electing trust’s share of the tax obligations of the combined electing trust and related estate is timely paid to the Secretary. In certain situations, the trustee of a QRT may be required to file a Form 1041 for the QRT’s short taxable year beginning with the date of the decedent’s death and ending December 31 of that year. See paragraph (d)(2) of this section.
(iii) Application of the separate share rules—(A) Distributions to beneficiaries (other than to a share (or shares) of the combined electing trust and related estate). Under the separate share rules of section 663(c), the electing trust and related estate are treated as separate shares for purposes of computing distributable net income (DNI) and applying the distribution provisions of sections 661 and 662. Further, the electing trust share or the related estate share may each contain two or more shares. Thus, if during the taxable year, a distribution is made by the electing trust or the related estate, the DNI of the share making the distribution must be determined and the distribution provisions of sections 661 and 662 must be applied using the separately determined DNI applicable to the distributing share.
(B) Adjustments to the DNI of the separate shares for distributions between shares to which sections 661 and 662 would apply. A distribution from one share to another share to which sections 661 and 662 would apply if made to a beneficiary other than another share of the combined electing trust and related estate affects the computation of the DNI of the share making the distribution and the share receiving the distribution. The share making the distribution reduces its DNI by the amount of the distribution deduction that it would be entitled to under section 661 (determined without regard to section 661(c)), had the distribution been made to another beneficiary, and, solely for purposes of calculating DNI, the share receiving the distribution increases its gross income by the same amount. The distribution has the same character in the hands of the recipient share as in the hands of the distributing share. The following example illustrates the provisions of this paragraph (e)(2)(iii)(B):
(ii) For the same taxable year, the trust share has $25,000 of gross income and $5,000 of deductions. None of the modifications provided for under section 643(a) apply. In calculating the DNI for the trust share, the gross income of the trust share is increased by $10,000, the amount of the reduction in the DNI of the estate share as a result of the distribution to Trust. Thus, solely for purposes of calculating DNI, the trust share has gross income of $35,000, and taxable income of $30,000. Therefore, the trust share has $30,000 of DNI for the taxable year.
(iii) During the same taxable year, Trust distributes $35,000 to C. The distribution deduction reported on the Form 1041 filed for A’s estate and Trust is $30,000. As a result of the distribution by Trust to C, C must include $30,000 in gross income for the taxable year. The gross income reported on the Form 1041 filed for A’s estate and Trust is $40,000.
(iv) Application of the governing instrument requirement of section 642(c). A deduction is allowed in computing the taxable income of the combined electing trust and related estate to the extent permitted under section 642(c) for—
(A) Any amount of the gross income of the related estate that is paid or set aside during the taxable year pursuant to the terms of the governing instrument of the related estate for a purpose specified in section 170(c); and
(B) Any amount of gross income of the electing trust that is paid or set aside during the taxable year pursuant to the terms of the governing instrument of the electing trust for a purpose specified in section 170(c).
(3) If there is no executor—(i) Tax treatment of the electing trust. If there is no executor, the trustee treats the electing trust, during the election period, as an estate for all purposes of subtitle A of the Internal Revenue Code. Thus, for example, an electing trust is treated as an estate for purposes of the set-aside deduction under section 642(c)(2), the subchapter S shareholder requirements of section 1361(b)(1), and the special offset for rental real estate activities under section 469(i)(4). The trustee may also adopt a taxable year other than a calendar year.
(ii) Filing the Form 1041 for the electing trust. If there is no executor, the trustee of the electing trust must, during the election period, file a Form 1041, under the TIN obtained by the trustee under § 301.6109-1(a)(3) of this chapter upon the death of the decedent, treating the trust as an estate. If there is more than one electing trust, the Form 1041 must be filed by the filing trustee (see paragraph (c)(2)(ii)(B) of this section) under the name and TIN of the electing trust of the filing trustee. Information regarding the names and TINs of the other electing trusts must be provided on the Form 1041 as required by the instructions to that form. Any return filed in accordance with this paragraph shall be treated as a return filed for the electing trust (or trusts, if there is more than one electing trust) and not as a return filed for any subsequently discovered related estate. Accordingly, the period of limitations provided in section 6501 for assessments with respect to a subsequently discovered related estate does not start until a return is filed with respect to the related estate. See paragraph (g) of this section.
(4) Application of the section 6654(l)(2) to the electing trust. Each electing trust and related estate (if any) is treated as a separate taxpayer for all purposes of subtitle F of the Internal Revenue Code, including, without limitation, the application of section 6654. The provisions of section 6654(l)(2)(A) relating to the two year exception to an estate’s obligation to make estimated tax payments, however, will apply to each electing trust for which a section 645 election has been made.
(f) Duration of election period—(1) In general. The election period begins on the date of the decedent’s death and terminates on the earlier of the day on which both the electing trust and related estate, if any, have distributed all of their assets, or the day before the applicable date. The election does not apply to successor trusts (trusts that are distributees under the trust instrument).
(2) Definition of applicable date—(i) Applicable date if no Form 706 “United States Estate (and Generation Skipping Transfer) Tax Return” is required to be filed. If a Form 706 is not required to be filed as a result of the decedent’s death, the applicable date is the day which is 2 years after the date of the decedent’s death.
(ii) Applicable date if a Form 706 is required to be filed. If a Form 706 is required to be filed as a result of the decedent’s death, the applicable date is the later of the day that is 2 years after the date of the decedent’s death, or the day that is 6 months after the date of final determination of liability for estate tax. Solely for purposes of determining the applicable date under section 645, the date of final determination of liability is the earliest of the following—
(A) The date that is six months after the issuance by the Internal Revenue Service of an estate tax closing letter, unless a claim for refund with respect to the estate tax is filed within twelve months after the issuance of the letter;
(B) The date of a final disposition of a claim for refund, as defined in paragraph (f)(2)(iii) of this section, that resolves the liability for the estate tax, unless suit is instituted within six months after a final disposition of the claim;
(C) The date of execution of a settlement agreement with the Internal Revenue Service that determines the liability for the estate tax;
(D) The date of issuance of a decision, judgment, decree, or other order by a court of competent jurisdiction resolving the liability for the estate tax unless a notice of appeal or a petition for certiorari is filed within 90 days after the issuance of a decision, judgment, decree, or other order of a court; or
(E) The date of expiration of the period of limitations for assessment of the estate tax provided in section 6501.
(iii) Definition of final disposition of claim for refund. For purposes of paragraph (f)(2)(ii)(B) of this section, a claim for refund shall be deemed finally disposed of by the Secretary when all items have been either allowed or disallowed. If a waiver of notification with respect to disallowance is filed with respect to a claim for refund prior to disallowance of the claim, the claim for refund will be treated as disallowed on the date the waiver is filed.
(iv) Examples. The application of this paragraph (f)(2) is illustrated by the following examples:
(g) Executor appointed after the section 645 election is made—(1) Effect on the election. If an executor for the related estate is not appointed until after the trustee has made a valid section 645 election, the executor must agree to the trustee’s election, and the IRS must be notified of that agreement by the filing of a revised election form (completed as required by the instructions to that form) within 90 days of the appointment of the executor, for the election period to continue past the date of appointment of the executor. If the executor does not agree to the election or a revised election form is not timely filed as required by this paragraph, the election period terminates the day before the appointment of the executor. If the IRS issues other guidance after December 24, 2002 for notifying the IRS of the executor’s agreement to the election, the IRS must be notified in the manner provided in that guidance for the election period to continue.
(2) Continuation of election period—(i) Correction of returns filed before executor appointed. If the election period continues under paragraph (g)(1) of this section, the executor of the related estate and the trustee of each electing trust must file amended Forms 1041 to correct the Forms 1041 filed by the trustee before the executor was appointed. The amended Forms 1041 must be filed under the name and TIN of the electing trust and must reflect the items of income, deduction, and credit of the related estate and the electing trust. The name and TIN of the related estate must be provided on the amended Forms 1041 as required in the instructions to that Form. The amended return for the taxable year ending immediately before the executor was appointed must indicate that this Form 1041 is a final return. If the period of limitations for making assessments has expired with respect to the electing trust for any of the Forms 1041 filed by the trustee, the executor must file Forms 1041 for any items of income, deduction, and credit of the related estate that cannot be properly included on amended forms for the electing trust. The personal exemption under section 642(b) is not permitted to be taken on these Forms 1041 filed by the executor.
(ii) Returns filed after the appointment of the executor. All returns filed by the combined electing trust and related estate after the appointment of the executor are to be filed under the name and TIN of the related estate in accordance with paragraph (e)(2) of this section. Regardless of the change in the name and TIN under which the Forms 1041 for the combined electing trust and related estate are filed, the combined electing trust and related estate will be treated as the same entity before and after the executor is appointed.
(3) Termination of the election period. If the election period terminates under paragraph (g)(1) of this section, the executor must file Forms 1041 under the name and TIN of the estate for all taxable years of the related estate ending after the death of the decedent. The trustee of the electing trust is not required to amend any returns filed for the electing trust during the election period. Following termination of the election period, the trustee of the electing trust must obtain a new TIN. See § 301.6109-1(a)(4) of this chapter.
(h) Treatment of an electing trust and related estate following termination of the election—(1) The share (or shares) comprising the electing trust is deemed to be distributed upon termination of the election period. On the close of the last day of the election period, the combined electing trust and related estate, if there is an executor, or the electing trust, if there is no executor, is deemed to distribute the share (or shares, as determined under section 663(c)) comprising the electing trust to a new trust in a distribution to which sections 661 and 662 apply. All items of income, including net capital gains, that are attributable to the share (or shares) comprising the electing trust are included in the calculation of the distributable net income of the electing trust and treated as distributed by the combined electing trust and related estate, if there is an executor, or by the electing trust, if there is no executor, to the new trust. The combined electing trust and related estate, if there is an executor, or the electing trust, if there is no executor, is entitled to a distribution deduction to the extent permitted under section 661 in the taxable year in which the election period terminates as a result of the deemed distribution. The new trust shall include the amount of the deemed distribution in gross income to the extent required under section 662.
(2) Filing of the Form 1041 upon the termination of the section 645 election—(i) If there is an executor—(A) Filing the Form 1041 for the year of termination. If there is an executor, the Form 1041 filed under the name and TIN of the related estate for the taxable year in which the election terminates includes—
(1) The items of income, deduction, and credit of the electing trust attributable to the period beginning with the first day of the taxable year of the combined electing trust and related estate and ending with the last day of the election period;
(2) The items of income, deduction, and credit, if any, of the related estate for the entire taxable year; and
(3) A deduction for the deemed distribution of the share (or shares) comprising the electing trust to the new trust as provided for under paragraph (h)(1) of this section.
(B) Requirement to file a final Form 1041 under the name and TIN of the electing trust. If the electing trust terminates during the election period, the trustee of the electing trust must file a Form 1041 under the name and TIN of the electing trust and indicate that the return is a final return to notify the IRS that the electing trust is no longer in existence. The items of income, deduction, and credit of the trust are not reported on this final Form 1041 but on the appropriate Form 1041 filed for the combined electing trust and related estate.
(ii) If there is no executor. If there is no executor, the taxable year of the electing trust closes on the last day of the election period. A Form 1041 is filed in the manner prescribed under paragraph (e)(3)(ii) of this section reporting the items of income, deduction, and credit of the electing trust for the short period ending with the last day of the election period. The Form 1041 filed under this paragraph includes a distribution deduction for the deemed distribution provided for under paragraph (h)(1) of this section. The Form 1041 must indicate that it is a final return.
(3) Use of TINs following termination of the election—(i) If there is an executor. Upon termination of the section 645 election, a former electing trust may need to obtain a new TIN. See § 301.6109-1(a)(4) of this chapter. If the related estate continues after the termination of the election period, the related estate must continue to use the TIN assigned to the estate during the election period.
(ii) If there is no executor. If there is no executor, the former electing trust must obtain a new TIN if the trust will continue after the termination of the election period. See § 301.6109-1(a)(4) of this chapter.
(4) Taxable year of estate and trust upon termination of the election—(i) Estate—Upon termination of the section 645 election period, the taxable year of the estate is the same taxable year used during the election period.
(ii) Trust. Upon termination of the section 645 election, the taxable year of the new trust is the calendar year. See section 644.
(i) [Reserved]
(j) Effective date. Paragraphs (a), (b), (c), (d), (f), and (g) of this section apply to trusts and estates of decedents dying on or after December 24, 2002. Paragraphs (e) and (h) of this section apply to taxable years ending on or after December 24, 2002.
trusts which distribute current income only
§ 1.651(a)-1 Simple trusts; deduction for distributions; in general.
Section 651 is applicable only to a trust the governing instruments of which:
(a) Requires that the trust distribute all of its income currently for the taxable year, and
(b) Does not provide that any amounts may be paid, permanently set aside, or used in the taxable year for the charitable, etc., purposes specified in section 642(c),
§ 1.651(a)-2 Income required to be distributed currently.
(a) The determination of whether trust income is required to be distributed currently depends upon the terms of the trust instrument and the applicable local law. For this purpose, if the trust instrument provides that the trustee in determining the distributable income shall first retain a reserve for depreciation or otherwise make due allowance for keeping the trust corpus intact by retaining a reasonable amount of the current income for that purpose, the retention of current income for that purpose will not disqualify the trust from being a “simple” trust. The fiduciary must be under a duty to distribute the income currently even if, as a matter of practical necessity, the income is not distributed until after the close of the trust’s taxable year. For example: Under the terms of the trust instrument, all of the income is currently distributable to A. The trust reports on the calendar year basis and as a matter of practical necessity makes distribution to A of each quarter’s income on the fifteenth day of the month following the close of the quarter. The distribution made by the trust on January 15, 1955, of the income for the fourth quarter of 1954 does not disqualify the trust from treatment in 1955 under section 651, since the income is required to be distributed currently. However, if the terms of a trust require that none of the income be distributed until after the year of its receipt by the trust, the income of the trust is not required to be distributed currently and the trust is not a simple trust. For definition of the term “income” see section 643(b) and § 1.643(b)-1.
(b) It is immaterial, for purposes of determining whether all the income is required to be distributed currently, that the amount of income allocated to a particular beneficiary is not specified in the instrument. For example, if the fiduciary is required to distribute all the income currently, but has discretion to “sprinkle” the income among a class of beneficiaries, or among named beneficiaries, in such amount as he may see fit, all the income is required to be distributed currently, even though the amount distributable to a particular beneficiary is unknown until the fiduciary has exercised his discretion.
(c) If in one taxable year of a trust its income for that year is required or permitted to be accumulated, and in another taxable year its income for the year is required to be distributed currently (and no other amounts are distributed), the trust is a simple trust for the latter year. For example, a trust under which income may be accumulated until a beneficiary is 21 years old, and thereafter must be distributed currently, is a simple trust for taxable years beginning after the beneficiary reaches the age of 21 years in which no other amounts are distributed.
(d) If a trust distributes property in kind as part of its requirement to distribute currently all the income as defined under section 643(b) and the applicable regulations, the trust shall be treated as having sold the property for its fair market value on the date of distribution. If no amount in excess of the amount of income as defined under section 643(b) and the applicable regulations is distributed by the trust during the year, the trust will qualify for treatment under section 651 even though property in kind was distributed as part of a distribution of all such income. This paragraph (d) applies for taxable years of trusts ending after January 2, 2004.
§ 1.651(a)-3 Distribution of amounts other than income.
(a) A trust does not qualify for treatment under section 651 for any taxable year in which it actually distributes corpus. For example, a trust which is required to distribute all of its income currently would not qualify as a simple trust under section 651 in the year of its termination since in that year actual distributions of corpus would be made.
(b) A trust, otherwise qualifying under section 651, which may make a distribution of corpus in the discretion of the trustee, or which is required under the terms of its governing instrument to make a distribution of corpus upon the happening of a specified event, will be disqualified for treatment under section 651 only for the taxable year in which an actual distribution of corpus is made. For example: Under the terms of a trust, which is required to distribute all of its income currently, half of the corpus is to be distributed to beneficiary A when he becomes 30 years of age. The trust reports on the calendar year basis. On December 28, 1954, A becomes 30 years of age and the trustee distributes half of the corpus of the trust to him on January 3, 1955. The trust will be disqualified for treatment under section 651 only for the taxable year 1955, the year in which an actual distribution of corpus is made.
(c) See section 661 and the regulations thereunder for the treatment of trusts which distribute corpus or claim the charitable contributions deduction provided by section 642(c).
§ 1.651(a)-4 Charitable purposes.
A trust is not considered to be a trust which may pay, permanently set aside, or use any amount for charitable, etc., purposes for any taxable year for which it is not allowed a charitable, etc., deduction under section 642(c). Therefore, a trust with a remainder to a charitable organization is not disqualified for treatment as a simple trust if either (a) the remainder is subject to a contingency, so that no deduction would be allowed for capital gains or other amounts added to corpus as amounts permanently set aside for a charitable, etc., purpose under section 642 (c), or (b) the trust receives no capital gains or other income added to corpus for the taxable year for which such a deduction would be allowed.
§ 1.651(a)-5 Estates.
Subpart B has no application to an estate.
§ 1.651(b)-1 Deduction for distributions to beneficiaries.
In computing its taxable income, a simple trust is allowed a deduction for the amount of income which is required under the terms of the trust instrument to be distributed currently to beneficiaries. If the amount of income required to be distributed currently exceeds the distributable net income, the deduction allowable to the trust is limited to the amount of the distributable net income. For this purpose the amount of income required to be distributed currently, or distributable net income, whichever is applicable, does not include items of trust income (adjusted for deductions allocable thereto) which are not included in the gross income of the trust. For determination of the character of the income required to be distributed currently, see § 1.652(b)-2. Accordingly, for the purposes of determining the deduction allowable to the trust under section 651, distributable net income is computed without the modifications specified in paragraphs (5), (6), and (7) of section 643(a), relating to tax-exempt interest, foreign income, and excluded dividends. For example: Assume that the distributable net income of a trust as computed under section 643(a) amounts to $99,000 but includes nontaxable income of $9,000. Then distributable net income for the purpose of determining the deduction allowable under section 651 is $90,000 ($99,000 less $9,000 nontaxable income).
§ 1.652(a)-1 Simple trusts; inclusion of amounts in income of beneficiaries.
Subject to the rules in §§ 1.652(a)-2 and 1.652(b)-1, a beneficiary of a simple trust includes in his gross income for the taxable year the amounts of income required to be distributed to him for such year, whether or not distributed. Thus, the income of a simple trust is includible in the beneficiary’s gross income for the taxable year in which the income is required to be distributed currently even though, as a matter of practical necessity, the income is not distributed until after the close of the taxable year of the trust. See § 1.642(a)(3)-2 with respect to time of receipt of dividends. See § 1.652(c)-1 for treatment of amounts required to be distributed where a beneficiary and the trust have different taxable years. The term income required to be distributed currently includes income required to be distributed currently which is in fact used to discharge or satisfy any person’s legal obligation as that term is used in § 1.662(a)-4.
§ 1.652(a)-2 Distributions in excess of distributable net income.
If the amount of income required to be distributed currently to beneficiaries exceeds the distributable net income of the trust (as defined in section 643(a)), each beneficiary includes in his gross income an amount equivalent to his proportionate share of such distributable net income. Thus, if beneficiary A is to receive two-thirds of the trust income and B is to receive one-third, and the income required to be distributed currently is $99,000, A will receive $66,000 and B, $33,000. However, if the distributable net income, as determined under section 643(a) is only $90,000, A will include two-thirds ($60,000) of that sum in his gross income, and B will include one-third ($30,000) in his gross income. See §§ 1.652(b)-1 and 1.652(b)-2, however, for amounts which are not includible in the gross income of a beneficiary because of their tax-exempt character.
§ 1.652(b)-1 Character of amounts.
In determining the gross income of a beneficiary, the amounts includible under § 1.652(a)-1 have the same character in the hands of the beneficiary as in the hands of the trust. For example, to the extent that the amounts specified in § 1.652(a)-1 consist of income exempt from tax under section 103, such amounts are not included in the beneficiary’s gross income. Similarly, dividends distributed to a beneficiary retain their original character in the beneficiary’s hands for purposes of determining the availability to the beneficiary of the dividends received credit under section 34 (for dividends received on or before December 31, 1964) and the dividend exclusion under section 116. Also, to the extent that the amounts specified in § 1.652(a)-1 consist of “earned income” in the hands of the trust under the provisions of section 1348 such amount shall be treated under section 1348 as “earned income” in the hands of the beneficiary. Similarly, to the extent such amounts consist of an amount received as a part of a lump sum distribution from a qualified plan and to which the provisions of section 72(n) would apply in the hands of the trust, such amount shall be treated as subject to such section in the hands of the beneficiary except where such amount is deemed under section 666(a) to have been distributed in a preceding taxable year of the trust and the partial tax described in section 668(a)(2) is determined under section 668(b)(1)(B). The tax treatment of amounts determined under § 1.652(a)-1 depends upon the beneficiary’s status with respect to them not upon the status of the trust. Thus, if a beneficiary is deemed to have received foreign income of a foreign trust, the includibility of such income in his gross income depends upon his taxable status with respect to that income.
§ 1.652(b)-2 Allocation of income items.
(a) The amounts specified in § 1.652(a)-1 which are required to be included in the gross income of a beneficiary are treated as consisting of the same proportion of each class of items entering into distributable net income of the trust (as defined in section 643(a)) as the total of each class bears to such distributable net income, unless the terms of the trust specifically allocate different classes of income to different beneficiaries, or unless local law requires such an allocation. For example: Assume that under the terms of the governing instrument, beneficiary A is to receive currently one-half of the trust income and beneficiaries B and C are each to receive currently one-quarter, and the distributable net income of the trust (after allocation of expenses) consists of dividends of $10,000, taxable interest of $10,000, and tax-exempt interest of $4,000. A will be deemed to have received $5,000 of dividends, $5,000 of taxable interest, and $2,000 of tax-exempt interest; B and C will each be deemed to have received $2,500 of dividends, $2,500 of taxable interest, and $1,000 of tax-exempt interest. However, if the terms of the trust specifically allocate different classes of income to different beneficiaries, entirely or in part, or if local law requires such an allocation, each beneficiary will be deemed to have received those items of income specifically allocated to him.
(b) The terms of the trust are considered specifically to allocate different classes of income to different beneficiaries only to the extent that the allocation is required in the trust instrument, and only to the extent that it has an economic effect independent of the income tax consequences of the allocation. For example:
(1) Allocation pursuant to a provision in a trust instrument granting the trustee discretion to allocate different classes of income to different beneficiaries is not a specific allocation by the terms of the trust.
(2) Allocation pursuant to a provision directing the trustee to pay all of one income to A, or $10,000 out of the income to A, and the balance of the income to B, but directing the trustee first to allocate a specific class of income to A’s share (to the extent there is income of that class and to the extent it does not exceed A’s share) is not a specific allocation by the terms of the trust.
(3) Allocation pursuant to a provision directing the trustee to pay half the class of income (whatever it may be) to A, and the balance of the income to B, is a specific allocation by the terms of the trust.
§ 1.652(b)-3 Allocation of deductions.
Items of deduction of a trust that enter into the computation of distributable net income are to be allocated among the items of income in accordance with the following principles:
(a) All deductible items directly attributable to one class of income (except dividends excluded under section 116) are allocated thereto. For example, repairs to, taxes on, and other expenses directly attributable to the maintenance of rental property or the collection of rental income are allocated to rental income. See § 1.642(e)-1 for treatment of depreciation of rental property. Similarly, all expenditures directly attributable to a business carried on by a trust are allocated to the income from such business. If the deductions directly attributable to a particular class of income exceed that income, the excess is applied against other classes of income in the manner provided in paragraph (d) of this section.
(b) The deductions which are not directly attributable to a specific class of income may be allocated to any item of income (including capital gains) included in computing distributable net income, but a portion must be allocated to nontaxable income (except dividends excluded under section 116) pursuant to section 265 and the regulations thereunder. For example, if the income of a trust is $30,000 (after direct expenses), consisting equally of $10,000 of dividends, tax-exempt interest, and rents, and income commissions amount to $3,000, one-third ($1,000) of such commissions should be allocated to tax-exempt interest, but the balance of $2,000 may be allocated to the rents or dividends in such proportions as the trustee may elect. The fact that the governing instrument or applicable local law treats certain items of deduction as attributable to corpus or to income not included in distributable net income does not affect allocation under this paragraph. For instance, if in the example set forth in this paragraph the trust also had capital gains which are allocable to corpus under the terms of the trust instrument, no part of the deductions would be allocable thereto since the capital gains are excluded from the computation of distributable net income under section 643(a)(3).
(c) Examples of expenses which are considered as not directly attributable to a specific class of income are trustee’s commissions, the rental of safe deposit boxes, and State income and personal property taxes.
(d) To the extent that any items of deduction which are directly attributable to a class of income exceed that class of income, they may be allocated to any other class of income (including capital gains) included in distributable net income in the manner provided in paragraph (b) of this section, except that any excess deductions attributable to tax-exempt income (other than dividends excluded under section 116) may not be offset against any other class of income. See section 265 and the regulations thereunder. Thus, if the trust has rents, taxable interest, dividends, and tax-exempt interest, and the deductions directly attributable to the rents exceed the rental income, the excess may be allocated to the taxable interest or dividends in such proportions as the fiduciary may elect. However, if the excess deductions are attributable to the tax-exempt interest, they may not be allocated to either the rents, taxable interest, or dividends.
§ 1.652(c)-1 Different taxable years.
If a beneficiary has a different taxable year (as defined in section 441 or 442) from the taxable year of the trust, the amount he is required to include in gross income in accordance with section 652 (a) and (b) is based on the income of the trust for any taxable year or years ending with or within his taxable year. This rule applies to taxable years of normal duration as well as to so-called short taxable years. Income of the trust for its taxable year or years is determined in accordance with its method of accounting and without regard to that of the beneficiary.
§ 1.652(c)-2 Death of individual beneficiaries.
If income is required to be distributed currently to a beneficiary, by a trust for a taxable year which does not end with or within the last taxable year of a beneficiary (because of the beneficiary’s death), the extent to which the income is included in the gross income of the beneficiary for his last taxable year or in the gross income of his estate is determined by the computations under section 652 for the taxable year of the trust in which his last taxable year ends. Thus, the distributable net income of the taxable year of the trust determines the extent to which the income required to be distributed currently to the beneficiary is included in his gross income for his last taxable year or in the gross income of his estate. (Section 652(c) does not apply to such amounts.) The gross income for the last taxable year of a beneficiary on the cash basis includes only income actually distributed to the beneficiary before his death. Income required to be distributed, but in fact distributed to his estate, is included in the gross income of the estate as income in respect of a decedent under section 691. See paragraph (e) of § 1.663(c)-3 with respect to separate share treatment for the periods before and after the decedent’s death. If the trust does not qualify as a simple trust for the taxable year of the trust in which the last taxable year of the beneficiary ends, see section 662(c) and § 1.662(c)-2.
§ 1.652(c)-3 Termination of existence of other beneficiaries.
If the existence of a beneficiary which is not an individual terminates, the amount to be included under section 652(a) in its gross income for its last taxable year is computed with reference to §§ 1.652(c)-1 and 1.652(c)-2 as if the beneficiary were a deceased individual, except that income required to be distributed prior to the termination but actually distributed to the beneficiary’s successor in interest is included in the beneficiary’s income for its last taxable year.
§ 1.652(c)-4 Illustration of the provisions of sections 651 and 652.
The rules applicable to a trust required to distribute all of its income currently to its beneficiaries may be illustrated by the following example:
| Rents | $25,000 | |
| Dividends of domestic corporations | 50,000 | |
| Tax-exempt interest on municipal bonds | 25,000 | |
| Long-term capital gains | 15,000 | |
| Taxes and expenses directly attributable to rents | 5,000 | |
| Trustee’s commissions allocable to income account | 2,600 | |
| Trustee’s commissions allocable to principal account | 1,300 | |
| Depreciation | 5,000 | |
| Rents | $25,000 | |
| Dividends | 50,000 | |
| Tax-exempt interest | 25,000 | |
| Total | 100,000 | |
| Deductions: | ||
| Expenses directly attributable to rental income | $5,000 | |
| Trustee’s commissions allocable to income account | 2,600 | |
| 7,600 | ||
| Income computed under section 643(b) | 92,400 | |
| Rents | $25,000 | |
| Dividends | 50,000 | |
| Tax-exempt interest | $25,000 | |
| Less: Expenses allocable thereto (25,000/100,000 × $3,900) | 975 | |
| ———— | 24,025 | |
| Total | 99,025 | |
| Deductions: | ||
| Expenses directly attributable to rental income | $5,000 | |
| Trustee’s commissions ($3,900 less $975 allocable to tax-exempt interest) | 2,925 | |
| ———— | 7,925 | |
| Distributable net income | 91,100 | |
| Distributable net income computed under section 643(a) (see paragraph (c)) | $91,100 | |
| Less: | ||
| Tax-exempt interest as adjusted | $24,025 | |
| Dividend exclusion | 50 | |
| ———— | 24,075 | |
| Distributable net income as determined under section 651(b) | 67,025 | |
| Rents | $25,000 | |
| Dividends ($50,000 less $50 exclusion) | 49,950 | |
| Long-term capital gains | 15,000 | |
| Gross income | 89,950 | |
| Deductions: | ||
| Rental expenses | $5,000 | |
| Trustee’s commissions | 2,925 | |
| Capital gain deduction | 7,500 | |
| Distributions to beneficiaries | 67,025 | |
| Personal exemption | 300 | |
| ———— | 82,750 | |
| Taxable income | 7,200 | |
| Rents | Dividends | Tax-exempt interest | Total | |
|---|---|---|---|---|
| Income for trust accounting purposes | $25,000 | $50,000 | $25,000 | $100,000 |
| Less: | ||||
| Rental expenses | 5,000 | 5,000 | ||
| Trustee’s commissions | 2,925 | 975 | 3,900 | |
| Total deductions | 7,925 | 0 | 975 | 8,900 |
| Character of amounts in the hands of the beneficiaries | 17,075 | 50,000 | 24,025 | 1 91,100 |
1 Distributable net income.
estates and trusts which may accumulate income or which distribute corpus
§ 1.661(a)-1 Estates and trusts accumulating income or distributing corpus; general.
Subpart C, part I, subchapter J, chapter 1 of the Code, is applicable to all decedents’ estates and their beneficiaries, and to trusts and their beneficiaries other than trusts subject to the provisions of subpart B of such part I (relating to trusts which distribute current income only, or “simple” trusts). A trust which is required to distribute amounts other than income during the taxable year may be subject to subpart B, and not subpart C, in the absence of an actual distribution of amounts other than income during the taxable year. See §§ 1.651(a)-1 and 1.651(a)-3. A trust to which subpart C is applicable is referred to as a “complex” trust in this part. Section 661 has no application to amounts excluded under section 663(a).
§ 1.661(a)-2 Deduction for distributions to beneficiaries.
(a) In computing the taxable income of an estate or trust there is allowed under section 661(a) as a deduction for distributions to beneficiaries the sum of:
(1) The amount of income for the taxable year which is required to be distributed currently, and
(2) Any other amounts properly paid or credited or required to be distributed for such taxable year.
(b) The term income required to be distributed currently includes any amount required to be distributed which may be paid out of income or corpus (such as an annuity), to the extent it is paid out of income for the taxable year. See § 1.651(a)-2 which sets forth additional rules which are applicable in determining whether income of an estate or trust is required to be distributed currently.
(c) The term any other amounts properly paid, credited, or required to be distributed includes all amounts properly paid, credited, or required to be distributed by an estate or trust during the taxable year other than income required to be distributed currently. Thus, the term includes the payment of an annuity to the extent it is not paid out of income for the taxable year, and a distribution of property in kind (see paragraph (f) of this section). However, see section 663(a) and regulations thereunder for distributions which are not included. Where the income of an estate or trust may be accumulated or distributed in the discretion of the fiduciary, or where the fiduciary has a power to distribute corpus to a beneficiary, any such discretionary distribution would qualify under section 661(a)(2). The term also includes an amount applied or distributed for the support of a dependent of a grantor or of a trustee or cotrustee under the circumstances described in section 677(b) or section 678(c) out of corpus or out of other than income for the taxable year.
(d) The terms income required to be distributed currently and any other amounts properly paid or credited or required to be distributed also include any amount used to discharge or satisfy any person’s legal obligation as that term is used in § 1.662(a)-4.
(e) The terms income required to be distributed currently and any other amounts properly paid or credited or required to be distributed include amounts paid, or required to be paid, during the taxable year pursuant to a court order or decree or under local law, by a decedent’s estate as an allowance or award for the support of the decedent’s widow or other dependent for a limited period during the administration of the estate. The term any other amounts properly paid or credited or required to be distributed does not include the value of any interest in real estate owned by a decedent, title to which under local law passes directly from the decedent to his heirs or devisees.
(f) Gain or loss is realized by the trust or estate (or the other beneficiaries) by reason of a distribution of property in kind if the distribution is in satisfaction of a right to receive a distribution of a specific dollar amount, of specific property other than that distributed, or of income as defined under section 643(b) and the applicable regulations, if income is required to be distributed currently. In addition, gain or loss is realized if the trustee or executor makes the election to recognize gain or loss under section 643(e). This paragraph applies for taxable years of trusts and estates ending after January 2, 2004.
§ 1.661(b)-1 Character of amounts distributed; in general.
In the absence of specific provisions in the governing instrument for the allocation of different classes of income, or unless local law requires such an allocation, the amount deductible for distributions to beneficiaries under section 661(a) is treated as consisting of the same proportion of each class of items entering into the computation of distributable net income as the total of each class bears to the total distributable net income. For example, if a trust has distributable net income of $20,000, consisting of $10,000 each of taxable interest and royalties and distributes $10,000 to beneficiary A, the deduction of $10,000 allowable under section 661(a) is deemed to consist of $5,000 each of taxable interest and royalties, unless the trust instrument specifically provides for the distribution or accumulation of different classes of income or unless local law requires such an allocation. See also § 1.661(c)-1.
§ 1.661(b)-2 Character of amounts distributed when charitable contributions are made.
In the application of the rule stated in § 1.661(b)-1, the items of deduction which enter into the computation of distributable net income are allocated among the items of income which enter into the computation of distributable net income in accordance with the rules set forth in § 1.652(b)-3, except that, in the absence of specific provisions in the governing instrument, or unless local law requires a different apportionment, amounts paid, permanently set aside, or to be used for the charitable, etc., purposes specified in section 642(c) are first ratably apportioned among each class of items of income entering into the computation of the distributable net income of the estate or trust, in accordance with the rules set out in paragraph (b) of § 1.643(a)-5.
§ 1.661(c)-1 Limitation on deduction.
An estate or trust is not allowed a deduction under section 661(a) for any amount which is treated under section 661(b) as consisting of any item of distributable net income which is not included in the gross income of the estate or trust. For example, if in 1962, a trust, which reports on the calendar year basis, has distributable net income of $20,000, which is deemed to consist of $10,000 of dividends and $10,000 of tax-exempt interest, and distributes $10,000 to beneficiary A, the deduction allowable under section 661(a) (computed without regard to section 661(c)) would amount to $10,000 consisting of $5,000 of dividends and $5,000 of tax-exempt interest. The deduction actually allowable under section 661(a) as limited by section 661(c) is $4,975, since no deduction is allowable for the $5,000 of tax-exempt interest and the $25 deemed distributed out of the $50 of dividends excluded under section 116, items of distributable net income which are not included in the gross income of the estate or trust.
§ 1.661(c)-2 Illustration of the provisions of section 661.
The provisions of section 661 may be illustrated by the following example:
| Dividends | $10,000 | |
| Partially tax-exempt interest | 10,000 | |
| Fully tax-exempt interest | 10,000 | |
| Rents | 20,000 | |
| Total | 50,000 | |
| Less: | ||
| Rental expenses | $2,000 | |
| Depreciation | 3,000 | |
| Trustee’s commissions | 5,000 | |
| 10,000 | ||
| Income as computed under section 643(b) | 40,000 | |
| Rents | $20,000 | ||
| Dividends | 10,000 | ||
| Partially tax-exempt interest | 10,000 | ||
| Fully tax-exempt interest | $10,000 | ||
| Less: | |||
| Expenses allocable thereto (10,000/50,000 × $5,000) | $1,000 | ||
| Charitable contributions allocable thereto (10,000/50,000 × $10,000) | 2,000 | ||
| 3,000 | |||
| 7,000 | |||
| Total | 47,000 | ||
| Deductions: | |||
| Rental expenses | 2,000 | ||
| Depreciation of rental property | 3,000 | ||
| Trustee’s commissions ($5,000 less $1,000 allocated to tax-exempt interest) | 4,000 | ||
| Charitable contributions ($10,000 less $2,000 allocated to tax-exempt interest) | 8,000 | ||
| 17,000 | |||
| Distributable net income (section 643(a)) | 30,000 |
| Rental income | Taxable dividends | Excluded dividends | Partially tax-exempt interest | Tax-exempt interest | Total | |
|---|---|---|---|---|---|---|
| Trust income | $20,000 | $9,950 | $50 | $10,000 | $10,000 | $50,000 |
| Less: | ||||||
| Charitable contributions | 4,000 | 2,000 | 2,000 | 2,000 | 10,000 | |
| Rental expenses | 2,000 | 2,000 | ||||
| Depreciation | 3,000 | 3,000 | ||||
| Trustee’s commissions | 4,000 | 1,000 | 5,000 | |||
| Total deductions | 13,000 | 2,000 | 0 | 2,000 | 3,000 | 20,000 |
| Distributable net income | 7,000 | 7,950 | 50 | 8,000 | 7,000 | 30,000 |
| Amounts deemed distributed under section 661(a) before applying the limitation of section 661(c) | 3,500 | 3,975 | 25 | 4,000 | 3,500 | 15,000 |
| Rental income | $20,000 | |
| Dividends ($10,000 less $50 exclusion) | 9,950 | |
| Partially tax-exempt interest | 10,000 | |
| Gross income | 39,950 | |
| Deductions: | ||
| Rental expenses | $2,000 | |
| Depreciation of rental property | 3,000 | |
| Trustee’s commissions | 4,000 | |
| Charitable contributions | 8,000 | |
| Distributions to A | 11,475 | |
| Personal exemption | 100 | |
| 28,575 | ||
| Taxable income | 11,375 | |
(g) Dividends of $4,000 allocable to A are to be aggregated with his other dividends (if any) for purposes of the dividend exclusion under section 116 and the dividend received credit under section 84.
§ 1.662(a)-1 Inclusion of amounts in gross income of beneficiaries of estates and complex trusts; general.
There is included in the gross income of a beneficiary of an estate or complex trust the sum of:
(a) Amounts of income required to be distributed currently to him, and
(b) All other amounts properly paid, credited, or required to be distributed to him
§ 1.662(a)-2 Currently distributable income.
(a) There is first included in the gross income of each beneficiary under section 662(a)(1) the amount of income for the taxable year of the estate or trust required to be distributed currently to him, subject to the provisions of paragraph (b) of this section. Such amount is included in the beneficiary’s gross income whether or not it is actually distributed.
(b) If the amount of income required to be distributed currently to all beneficiaries exceeds the distributable net income (as defined in section 643(a) but computed without taking into account the payment, crediting, or setting aside of an amount for which a charitable contributions deduction is allowable under section 642(c)) of the estate or trust, then there is included in the gross income of each beneficiary an amount which bears the same ratio to distributable net income (as so computed) as the amount of income required to be distributed currently to the beneficiary bears to the amount required to be distributed currently to all beneficiaries.
(c) The phrase the amount of income for the taxable year required to be distributed currently includes any amount required to be paid out of income or corpus to the extent the amount is satisfied out of income for the taxable year. Thus, an annuity required to be paid in all events (either out of income or corpus) would qualify as income required to be distributed currently to the extent there is income (as defined in section 643(b)) not paid, credited, or required to be distributed to other beneficiaries for the taxable year. If an annuity or a portion of an annuity is deemed under this paragraph to be income required to be distributed currently, it is treated in all respects in the same manner as an amount of income actually required to be distributed currently. The phrase the amount of income for the taxable year required to be distributed currently also includes any amount required to be paid during the taxable year in all events (either out of income or corpus) pursuant to a court order or decree or under local law, by a decedent’s estate as an allowance or award for the support of the decedent’s widow or other dependent for a limited period during the administration of the estate to the extent there is income (as defined in section 643(b)) of the estate for the taxable year not paid, credited, or required to be distributed to other beneficiaries.
(d) If an annuity is paid, credited, or required to be distributed tax free, that is, under a provision whereby the executor or trustee will pay the income tax of the annuitant resulting from the receipt of the annuity, the payment of or for the tax by the executor or trustee will be treated as income paid, credited, or required to be distributed currently to the extent it is made out of income.
(e) The application of the rules stated in this section may be illustrated by the following examples:
(2) The amounts treated as distributed currently under section 662(a)(1) total $25,000 ($20,000 to A and $5,000 to B). Since the charitable contribution is out of income the amount of income available for B’s annuity is only $5,000. The distributable net income of the trust computed under section 643(a) without taking into consideration the charitable contributions deduction of $5,000 as provided by section 661(a)(1), is $30,000. Since the amounts treated as distributed currently of $25,000 do not exceed the distributable net income (as modified) of $30,000, A is required to include $20,000 in his gross income and B is required to include $5,000 in his gross income under section 662(a)(1).
§ 1.662(a)-3 Other amounts distributed.
(a) There is included in the gross income of a beneficiary under section 662(a)(2) any amount properly paid, credited, or required to be distributed to the beneficiary for the taxable year, other than (1) income required to be distributed currently, as determined under § 1.662(a)-2, (2) amounts excluded under section 663(a) and the regulations thereunder, and (3) amounts in excess of distributable net income (see paragraph (c) of this section). An amount which is credited or required to be distributed is included in the gross income of a beneficiary whether or not it is actually distributed.
(b) Some of the payments to be included under paragraph (a) of this section are: (1) A distribution made to a beneficiary in the discretion of the fiduciary; (2) a distribution required by the terms of the governing instrument upon the happening of a specified event; (3) an annuity which is required to be paid in all events but which is payable only out of corpus; (4) a distribution of property in kind (see paragraph (f) of § 1.661(a)-2); (5) an amount applied or distributed for the support of a dependent of a grantor or a trustee or cotrustee under the circumstances specified in section 677(b) or section 678(c) out of corpus or out of other than income for the taxable year; and (6) an amount required to be paid during the taxable year pursuant to a court order or decree or under local law, by a decedent’s estate as an allowance or award for the support of the decedent’s widow or other dependent for a limited period during the administration of the estate which is payable only out of corpus of the estate under the order or decree or local law.
(c) If the sum of the amounts of income required to be distributed currently (as determined under § 1.662(a)-2) and other amounts properly paid, credited, or required to be distributed (as determined under paragraph (a) of this section) exceeds distributable net income (as defined in section 643(a)), then such other amounts properly paid, credited, or required to be distributed are included in gross income of the beneficiary but only to the extent of the excess of such distributable net income over the amounts of income required to be distributed currently. If the other amounts are paid, credited, or required to be distributed to more than one beneficiary, each beneficiary includes in gross income his proportionate share of the amount includible in gross income pursuant to the preceding sentence. The proportionate share is an amount which bears the same ratio to distributable net income (reduced by amounts of income required to be distributed currently) as the other amounts (as determined under paragraphs (a) and (d) of this section) distributed to the beneficiary bear to the other amounts distributed to all beneficiaries. For treatment of excess distributions by trusts, see sections 665 to 668, inclusive, and the regulations thereunder.
(d) The application of the rules stated in this section may be illustrated by the following example:
§ 1.662(a)-4 Amounts used in discharge of a legal obligation.
Any amount which, pursuant to the terms of a will or trust instrument, is used in full or partial discharge or satisfaction of a legal obligation of any person is included in the gross income of such person under section 662(a) (1) or (2), whichever is applicable, as though directly distributed to him as a beneficiary, except in cases to which section 71 (relating to alimony payments) or section 682 (relating to income of a trust in case of divorce, etc.) applies. The term legal obligation includes a legal obligation to support another person if, and only if, the obligation is not affected by the adequacy of the dependent’s own resources. For example, a parent has a “legal obligation” within the meaning of the preceding sentence to support his minor child if under local law property or income from property owned by the child cannot be used for his support so long as his parent is able to support him. On the other hand, if under local law a mother may use the resources of a child for the child’s support in lieu of supporting him herself, no obligation of support exists within the meaning of this paragraph, whether or not income is actually used for support. Similarly, since under local law a child ordinarily is obligated to support his parent only if the parent’s earnings and resources are insufficient for the purpose, no obligation exists whether or not the parent’s earnings and resources are sufficient. In any event the amount of trust income which is included in the gross income of a person obligated to support a dependent is limited by the extent of his legal obligation under local law. In the case of a parent’s obligation to support his child, to the extent that the parent’s legal obligation of support, including education, is determined under local law by the family’s station in life and by the means of the parent, it is to be determined without consideration of the trust income in question.
§ 1.662(b)-1 Character of amounts; when no charitable contributions are made.
In determining the amount includible in the gross income of a beneficiary, the amounts which are determined under section 662(a) and §§ 1.662(a)-1 through 1.662(a)-4 shall have the same character in the hands of the beneficiary as in the hands of the estate or trust. The amounts are treated as consisting of the same proportion of each class of items entering into the computation of distributable net income as the total of each class bears to the total distributable net income of the estate or trust unless the terms of the governing instrument specifically allocate different classes of income to different beneficiaries, or unless local law requires such an allocation. For this purpose, the principles contained in § 1.652(b)-1 shall apply.
§ 1.662(b)-2 Character of amounts; when charitable contributions are made.
When a charitable contribution is made, the principles contained in §§ 1.652(b)-1 and 1.662(b)-1 generally apply. However, before the allocation of other deductions among the items of distributable net income, the charitable contributions deduction allowed under section 642(c) is (in the absence of specific allocation under the terms of the governing instrument or the requirement under local law of a different allocation) allocated among the classes of income entering into the computation of estate or trust income in accordance with the rules set forth in paragraph (b) of § 1.643(a)-5. In the application of the preceding sentence, for the purpose of allocating items of income and deductions to beneficiaries to whom income is required to be distributed currently, the amount of the charitable contributions deduction is disregarded to the extent that it exceeds the income of the trust for the taxable year reduced by amounts for the taxable year required to be distributed currently. The application of this section may be illustrated by the following examples (of which example (1) is illustrative of the preceding sentence):
(b) Distributable net income for the purpose of determining the character of the distribution to A is $30,000 (the charitable contributions deduction, for this purpose, being taken into account only to the extent of $20,000, the difference between the income of the trust for the taxable year, $50,000, and the amount required to be distributed currently, $30,000).
(c) The charitable contributions deduction taken into account, $20,000, is allocated proportionately to the items of income of the trust, $16,000 to taxable interest and $4,000 to tax-exempt income.
(d) Under section 662(a)(1), the amount of income required to be distributed currently to A is $30,000, which consists of the balance of these items, $24,000 of taxable interest and $6,000 of tax-exempt income.
(e) In determining the amount to be included in the gross income of B under section 662 for the taxable year, however, the entire charitable contributions deduction is taken into account, with the result that there is no distributable net income and therefore no amount to be included in gross income.
(f) See subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code for application of the throwback provisions to the distribution made to B.
§ 1.662(c)-1 Different taxable years.
If a beneficiary has a different taxable year (as defined in section 441 or 442) from the taxable year of an estate or trust, the amount he is required to include in gross income in accordance with section 662 (a) and (b) is based upon the distributable net income of the estate or trust and the amounts properly paid, credited, or required to be distributed to the beneficiary for any taxable year or years of the estate or trust ending with or within his taxable year. This rule applies as to so-called short taxable years as well as taxable years of normal duration. Income of an estate or trust for its taxable year or years is determined in accordance with its method of accounting and without regard to that of the beneficiary.
§ 1.662(c)-2 Death of individual beneficiary.
If an amount specified in section 662(a) (1) or (2) is paid, credited, or required to be distributed by an estate or trust for a taxable year which does not end with or within the last taxable year of a beneficiary (because of the beneficiary’s death), the extent to which the amount is included in the gross income of the beneficiary for his last taxable year or in the gross income of his estate is determined by the computations under section 662 for the taxable year of the estate or trust in which his last taxable year ends. Thus, the distributable net income and the amounts paid, credited, or required to be distributed for the taxable year of the estate or trust, determine the extent to which the amounts paid, credited, or required to be distributed to the beneficiary are included in his gross income for his last taxable year or in the gross income of his estate. (Section 662(c) does not apply to such amounts.) The gross income for the last taxable year of a beneficiary on the cash basis includes only income actually distributed to the beneficiary before his death. Income required to be distributed, but in fact distributed to his estate, is included in the gross income of the estate as income in respect of a decedent under section 691. See paragraph (e) of § 1.663(c)-3 with respect to separate share treatment for the periods before and after the death of a trust’s beneficiary.
§ 1.662(c)-3 Termination of existence of other beneficiaries.
If the existence of a beneficiary which is not an individual terminates, the amount to be included under section 662(a) in its gross income for the last taxable year is computed with reference to §§ 1.662(c)-1 and 1.662(c)-2 as if the beneficiary were a deceased individual, except that income required to be distributed prior to the termination but actually distributed to the beneficiary’s successor in interest is included in the beneficiary’s income for its last taxable year.
§ 1.662(c)-4 Illustration of the provisions of sections 661 and 662.
The provisions of sections 661 and 662 may be illustrated in general by the following example:
| Rents | $50,000 | |
| Dividends of domestic corporations | 50,000 | |
| Tax-exempt interest | 20,000 | |
| Partially tax-exempt interest | 10,000 | |
| Capital gains (long term) | 20,000 | |
| Depreciation of rental property | 10,000 | |
| Expenses attributable to rental income | 15,400 | |
| Trustee’s commissions allocable to income account | 2,800 | |
| Trustee’s commissions allocable to principal account | 1,100 | |
| Rents | $50,000 | |
| Dividends | 50,000 | |
| Tax-exempt interest | 20,000 | |
| Partially tax-exempt interest | 10,000 | |
| Total | 130,000 | |
| Less: | ||
| Rental expenses | $15,400 | |
| Trustee’s commissions allocable to income account | 2,800 | |
| ———— | 18,200 | |
| Income as computed under section 643(b) | 111,800 | |
| Rents | $50,000 | ||
| Dividends | 50,000 | ||
| Partially tax-exempt interest | 10,000 | ||
| Tax-exempt interest | $20,000 | ||
| Less: | |||
| Trustee’s commissions allocable thereto (20,000/130,000 of $3,900) | $600 | ||
| Charitable contributions allocable thereto (20,000/130,000 of $27,950) | 4,300 | ||
| ————— | 4,900 | ||
| ————— | 15,100 | ||
| Total | 125,100 | ||
| Deductions: | |||
| Rental expenses | 15,400 | ||
| Trustee’s commissions ($3,900 less $600 allocated to tax-exempt interest) | 3,300 | ||
| Charitable deduction ($27,950 less $4,300 attributable to tax-exempt interest) | 23,650 | ||
| ————— | 42,350 | ||
| Distributable net income | 82,750 |
| Distributable net income | $82,750 | |
| Less: | ||
| Tax-exempt interest (as adjusted for expenses and the charitable contributions) | $15,100 | |
| Dividend exclusion allowable under section 116 | 50 | |
| ———— | 15,150 | |
| Deduction allowable under section 661(a) | 67,600 | |
| Rents | Taxable dividends | Excluded dividends | Tax exempt interest | Partially tax exempt interest | Total | |
|---|---|---|---|---|---|---|
| Trust income | $50,000 | $49,950 | $50 | $20,000 | $10,000 | $130,000 |
| Less: | ||||||
| Charitable contribution | 10,750 | 10,750 | 4,300 | 2,150 | 27,950 | |
| Rental expenses | 15,400 | 15,400 | ||||
| Trustee’s commissions | 3,300 | 600 | 3,900 | |||
| Total deductions | 29,450 | 10,750 | 0 | 4,900 | 2,150 | 47,250 |
| Amounts distributable to beneficiaries | 20,550 | 39,200 | 50 | 15,100 | 7,850 | 82,750 |
| Rental income | $50,000 | |
| Dividends ($50,000 less $50 exclusion) | 49,950 | |
| Partially tax-exempt interest | 10,000 | |
| Capital gains | 20,000 | |
| Gross income | 129,950 | |
| Deductions: | ||
| Rental expenses | 15,400 | |
| Trustee’s commissions | 3,300 | |
| Charitable contributions | 23,650 | |
| Capital gain deduction | 10,000 | |
| Distributions to beneficiaries | 67,600 | |
| Personal exemption | 100 | |
| 120,050 | ||
| Taxable income | 9,900 | |
| Rents (20,550/82,750 × $55,900) | $13,882 | |
| Dividends (39,250/82,750 × $55,900) | 26,515 | |
| Partially tax-exempt interest (7,850/ 82,750 × $55,900) | 5,303 | |
| Tax-exempt interest (15,100/82,750 × $55,900) | 10,200 | |
| Total | 55,900 | |
| Rents (20,550/82,750 × $26,850) | $6,668 | |
| Dividends (39,250/82,750 × $26,850) | 12,735 | |
| Partially tax-exempt interest (7,850/ 82,750 × $26,850) | 2,547 | |
| Tax-exempt interest (15,100/82,750 × $26,850) | 4,900 | |
| Total | 26,850 | |
(j) The remaining $2,500 of the depreciation deduction is allocated to the amount distributed to charity X and is hence non-deductible by the trust, W, or D. (See § 1.642(e)-1.)
§ 1.663(a)-1 Special rules applicable to sections 661 and 662; exclusions; gifts, bequests, etc.
(a) In general. A gift or bequest of a specific sum of money or of specific property, which is required by the specific terms of the will or trust instrument and is properly paid or credited to a beneficiary, is not allowed as a deduction to an estate or trust under section 661 and is not included in the gross income of a beneficiary under section 662, unless under the terms of the will or trust instrument the gift or bequest is to be paid or credited to the recipient in more than three installments. Thus, in order for a gift or bequest to be excludable from the gross income of the recipient, (1) it must qualify as a gift or bequest of a specific sum of money or of specific property (see paragraph (b) of this section), and (2) the terms of the governing instrument must not provide for its payment in more than three installments (see paragraph (c) of this section). The date when the estate came into existence or the date when the trust was created is immaterial.
(b) Definition of a gift or bequest of a specific sum of money or of specific property. (1) In order to qualify as a gift or bequest of a specific sum of money or of specific property under section 663(a), the amount of money or the identity of the specific property must be ascertainable under the terms of a testator’s will as of the date of his death, or under the terms of an inter vivos trust instrument as of the date of the inception of the trust. For example, bequests to a decedent’s son of the decedent’s interest in a partnership and to his daughter of a sum of money equal to the value of the partnership interest are bequests of specific property and of a specific sum of money, respectively. On the other hand, a bequest to the decedent’s spouse of money or property, to be selected by the decedent’s executor, equal in value to a fraction of the decedent’s “adjusted gross estate” is neither a bequest of a specific sum of money or of specific property. The identity of the property and the amount of money specified in the preceding sentence are dependent both on the exercise of the executor’s discretion and on the payment of administration expenses and other charges, neither of which are facts existing on the date of the decedent’s death. It is immaterial that the value of the bequest is determinable after the decedent’s death before the bequest is satisfied (so that gain or loss may be realized by the estate in the transfer of property in satisfaction of it).
(2) The following amounts are not considered as gifts or bequests of a sum of money or of specific property within the meaning of this paragraph:
(i) An amount which can be paid or credited only from the income of an estate or trust, whether from the income for the year of payment or crediting, or from the income accumulated from a prior year;
(ii) An annuity, or periodic gifts of specific property in lieu of or having the effect of an annuity;
(iii) A residuary estate or the corpus of a trust; or
(iv) A gift or bequest paid in a lump sum or in not more than three installments, if the gift or bequest is required to be paid in more than three installments under the terms of the governing instrument.
(3) The provisions of subparagraphs (1) and (2) of this paragraph may be illustrated by the following examples, in which it is assumed that the gift or bequest is not required to be made in more than three installments (see paragraph (c)):
(4) A gift or bequest of a specific sum of money or of specific property is not disqualified under this paragraph solely because its payment is subject to a condition. For example, provision for a payment by a trust to beneficiary A of $10,000 when he reaches age 25, and $10,000 when he reaches age 30, with payment over to B of any amount not paid to A because of his death, is a gift to A of a specific sum of money payable in two installments, within the meaning of this paragraph, even though the exact amount payable to A cannot be ascertained with certainty under the terms of the trust instrument.
(c) Installment payments. (1) In determining whether a gift or bequest of a specific sum of money or of specific property, as defined in paragraph (b) of this section, is required to be paid or credited to a particular beneficiary in more than three installments:
(i) Gifts or bequests of articles for personal use (such as personal and household effects, automobiles, and the like) are disregarded.
(ii) Specifically devised real property, the title to which passes directly from the decedent to the devisee under local law, is not taken into account, since it would not constitute an amount paid, credited, or required to be distributed under section 661 (see paragraph (e) of § 1.661(a)-2).
(iii) All gifts and bequests under a decedent’s will (which are not disregarded pursuant to subdivisions (i) and (ii) of this subparagraph) for which no time of payment or crediting is specified, and which are to be paid or credited in the ordinary course of administration of the decedent’s estate, are considered as required to be paid or credited in a single installment.
(iv) All gifts and bequests (which are not disregarded pursuant to subdivisions (i) and (ii) of this subparagraph) payable at any one specified time under the terms of the governing instrument are taken into account as a single installment.
(2) The application of the rules stated in subparagraph (1) of this paragraph may be illustrated by the following examples:
(ii) The furniture, watch, automobile, and the farm are excluded in determining whether any gift or bequest is required to be paid or credited to A in more than three installments. These items qualify for the exclusion under section 663(a)(1) regardless of the treatment of the other items of property bequeathed to A.
(iii) The $10,000 in cash, the shares of X company stock, the grain, the cattle and the assets required to create the trust, to be paid or credited by the estate to A and the trust are considered as required to be paid or credited in a single installment to each, regardless of the manner of payment or distribution by the executor, since no time of payment or crediting is specified in the will. The $10,000 in cash and shares of Y company stock required to be distributed by the trust to A when he is 25 years old are considered as required to be paid or distributed as one installment under the trust. Likewise, the distributions to be made by the trust to A when he is 30 and 35 years old are each considered as one installment under the trust. Since the total number of installments to be made by the estate does not exceed three, all of the items of money and property distributed by the estate qualify for the exclusion under section 663(a)(1). Similarly, the three distributions by the trust qualify.
§ 1.663(a)-2 Charitable, etc., distributions.
Any amount paid, permanently set aside, or to be used for the charitable, etc., purposes specified in section 642(c) and which is allowable as a deduction under that section is not allowed as a deduction to an estate or trust under section 661 or treated as an amount distributed for purposes of determining the amounts includible in gross income of beneficiaries under section 662. Amounts paid, permanently set aside, or to be used for charitable, etc., purposes are deductible by estates or trusts only as provided in section 642(c). For purposes of this section, the deduction provided in section 642(c) is computed without regard to the provisions of section 508(d), section 681, or section 4948(c)(4) (concerning unrelated business income and private foundations).
§ 1.663(a)-3 Denial of double deduction.
No amount deemed to have been distributed to a beneficiary in a preceding year under section 651 or 661 is included in amounts falling within section 661(a) or 662(a). For example, assume that all of the income of a trust is required to be distributed currently to beneficiary A and both the trust and A report on the calendar year basis. For administrative convenience, the trustee distributes in January and February 1956 a portion of the income of the trust required to be distributed in 1955. The portion of the income for 1955 which was distributed by the trust in 1956 may not be claimed as a deduction by the trust for 1956 since it is deductible by the trust and includible in A’s gross income for the taxable year 1955.
§ 1.663(b)-1 Distributions in first 65 days of taxable year; scope.
(a) Taxable years beginning after December 31, 1968—(1) General rule. With respect to taxable years beginning after December 31, 1968, the fiduciary of a trust may elect under section (b) to 663 treat any amount or portion thereof that is properly paid or credited to a beneficiary within the first 65 days following the close of the taxable year as an amount that was properly paid or credited on the last day of such taxable year.
(2) Effect of election. (i) An election is effective only with respect to the taxable year for which the election is made. In the case of distributions made after May 8, 1972, the amount to which the election applies shall not exceed:
(a) The amount of income of the trust (as defined in § 1.643(b)-1) for the taxable year for which the election is made, or
(b) The amount of distributable net income of the trust (as defined in §§ 1.643(a)-1 through 1.643(a)-7) for such taxable year, if greater,
(ii) If an election is made with respect to a taxable year of a trust, this section shall apply only to those amounts which are properly paid or credited within the first 65 days following such year and which are so designated by the fiduciary in his election. Any amount considered under section 663(b) as having been distributed in the preceding taxable year shall be so treated for all purposes. For example, in determining the beneficiary’s tax liability, such amount shall be considered as having been received by the beneficiary in his taxable year in which or with which the last day of the preceding taxable year of the trust ends.
(b) Taxable years beginning before January 1, 1969. With respect to taxable years of a trust beginning before January 1, 1969, the fiduciary of the trust may elect under section 663(b) to treat distributions within the first 65 days following such taxable year as amounts which were paid or credited on the last day of such taxable year, if:
(1) The trust was in existence prior to January 1, 1954;
(2) An amount in excess of the income of the immediately preceding taxable year may not (under the terms of the governing instrument) be distributed in any taxable year; and
(3) The fiduciary elects (as provided in § 1.663(b)-2) to have section 663(b) apply.
§ 1.663(b)-2 Election.
(a) Manner and time of election; irrevocability—(1) When return is required to be filed. If a trust return is required to be filed for the taxable year of the trust for which the election is made, the election shall be made in the appropriate place on such return. The election under this subparagraph shall be made not later than the time prescribed by law for filing such return (including extensions thereof). Such election shall become irrevocable after the last day prescribed for making it.
(2) When no return is required to be filed. If no return is required to be filed for the taxable year of the trust for which the election is made, the election shall be made in a statement filed with the internal revenue office with which a return by such trust would be filed if such trust were required to file a return for such taxable year. See section 6091 and the regulations thereunder for place for filing returns. The election under this subparagraph shall be made not later than the time prescribed by law for filing a return if such trust were required to file a return for such taxable year. Such election shall become irrevocable after the last day prescribed for making it.
(b) Elections under prior law. Elections made pursuant to section 663(b) prior to its amendment by section 331(b) of the Tax Reform Act of 1969 (83 Stat. 598), which, under prior law, were irrevocable for the taxable year for which the election was made and all subsequent years, are not effective for taxable years beginning after December 31, 1968. In the case of a trust for which an election was made under prior law, the fiduciary shall make the election for each taxable year beginning after December 31, 1968, for which the treatment provided by section 663(b) is desired.
(a) If a single trust (or estate) has more than one beneficiary, and if different beneficiaries have substantially separate and independent shares, their shares are treated as separate trusts (or estates) for the sole purpose of determining the amount of distributable net income allocable to the respective beneficiaries under sections 661 and 662. Application of this rule will be significant in, for example, situations in which income is accumulated for beneficiary A but a distribution is made to beneficiary B of both income and corpus in an amount exceeding the share of income that would be distributable to B had there been separate trusts (or estates). In the absence of a separate share rule B would be taxed on income which is accumulated for A. The division of distributable net income into separate shares will limit the tax liability of B. Section 663(c) does not affect the principles of applicable law in situations in which a single trust (or estate) instrument creates not one but several separate trusts (or estates), as opposed to separate shares in the same trust (or estate) within the meaning of this section.
(b) The separate share rule does not permit the treatment of separate shares as separate trusts (or estates) for any purpose other than the application of distributable net income. It does not, for instance, permit the treatment of separate shares as separate trusts (or estates) for purposes of:
(1) The filing of returns and payment of tax,
(2) The deduction of personal exemption under section 642(b), and
(3) The allowance to beneficiaries succeeding to the trust (or estate) property of excess deductions and unused net operating loss and capital loss carryovers on termination of the trust (or estate) under section 642(h).
(c) The separate share rule may be applicable even though separate and independent accounts are not maintained and are not required to be maintained for each share on the books of account of the trust (or estate), and even though no physical segregation of assets is made or required.
(d) Separate share treatment is not elective. Thus, if a trust (or estate) is properly treated as having separate and independent shares, such treatment must prevail in all taxable years of the trust (or estate) unless an event occurs as a result of which the terms of the trust (or estate) instrument and the requirements of proper administration require different treatment.
§ 1.663(c)-2 Rules of administration.
(a) When separate shares come into existence. A separate share comes into existence upon the earliest moment that a fiduciary may reasonably determine, based upon the known facts, that a separate economic interest exists.
(b) Computation of distributable net income for each separate share—(1) General rule. The amount of distributable net income for any share under section 663(c) is computed as if each share constituted a separate trust or estate. Accordingly, each separate share shall calculate its distributable net income based upon its portion of gross income that is includible in distributable net income and its portion of any applicable deductions or losses.
(2) Section 643(b) income. This paragraph (b)(2) governs the allocation of the portion of gross income includible in distributable net income that is income within the meaning of section 643(b). Such gross income is allocated among the separate shares in accordance with the amount of income that each share is entitled to under the terms of the governing instrument or applicable local law.
(3) Income in respect of a decedent. This paragraph (b)(3) governs the allocation of the portion of gross income includible in distributable net income that is income in respect of a decedent within the meaning of section 691(a) and is not income within the meaning of section 643(b). Such gross income is allocated among the separate shares that could potentially be funded with these amounts irrespective of whether the share is entitled to receive any income under the terms of the governing instrument or applicable local law. The amount of such gross income allocated to each share is based on the relative value of each share that could potentially be funded with such amounts.
(4) Gross income not attributable to cash. This paragraph (b)(4) governs the allocation of the portion of gross income includible in distributable net income that is not attributable to cash received by the estate or trust (for example, original issue discount, a distributive share of partnership tax items, and the pro rata share of an S corporation’s tax items). Such gross income is allocated among the separate shares in the same proportion as section 643(b) income from the same source would be allocated under the terms of the governing instrument or applicable local law.
(5) Deductions and losses. Any deduction or any loss which is applicable solely to one separate share of the trust or estate is not available to any other share of the same trust or estate.
(c) Computations and valuations. For purposes of calculating distributable net income for each separate share, the fiduciary must use a reasonable and equitable method to make the allocations, calculations, and valuations required by paragraph (b) of this section.
(a) The applicability of the separate share rule provided by section 663(c) to trusts other than qualified revocable trusts within the meaning of section 645(b)(1) will generally depend upon whether distributions of the trust are to be made in substantially the same manner as if separate trusts had been created. Thus, if an instrument directs a trustee to divide the testator’s residuary estate into separate shares (which under applicable law do not constitute separate trusts) for each of the testator’s children and the trustee is given discretion, with respect to each share, to distribute or accumulate income or to distribute principal or accumulated income, or to do both, separate shares will exist under section 663(c). In determining whether separate shares exist, it is immaterial whether the principal and any accumulated income of each share is ultimately distributable to the beneficiary of such share, to his descendants, to his appointees under a general or special power of appointment, or to any other beneficiaries (including a charitable organization) designated to receive his share of the trust and accumulated income upon termination of the beneficiary’s interest in the share. Thus, a separate share may exist if the instrument provides that upon the death of the beneficiary of the share, the share will be added to the shares of the other beneficiaries of the trust.
(b) Separate share treatment will not be applied to a trust or portion of a trust subject to a power to: (1) Distribute, apportion, or accumulate income, or (2) distribute corpus to or for one or more beneficiaries within a group or class of beneficiaries, unless payment of income, accumulated income, or corpus of a share of one beneficiary cannot affect the proportionate share of income, accumulated income, or corpus of any shares of the other beneficiaries, or unless substantially proper adjustment must thereafter be made (under the governing instrument) so that substantially separate and independent shares exist.
(c) A share may be considered as separate even though more than one beneficiary has an interest in it. For example, two beneficiaries may have equal, disproportionate, or indeterminate interests in one share which is separate and independent from another share in which one or more beneficiaries have an interest. Likewise, the same person may be a beneficiary of more than one separate share.
(d) Separate share treatment may be given to a trust or portion of a trust otherwise qualifying under this section if the trust or portion of a trust is subject to a power to pay out to a beneficiary of a share (of such trust or portion) an amount of corpus in excess of his proportionate share of the corpus of the trust if the possibility of exercise of the power is remote. For example, if the trust is subject to a power to invade the entire corpus for the health, education, support, or maintenance of A, separate share treatment is applied if exercise of the power requires consideration of A’s other income which is so substantial as to make the possibility of exercise of the power remote. If instead it appears that A and B have separate shares in a trust, subject to a power to invade the entire corpus for the comfort, pleasure, desire, or happiness of A, separate share treatment shall not be applied.
(e) For taxable years ending before December 31, 1978, the separate share rule may also be applicable to successive interests in point of time, as for instance in the case of a trust providing for a life estate to A and a second life estate or outright remainder to B. In such a case, in the taxable year of a trust in which a beneficiary dies items of income and deduction properly allocable under trust accounting principles to the period before a beneficiary’s death are attributed to one share, and those allocable to the period after the beneficiary’s death are attributed to the other share. Separate share treatment is not available to a succeeding interest, however, with respect to distributions which would otherwise be deemed distributed in a taxable year of the earlier interest under the throwback provisions of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code. The application of this paragraph may be illustrated by the following example:
(a) General rule. The applicability of the separate share rule provided by section 663(c) to estates and qualified revocable trusts within the meaning of section 645(b)(1) will generally depend upon whether the governing instrument and applicable local law create separate economic interests in one beneficiary or class of beneficiaries of such estate or trust. Ordinarily, a separate share exists if the economic interests of the beneficiary or class of beneficiaries neither affect nor are affected by the economic interests accruing to another beneficiary or class of beneficiaries. Separate shares include, for example, the income on bequeathed property if the recipient of the specific bequest is entitled to such income and a surviving spouse’s elective share that under local law is entitled to income and appreciation or depreciation. Furthermore, a qualified revocable trust for which an election is made under section 645 is always a separate share of the estate and may itself contain two or more separate shares. Conversely, a gift or bequest of a specific sum of money or of property as defined in section 663(a)(1) is not a separate share.
(b) Special rule for certain types of beneficial interests. Notwithstanding the provisions of paragraph (a) of this section, a surviving spouse’s elective share that under local law is determined as of the date of the decedent’s death and is not entitled to income or any appreciation or depreciation is a separate share. Similarly, notwithstanding the provisions of paragraph (a) of this section, a pecuniary formula bequest that, under the terms of the governing instrument or applicable local law, is not entitled to income or to share in appreciation or depreciation constitutes a separate share if the governing instrument does not provide that it is to be paid or credited in more than three installments.
(c) Shares with multiple beneficiaries and beneficiaries of multiple shares. A share may be considered as separate even though more than one beneficiary has an interest in it. For example, two beneficiaries may have equal, disproportionate, or indeterminate interests in one share which is economically separate and independent from another share in which one or more beneficiaries have an interest. Moreover, the same person may be a beneficiary of more than one separate share.
§ 1.663(c)-5 Examples.
Section 663(c) may be illustrated by the following examples:
(ii) No distributions of income or corpus were made by the trustee prior to 1955, although A became 21 years of age on June 30, 1954. During the taxable year of 1955, the trust has income from royalties of $20,000 and expenses of $5,000. The trustee in his discretion distributes $12,000 to A. Both A and the trust report on the calendar year basis.
(iii) The trust qualifies for the separate share treatment under section 663(c) and the distributable net income must be divided into three parts for the purpose of determining the amount deductible by the trust under section 661 and the amount includible in A’s gross income under section 662.
(iv) The distributable net income of each share of the trust is $5,000 ($6,667 less $1,667). Since the amount ($12,000) distributed to A during 1955 exceeds the distributable net income of $5,000 allocated to his share, the trust is deemed to have distributed to him $5,000 of 1955 income and $7,000 of amounts other than 1955 income. Accordingly, the trust is allowed a deduction of $5,000 under section 661. The taxable income of the trust for 1955 is $9,900, computed as follows:
| Royalties | $20,000 | |
| Deductions: | ||
| Expenses | $5,000 | |
| Distribution to A | 5,000 | |
| Personal exemption | 100 | |
| 10,100 | ||
| Taxable income | 9,900 | |
(ii) Conclusion. The fractional formula bequests to the surviving spouse and to the children’s trust are separate shares. Because Testator’s will provides for fractional formula residuary bequests, the income and any appreciation in the value of the estate assets are proportionately allocated between the marital share and the trust’s share. Therefore, in determining the distributable net income of each share, the income and expenses must be allocated 60% to the marital share and 40% to the trust’s share. The distributable net income is $7,200 (60% of income less 60% of expenses) for the marital share and $4,800 (40% of income less 40% of expenses) for the trust’s share. Because the amount distributed in partial satisfaction of each bequest exceeds the distributable net income of each share, the estate’s distribution deduction under section 661 is limited to the sum of the distributable net income for both shares. The estate is allowed a distribution deduction of $12,000 ($7,200 for the marital share and $4,800 for the trust’s share). As a result, the estate has zero taxable income ($20,000 income less $8,000 expenses and $12,000 distribution deduction). Under section 662, the surviving spouse and the trust must include in gross income $7,200 and $4,800, respectively.
(ii) Conclusion. The estate has two separate shares consisting of a formula pecuniary bequest to the child’s trust and a residuary bequest to the surviving spouse. Because, under the terms of the will, no estate income is allocated to the bequest to the child’s trust, the distributable net income for that trust’s share is zero. Therefore, with respect to the $380,000 distribution to the child’s trust, the estate is allowed no deduction under section 661, and no amount is included in the trust’s gross income under section 662. Because no distributions were made to the spouse, there is no need to compute the distributable net income allocable to the marital share. The taxable income of the estate for the 2000 taxable year is $214,400 ($200,000 (dividend income) plus $30,000 (capital gain) minus $15,000 (expenses) and minus $600 (personal exemption)).
(ii) Conclusion. The estate has four separate shares consisting of the surviving spouse’s elective share and each of the three children’s residuary bequests. Because the surviving spouse is not entitled to any estate income under state law, none of the estate’s gross income is allocated to the spouse’s separate share for purposes of determining that share’s distributable net income. Therefore, with respect to the $5,000,000 distribution, the estate is allowed no deduction under section 661, and no amount is included in the spouse’s gross income under section 662. The $200,000 of interest paid to the spouse must be included in the spouse’s gross income under section 61. Because no distributions were made to any other beneficiaries during the year, there is no need to compute the distributable net income of the other three separate shares. Thus, the taxable income of the estate for the 2000 taxable year is $2,939,400 ($3,000,000 (dividend income) minus $60,000 (expenses) and $600 (personal exemption)). The estate’s $200,000 interest payment is a nondeductible personal interest expense described in section 163(h).
§ 1.663(c)-6 Effective dates.
Sections 1.663(c)-1 through 1.663(c)-5 are applicable for estates and qualified revocable trusts within the meaning of section 645(b)(1) with respect to decedents who die on or after December 28, 1999. However, for estates and qualified revocable trusts with respect to decedents who died after the date that section 1307 of the Tax Reform Act of 1997 became effective but before December 28, 1999, the IRS will accept any reasonable interpretation of the separate share provisions, including those provisions provided in 1999-11 I.R.B. 41 (see § 601.601(d)(2)(ii)(b) of this chapter). For trusts other than qualified revocable trusts, § 1.663(c)-2 is applicable for taxable years of such trusts beginning after December 28, 1999.
§ 1.664-1 Charitable remainder trusts.
(a) In general—(1) Introduction—(i) General description of a charitable remainder trust. Generally, a charitable remainder trust is a trust which provides for a specified distribution, at least annually, to one or more beneficiaries, at least one of which is not a charity, for life or for a term of years, with an irrevocable remainder interest to be held for the benefit of, or paid over to, charity. The specified distribution to be paid at least annually must be a sum certain which is not less than 5 percent of the initial net fair market value of all property placed in trust (in the case of a charitable remainder annuity trust) or a fixed percentage which is not less than 5 percent of the net fair market value of the trust assets, valued annually (in the case of a charitable remainder unitrust). A trust created after July 31, 1969, which is a charitable remainder trust, is exempt from all of the taxes imposed by subtitle A of the Code for any taxable year of the trust, except for a taxable year beginning before January 1, 2007, in which it has unrelated business taxable income. For taxable years beginning after December 31, 2006, an excise tax, treated as imposed by chapter 42, is imposed on charitable remainder trusts that have unrelated business taxable income. See paragraph (c) of this section.
(ii) Scope. This section provides definitions, general rules governing the creation and administration of a charitable remainder trust, and rules governing the taxation of the trust and its beneficiaries. For the application of certain foundation rules to charitable remainder trusts, see paragraph (b) of this section. If the trust has unrelated business taxable income, see paragraph (c) of this section. For the treatment of distributions to recipients, see paragraph (d) of this section. For the treatment of distributions to charity, see paragraph (e) of this section. For the time limitations for amendment of governing instruments, see paragraph (f) of this section. For transitional rules under which particular requirements are inapplicable to certain trusts, see paragraph (g) of this section. Section 1.664-2 provides rules relating solely to a charitable remainder annuity trust. Section 1.664-3 provides rules relating solely to a charitable remainder unitrust. Section 1.664-4 provides rules governing the calculation of the fair market value of the remainder interest in a charitable remainder unitrust. For rules relating to the filing of returns for a charitable remainder trust, see paragraph (a)(6) of § 1.6012-3 and section 6034 and the regulations thereunder.
(iii) Definitions. As used in this section and §§ 1.664-2, 1.664-3, and 1.664-4:
(a) Charitable remainder trust. The term charitable remainder trust means a trust with respect to which a deduction is allowable under section 170, 2055, 2106, or 2522 and which meets the description of a charitable remainder annuity trust (as described in § 1.664-2) or a charitable remainder unitrust (as described in § 1.664-3).
(b) Annuity amount. The term annuity amount means the amount described in paragraph (a)(1) of § 1.664-2 which is payable, at least annually, to the beneficiary of a charitable remainder annuity trust.
(c) Unitrust amount. The term unitrust amount means the amount described in paragraph (a)(1) of § 1.664-3 which is payable, at least annually, to the beneficiary of a charitable remainder unitrust.
(d) Recipient. The term recipient means the beneficiary who receives the possession or beneficial enjoyment of the annuity amount or unitrust amount.
(e) Governing instrument. The term governing instrument has the same meaning as in section 508(e) and the regulations thereunder.
(2) Requirement that the trust must be either a charitable remainder annuity trust or a charitable remainder unitrust. A trust is a charitable remainder trust only if it is either a charitable remainder annuity trust in every respect or a charitable remainder unitrust in every respect. For example, a trust which provides for the payment each year to a noncharitable beneficiary of the greater of a sum certain or a fixed percentage of the annual value of the trust assets is not a charitable remainder trust inasmuch as the trust is neither a charitable remainder annuity trust (for the reason that the payment for the year may be a fixed percentage of the annual value of the trust assets which is not a “sum certain”) nor a charitable remainder unitrust (for the reason that the payment for the year may be a sum certain which is not a “fixed percentage” of the annual value of the trust assets).
(3) Restrictions on investments. A trust is not a charitable remainder trust if the provisions of the trust include a provision which restricts the trustee from investing the trust assets in a manner which could result in the annual realization of a reasonable amount of income or gain from the sale or disposition of trust assets. In the case of transactions with, or for the benefit of, a disqualified person, see section 4941(d) and the regulations thereunder for rules relating to the definition of self-dealing.
(4) Requirement that trust must meet definition of and function exclusively as a charitable remainder trust from its creation. In order for a trust to be a charitable remainder trust, it must meet the definition of and function exclusively as a charitable remainder trust from the creation of the trust. Solely for the purposes of section 664 and the regulations thereunder, the trust will be deemed to be created at the earliest time that neither the grantor nor any other person is treated as the owner of the entire trust under subpart E, part 1, subchapter J, chapter 1, subtitle A of the Code (relating to grantors and others treated as substantial owners), but in no event prior to the time property is first transferred to the trust. For purposes of the preceding sentence, neither the grantor nor his spouse shall be treated as the owner of the trust under such subpart E merely because the grantor or his spouse is named as a recipient. See examples 1 through 3 of subparagraph (6) of this paragraph for illustrations of the foregoing rule.
(5) Rules applicable to testamentary transfers—(i) Deferral of annuity or unitrust amount. Notwithstanding subparagraph (4) of this paragraph and §§ 1.664-2 and 1.664-3, for purposes of sections 2055 and 2106 a charitable remainder trust shall be deemed created at the date of death of the decedent (even though the trust is not funded until the end of a reasonable period of administration or settlement) if the obligation to pay the annuity or unitrust amount with respect to the property passing in trust at the death of the decedent begins as of the date of death of the decedent, even though the requirement to pay such amount is deferred in accordance with the rules provided in this subparagraph. If permitted by applicable local law or authorized by the provisions of the governing instrument, the requirement to pay such amount may be deferred until the end of the taxable year of the trust in which occurs the complete funding of the trust. Within a reasonable period after such time, the trust must pay (in the case of an underpayment) or must receive from the recipient (in the case of an overpayment) the difference between:
(a) Any annuity or unitrust amounts actually paid, plus interest on such amounts computed at the rate of interest specified in paragraph (a)(5)(iv) of this section, compounded annually, and
(b) The annuity or unitrust amounts payable, plus interest on such amounts computed at the rate of interest specified in paragraph (a)(5)(iv) of this section, compounded annually.
(ii) For purposes of retroactively determining the amount under subdivision (i)(b) of this subparagraph, the governing instrument of a charitable remainder unitrust may provide that the amount described in subdivision (i)(b) of this subparagraph with respect to property passing in trust at the death of the decedent for the period which begins on the date of death of the decedent and ends on the earlier of the date of death of the last recipient or the end of the taxable year of the trust in which occurs the complete funding of the trust shall be computed by multiplying:
(a) The sum of (1) the value, on the earlier of the date of death of the last recipient or the last day in such taxable year, of the property held in trust which is attributable to property passing to the trust at the death of the decedent, (2) any distributions in respect of unitrust amounts made by the trust or estate before such date, and (3) interest on such distributions computed at the rate of interest specified in paragraph (a)(5)(iv) of this section, compounded annually, from the date of distribution to such date by:
(b)(1) In the case of transfers made after November 30, 1983, for which the valuation date is before May 1, 1989, a factor equal to 1.000000 less the factor under the appropriate adjusted payout rate in Table D in § 1.664-4(e)(6) opposite the number of years in column 1 between the date of death of the decedent and the date of the earlier of the death of the last recipient or the last day of such taxable year.
(2) In the case of transfers for which the valuation date is after April 30, 1989, a factor equal to 1.000000 less the factor under the appropriate adjusted payout rate in Table D in § 1.664-4(e)(6) opposite the number of years in column 1 between the date of death of the decedent and the date of the earlier of the death of the last recipient or the last day of such taxable year. The appropriate adjusted payout rate is determined by using the appropriate Table F contained in § 1.664-4(e)(6) for the section 7520 rate for the month of the valuation date.
(3) If the number of years between the date of death and the date of the earlier of the death of the last recipient or the last day of such taxable year is between periods for which factors are provided, a linear interpolation must be made.
(iii) Treatment of distributions. The treatment of a distribution to a charitable remainder trust, or to a recipient in respect of an annuity or unitrust amount, paid, credited, or required to be distributed by an estate, or by a trust which is not a charitable remainder trust, shall be governed by the rules of subchapter J, chapter 1, subtitle A of the Code other than section 664. In the case of a charitable remainder trust which is partially or fully funded during the period of administration of an estate or settlement of a trust (which is not a charitable remainder trust), the treatment of any amount paid, credited, or required to be distributed by the charitable remainder trust shall be governed by the rules of section 664.
(iv) Rate of interest. The following rates of interest shall apply for purposes of paragraphs (a)(5) (i) through (ii) of this section:
(a) The section 7520 rate for the month in which the valuation date with respect to the transfer is (or one of the prior two months if elected under § 1.7520-2(b)) after April 30, 1989;
(b) 10 percent for instruments executed or amended (other than in the case of a reformation under section 2055(e)(3)) on or after August 9, 1984, and before May 1, 1989, and not subsequently amended;
(c) 6 percent or 10 percent for instruments executed or amended (other than in the case of a reformation under section 2055(e)(3)) after October 24, 1983, and before August 9, 1984; and
(d) 6 percent for instruments executed before October 25, 1983, and not subsequently amended (other than in the case of a reformation under section 2055(e)(3)).
(6) Examples. The application of the rules in paragraphs (a)(4) and (a)(5) of this section require the use of actuarial factors contained in §§ 1.664-4(e) and 1.664-4A and may be illustrated by use of the following examples:
(ii) Trust B will be charitable remainder trust from the date of its funding because it will function exclusively as a charitable remainder trust from its creation. For purposes of section 2055, Trust B will be deemed created at H’s death if the obligation to pay the annuity amount begins on the date of H’s death. For purposes of section 664, Trust B becomes a charitable remainder trust as soon as it is partially or completely funded. Consequently, unless Trust B has unrelated business taxable income, the income of the trust is exempt from all taxes imposed by subtitle A of the Code, and any distributions by the trust, even before it is completely funded, are governed by the rules of section 664. Any distributions made by Trust A, including distributions to a recipient in respect of annuity amounts, are governed by the rules of subchapter J, chapter 1, subtitle A of the Code other than section 664.
For purposes of section 664, the trust becomes a charitable remainder trust as soon as it is partially or completely funded. Consequently, unless the trust has unrelated business taxable income, the income of the trust is exempt from all taxes imposed by subtitle A of the Code, and any distributions by the trust, even before it is completely funded, are governed by the rules of section 664. Any distributions made by H’s estate, including distributions to a recipient in respect of unitrust amounts, are governed by the rules of subchapter J, chapter 1, subtitle A of the Code other than section 664.
(ii) Because no amounts were paid prior to the end of the taxable year in which the trust was completely funded, the amount payable at the end of such taxable year is equal to the net fair market value of the trust assets on the last day of such taxable year (June 30, 1977) multiplied by a factor equal to 1.0 minus the factor in Table D corresponding to the number of years in the period between the date of death and the end of such taxable year. The adjusted payout rate (determined under § 1.664-4A(c)) is 5 percent. Because the last day of the taxable year in which the trust is completely funded in June 30, 1977, there are 3 181/365 years in such period. Because there is no factor given in Table D for such a period, a linear interpolation must be made:
| 1.0 minus 0.814506 (factor at 5 percent for 4 years) | 0.185494 |
| 1.0 minus 0.857375 (factor at 5 percent for 3 years) | .142625 |
| Difference | .042869 |
| 181 ÷ 365= | |
| 1.0 minus 0.857375 (factor at 5 percent for 3 years | 0.142625 |
| Plus: X | .021258 |
| Interpolated factor | .163883 |
(7) Valuation of unmarketable assets—(i) In general. If unmarketable assets are transferred to or held by a trust, the trust will not be a trust with respect to which a deduction is available under section 170, 2055, 2106, or 2522, or will be treated as failing to function exclusively as a charitable remainder trust unless, whenever the trust is required to value such assets, the valuation is—
(a) Performed exclusively by an independent trustee; or
(b) Determined by a current qualified appraisal from a qualified appraiser, as those terms are defined in—
(1) Section 1.170A-13(c)(3) and 1.170A-13(c)(5), respectively, for appraisals prepared for returns or submissions filed on or before August 17, 2006;
(2) Section 3 of Notice 2006-96, 2006-2 CB 902, for appraisals prepared for returns or submissions filed after August 17, 2006, if the donations are made before January 1, 2019; or
(3) Section 1.170A-17(a) and 1.170A-17(b), respectively, for appraisals prepared for returns or submissions for donations made on or after January 1, 2019.
(ii) Unmarketable assets. Unmarketable assets are assets that are not cash, cash equivalents, or other assets that can be readily sold or exchanged for cash or cash equivalents. For example, unmarketable assets include real property, closely-held stock, and an unregistered security for which there is no available exemption permitting public sale.
(iii) Independent trustee. An independent trustee is a person who is not the grantor of the trust, a noncharitable beneficiary, or a related or subordinate party to the grantor, the grantor’s spouse, or a noncharitable beneficiary (within the meaning of section 672(c) and the applicable regulations).
(b) Application of certain foundation rules to charitable remainder trusts. See section 4947(a)(2) and section 4947(b)(3)(B) and the regulations thereunder for the application to charitable remainder trusts of certain provisions relating to private foundations. See section 508(e) for rules relating to required provisions in governing instruments prohibiting certain activities specified in section 4947(a)(2).
(c) Excise tax on charitable remainder trusts—(1) In general. For each taxable year beginning after December 31, 2006, in which a charitable remainder annuity trust or a charitable remainder unitrust has any unrelated business taxable income, an excise tax is imposed on that trust in an amount equal to the amount of such unrelated business taxable income. For this purpose, unrelated business taxable income is as defined in section 512, determined as if part III, subchapter F, chapter 1, subtitle A of the Internal Revenue Code applied to such trust. Such excise tax is treated as imposed by chapter 42 (other than subchapter E) and is reported and payable in accordance with the appropriate forms and instructions. Such excise tax shall be allocated to corpus and, therefore, is not deductible in determining taxable income distributed to a beneficiary. (See paragraph (d)(2) of this section.) The charitable remainder trust income that is unrelated business taxable income constitutes income of the trust for purposes of determining the character of the distribution made to the beneficiary. Income of the charitable remainder trust is allocated among the charitable remainder trust income categories in paragraph (d)(1) of this section without regard to whether any part of that income constitutes unrelated business taxable income under section 512.
(2) Examples. The application of the rules in this paragraph (c) may be illustrated by the following examples:
(3) Effective/applicability date. This paragraph (c) is applicable for taxable years beginning after December 31, 2006. The rules that apply with respect to taxable years beginning before January 1, 2007, are contained in § 1.664-1(c) as in effect prior to June 24, 2008. (See 26 CFR part 1, § 1.664-1(c)(1) revised as of April 1, 2007.)
(d) Treatment of annual distributions to recipients—(1) Character of distributions—(i) Assignment of income to categories and classes at the trust level. (a) A trust’s income, including income includible in gross income and other income, is assigned to one of three categories in the year in which it is required to be taken into account by the trust. These categories are—
(1) Gross income, other than gains and amounts treated as gains from the sale or other disposition of capital assets (referred to as the ordinary income category);
(2) Gains and amounts treated as gains from the sale or other disposition of capital assets (referred to as the capital gains category); and
(3) Other income (including income excluded under part III, subchapter B, chapter 1, subtitle A of the Internal Revenue Code).
(b) Items within the ordinary income and capital gains categories are assigned to different classes based on the Federal income tax rate applicable to each type of income in that category in the year the items are required to be taken into account by the trust. For example, for a trust with a taxable year ending December 31, 2004, the ordinary income category may include a class of qualified dividend income as defined in section 1(h)(11) and a class of all other ordinary income, and the capital gains category may include separate classes for short-term and long-term capital gains and losses, such as a short-term capital gain class, a 28-percent long-term capital gain class (gains and losses from collectibles and section 1202 gains), an unrecaptured section 1250 long-term capital gain class (long-term gains not treated as ordinary income that would be treated as ordinary income if section 1250(b)(1) included all depreciation), a qualified 5-year long-term capital gain class as defined in section 1(h)(9) prior to amendment by the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA), Public Law 108-27 (117 Stat. 752), and an all other long-term capital gain class. After items are assigned to a class, the tax rates may change so that items in two or more classes would be taxed at the same rate if distributed to the recipient during a particular year. If the changes to the tax rates are permanent, the undistributed items in those classes are combined into one class. If, however, the changes to the tax rates are only temporary (for example, the new rate for one class will sunset in a future year), the classes are kept separate.
(ii) Order of distributions. (a) The categories and classes of income (determined under paragraph (d)(1)(i) of this section) are used to determine the character of an annuity or unitrust distribution from the trust in the hands of the recipient irrespective of whether the trust is exempt from taxation under section 664(c) for the year of the distribution. The determination of the character of amounts distributed or deemed distributed at any time during the taxable year of the trust shall be made as of the end of that taxable year. The tax rate or rates to be used in computing the recipient’s tax on the distribution shall be the tax rates that are applicable, in the year in which the distribution is required to be made, to the classes of income deemed to make up that distribution, and not the tax rates that are applicable to those classes of income in the year the income is received by the trust. The character of the distribution in the hands of the annuity or unitrust recipient is determined by treating the distribution as being made from each category in the following order:
(1) First, from ordinary income to the extent of the sum of the trust’s ordinary income for the taxable year and its undistributed ordinary income for prior years.
(2) Second, from capital gain to the extent of the trust’s capital gains determined under paragraph (d)(1)(iv) of this section.
(3) Third, from other income to the extent of the sum of the trust’s other income for the taxable year and its undistributed other income for prior years.
(4) Finally, from trust corpus (with corpus defined for this purpose as the net fair market value of the trust assets less the total undistributed income (but not loss) in paragraphs (d)(1)(i)(a) (1) through (3) of this section).
(b) If the trust has different classes of income in the ordinary income category, the distribution from that category is treated as being made from each class, in turn, until exhaustion of the class, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest Federal income tax rate. If the trust has different classes of net gain in the capital gains category, the distribution from that category is treated as being made first from the short-term capital gain class and then from each class of long-term capital gain, in turn, until exhaustion of the class, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate. If two or more classes within the same category are subject to the same current tax rate, but at least one of those classes will be subject to a different tax rate in a future year (for example, if the current rate sunsets), the order of that class in relation to other classes in the category with the same current tax rate is determined based on the future rate or rates applicable to those classes. Within each category, if there is more than one type of income in a class, amounts treated as distributed from that class are to be treated as consisting of the same proportion of each type of income as the total of the current and undistributed income of that type bears to the total of the current and undistributed income of all types of income included in that class. For example, if rental income and interest income are subject to the same current and future Federal income tax rate and, therefore, are in the same class, a distribution from that class will be treated as consisting of a proportional amount of rental income and interest income.
(iii) Treatment of losses at the trust level—(a) Ordinary income category. A net ordinary loss for the current year is first used to reduce undistributed ordinary income for prior years that is assigned to the same class as the loss. Any excess loss is then used to reduce the current and undistributed ordinary income from other classes, in turn, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest Federal income tax rate. If any of the loss exists after all the current and undistributed ordinary income from all classes has been offset, the excess is carried forward indefinitely to reduce ordinary income for future years and retains its class assignment. For purposes of this section, the amount of current income and prior years’ undistributed income shall be computed without regard to the deduction for net operating losses provided by section 172 or 642(d).
(b) Other income category. A net loss in the other income category for the current year is used to reduce undistributed income in this category for prior years and any excess is carried forward indefinitely to reduce other income for future years.
(iv) Netting of capital gains and losses at the trust level. Capital gains of the trust are determined on a cumulative net basis under the rules of this paragraph (d)(1) without regard to the provisions of section 1212. For each taxable year, current and undistributed gains and losses within each class are netted to determine the net gain or loss for that class, and the classes of capital gains and losses are then netted against each other in the following order. First, a net loss from a class of long-term capital gain and loss (beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate) is used to offset net gain from each other class of long-term capital gain and loss, in turn, until exhaustion of the class, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate. Second, either—
(a) A net loss from all the classes of long-term capital gain and loss (beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate) is used to offset any net gain from the class of short-term capital gain and loss; or
(b) A net loss from the class of short-term capital gain and loss is used to offset any net gain from each class of long-term capital gain and loss, in turn, until exhaustion of the class, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest Federal income tax rate.
(v) Carry forward of net capital gain or loss by the trust. If, at the end of a taxable year, a trust has, after the application of paragraph (d)(1)(iv) of this section, any net loss or any net gain that is not treated as distributed under paragraph (d)(1)(ii)(a)(2) of this section, the net gain or loss is carried over to succeeding taxable years and retains its character in succeeding taxable years as gain or loss from its particular class.
(vi) Special transitional rules. To be eligible to be included in the class of qualified dividend income, dividends must meet the definition of section 1(h)(11) and must be received by the trust after December 31, 2002. Long-term capital gain or loss properly taken into account by the trust before January 1, 1997, is included in the class of all other long-term capital gains and losses. Long-term capital gain or loss properly taken into account by the trust on or after January 1, 1997, and before May 7, 1997, if not treated as distributed in 1997, is included in the class of all other long-term capital gains and losses. Long-term capital gain or loss (other than 28-percent gain (gains and losses from collectibles and section 1202 gains), unrecaptured section 1250 gain (long-term gains not treated as ordinary income that would be treated as ordinary income if section 1250(b)(1) included all depreciation), and qualified 5-year gain as defined in section 1(h)(9) prior to amendment by JGTRRA), properly taken into account by the trust before January 1, 2003, and distributed during 2003 is treated as if it were properly taken into account by the trust after May 5, 2003. Long-term capital gain or loss (other than 28-percent gain, unrecaptured section 1250 gain, and qualified 5-year gain), properly taken into account by the trust on or after January 1, 2003, and before May 6, 2003, if not treated as distributed during 2003, is included in the class of all other long-term capital gain. Qualified 5-year gain properly taken into account by the trust after December 31, 2000, and before May 6, 2003, if not treated as distributed by the trust in 2003 or a prior year, must be maintained in a separate class within the capital gains category until distributed. Qualified 5-year gain properly taken into account by the trust before January 1, 2003, and deemed distributed during 2003 is subject to the same current tax rate as deemed distributions from the class of all other long-term capital gain realized by the trust after May 5, 2003. Qualified 5-year gain properly taken into account by the trust on or after January 1, 2003, and before May 6, 2003, if treated as distributed by the trust in 2003, is subject to the tax rate in effect prior to the amendment of section 1(h)(9) by JGTRRA.
(vii) Application of section 643(a)(7). For application of the anti-abuse rule of section 643(a)(7) to distributions from charitable remainder trusts, see § 1.643(a)-8.
(viii) Examples. The following examples illustrate the rules in this paragraph (d)(1):
| Interest income | $80 |
| Qualified dividend income | 50 |
| Capital gains and losses | 0 |
| Tax-exempt income | 0 |
| Interest income | $80 |
| Qualified dividend income | 20 |
| Interest income class | $5 |
| Qualified dividend income class ($10 from 2004 and $30 carried forward from 2003) | 40 |
| Net short-term capital gain class | 15 |
| Net long-term capital loss in 28-percent class | (325) |
| Net long-term capital gain in unrecaptured section 1250 gain class | 175 |
| Net long-term capital gain in all other long-term capital gain class | 350 |
| Interest income | $ 5 |
| Qualified dividend income | 40 |
| Net short-term capital gain | 15 |
| Net long-term capital gain in all other long-term capital gain class | 40 |
| Interest income class | $ 5 |
| Qualified dividend income | 20 |
| Net loss in short-term capital gain class | (50) |
| Net long-term capital gain in 28-percent gain class | 10 |
| Net long-term capital gain in unrecaptured section 1250 gain class | 135 |
| Net long-term capital gain in all other long-term capital gain class (carried forward from 2004) | 160 |
| Interest income | $ 5 |
| Qualified dividend income | 20 |
| Unrecaptured section 1250 gain | 75 |
| Interest income class | $ 95 |
| Qualified dividend income class | 10 |
| Net loss in short-term capital gain class | (20) |
| Net long-term capital loss in 28-percent gain class | (350) |
| Net long-term capital gain in unrecaptured section 1250 gain class (carried forward from 2005) | 20 |
| Net long-term capital gain in all other long-term capital gain class (carried forward from 2005) | 160 |
| Interest income | $ 95 |
| Qualified dividend income | 5 |
| Interest income class | $ 10 |
| Net gain in short-term capital gain class | 5 |
| Net long-term capital gain in 28-percent gain class | 5 |
| Net long-term capital gain in unrecaptured section 1250 gain class | 10 |
| Net long-term capital gain in all other long-term capital gain class | 10 |
| Interest income | $10 |
| Short-term capital gain | 5 |
| 28-percent gain | 5 |
| Unrecaptured section 1250 gain | 10 |
| All other long-term capital gain | 10 |
| Qualified 5-year gain (taxed as all other long-term capital gain) | 60 |
(ix) Effective dates. The rules in this paragraph (d)(1) that require long-term capital gains to be distributed in the following order: first, 28-percent gain (gains and losses from collectibles and section 1202 gains); second, unrecaptured section 1250 gain (long-term gains not treated as ordinary income that would be treated as ordinary income if section 1250(b)(1) included all depreciation); and then, all other long-term capital gains are applicable for taxable years ending on or after December 31, 1998. The rules in this paragraph (d)(1) that provide for the netting of capital gains and losses are applicable for taxable years ending on or after December 31, 1998. The rule in the second sentence of paragraph (d)(1)(vi) of this section is applicable for taxable years ending on or after December 31, 1998. The rule in the third sentence of paragraph (d)(1)(vi) of this section is applicable for distributions made in taxable years ending on or after December 31, 1998. All other provisions of this paragraph (d)(1) are applicable for taxable years ending after November 20, 2003.
(2) Allocation of deductions. Items of deduction of the trust for a taxable year of the trust which are deductible in determining taxable income (other than the deductions permitted by sections 642(b), 642(c), 661, and 1202) which are directly attributable to one or more classes of items within a category of income (determined under paragraph (d)(1)(i)(a) of this section) or to corpus shall be allocated to such classes of items or to corpus. All other allowable deductions for such taxable year which are not directly attributable to one or more classes of items within a category of income or to corpus (other than the deductions permitted by sections 642(b), 642(c), 661, and 1202) shall be allocated among the classes of items within the category (excluding classes of items with net losses) on the basis of the gross income of such classes for such taxable year reduced by the deductions allocated thereto under the first sentence of this subparagraph, but in no event shall the amount of expenses allocated to any class of items exceed such income of such class for the taxable year. Items of deduction which are not allocable under the above two sentences (other than the deductions permitted by sections 642(b), 642(c), 661, and 1202) may be allocated in any manner. All taxes imposed by chapter 42 of the Code (including without limitation taxes treated under section 664(c)(2) as imposed by chapter 42) and, for taxable years beginning prior to January 1, 2007, all taxes imposed by subtitle A of the Code for which the trust is liable because it has unrelated business taxable income, shall be allocated to corpus. Any expense which is not deductible in determining taxable income and which is not allocable to any class of items described in paragraph (d)(1)(i)(a)(3) of this section shall be allocated to corpus. The deductions allowable to a trust under sections 642(b), 642(c), 661, and 1202 are not allowed in determining the amount or character of any class of items within a category of income described in paragraph (d)(1)(i)(a) of this section or to corpus.
(3) Allocation of income among recipients. If there are two or more recipients, each will be treated as receiving his pro rata portion of the categories of income and corpus. The application of this rule may be illustrated by the following example:
(4) Year of inclusion—(i) General rule. To the extent required by this paragraph, the annuity or unitrust amount is includible in the recipient’s gross income for the taxable year in which the annuity or unitrust amount is required to be distributed even though the annuity or unitrust amount is not distributed until after the close of the taxable year of the trust. If a recipient has a different taxable year (as defined in section 441 or 442) from the taxable year of the trust, the amount he is required to include in gross income to the extent required by this paragraph shall be included in his taxable year in which or with which ends the taxable year of the trust in which such amount is required to be distributed.
(ii) Payments resulting from incorrect valuations. Notwithstanding subdivision (i) of this subparagraph, any payments which are made or required to be distributed by a charitable remainder trust pursuant to paragraph (a)(5) of this section, under paragraph (f)(3) of this section because of an amendment to the governing instrument, or under paragraphs (a)(1) of §§ 1.664-2 and 1.664-3 because of an incorrect valuation, shall, to the extent required by this paragraph, be included in the gross income of the recipient in his taxable year in which or with which ends the taxable year of the trust in which the amount is paid, credited, or required to be distributed. For rules relating to required adjustments of underpayments and overpayments of the annuity or unitrust amounts in respect of payments made prior to the amendment of a governing instrument, see paragraph (f)(3) of this section. There is allowable to a recipient a deduction from gross income for any amounts repaid to the trust because of an overpayment during the reasonable period of administration or settlement or until the trust is fully funded, because of an amendment, or because of an incorrect valuation, to the extent such amounts were included in his gross income. See section 1341 and the regulations thereunder for rules relating to the computation of tax where a taxpayer restores substantial amounts held under a claim of right.
(iii) Rules applicable to year of recipient’s death. If the taxable year of the trust does not end with or within the last taxable year of the recipient because of the recipient’s death, the extent to which the annuity or unitrust amount required to be distributed to him is included in the gross income of the recipient for his last taxable year, or in the gross income of his estate, is determined by making the computations required under this paragraph for the taxable year of the trust in which his last taxable year ends. (The last sentence of subdivision (i) of this subparagraph does not apply to such amounts.) The gross income for the last taxable year of a recipient on the cash basis includes (to the extent required by this paragraph) amounts actually distributed to the recipient before his death. Amounts required to be distributed which are distributed to his estate, are included (to the extent required by this paragraph) in the gross income of the estate as income in respect of a decedent under section 691.
(5) Distributions in kind. The annuity or unitrust amount may be paid in cash or in other property. In the case of a distribution made in other property, the amount paid, credited, or required to be distributed shall be considered as an amount realized by the trust from the sale or other disposition of property. The basis of the property in the hands of the recipient is its fair market value at the time it was paid, credited, or required to be distributed. The application of these rules may be illustrated by the following example:
(e) Other distributions—(1) Character of distributions. An amount distributed by the trust to an organization described in section 170(c) other than the annuity or unitrust amount shall be considered as a distribution of corpus and of those categories of income specified in paragraph (d)(1)(i)(a) of this section in an order inverse to that prescribed in such paragraph. The character of such amount shall be determined as of the end of the taxable year of the trust in which the distribution is made after the character of the annuity or unitrust amount has been determined.
(2) Distributions in kind. In the case of a distribution of an amount to which subparagraph (1) of this paragraph applies, no gain or loss is realized by the trust by reason of a distribution in kind unless such distribution is in satisfaction of a right to receive a distribution of a specific dollar amount or in specific property other than that distributed.
(f) Effective date—(1) General rule. The provisions of this section are effective with respect to transfers in trust made after July 31, 1969. Any trust created (within the meaning of applicable local law) prior to August 1, 1969, is not a charitable remainder trust even if it otherwise satisfies the definition of a charitable remainder trust. The provisions of paragraph § 1.664-1(a)(7)(i)(b) apply as provided in that paragraph.
(2) Transfers to pre-1970 trusts. Property transferred to a trust created (within the meaning of applicable local law) before August 1, 1969, whose governing instrument provides that an organization described in section 170(c) receives an irrevocable remainder interest in such trust, shall, for purposes of subparagraphs (1) and (3) of this paragraph, be deemed transferred to a trust created on the date of such transfer provided that the transfer occurs after July 31, 1969, and prior to October 18, 1971, and the transferred property and any undistributed income therefrom is severed and placed in a separate trust before December 31, 1972, or if later, on or before the 30th day after the date on which any judicial proceedings begun before December 31, 1972, which are required to sever such property, become final.
(3) Amendment of post-1969 trusts. A trust created (within the meaning of applicable local law) subsequent to July 31, 1969, and prior to December 31, 1972, which is not a charitable remainder trust at the date of its creation, may be treated as a charitable remainder trust from the date it would be deemed created under § 1.664-1(a) (4) and (5)(i) for all purposes: Provided, That all the following requirements are met:
(i) At the time of the creation of the trust, the governing instrument provides that an organization described in section 170(c) receives an irrevocable remainder interest in such trust.
(ii) The governing instrument of the trust is amended so that the trust will meet the definition of a charitable remainder trust and, if applicable, will meet the requirement of paragraph (a)(5)(i) of this section that obligation to make payment of the annuity or unitrust amount with respect to property passing at death begin as of the date of death, before December 31, 1972, or if later, on or before the 30th day after the date on which any judicial proceedings which are begun before December 31, 1972, and which are required to amend its governing instrument, become final. In the case of a trust created (within the meaning of applicable local law) subsequent to July 31, 1969, and prior to December 31, 1972, the provisions of section 508(d)(2)(A) shall not apply if the governing instrument of the trust is amended so as to comply with the requirements of section 508(e) before December 31, 1972, or if later, on or before the 30th day after the date on which any judicial proceedings which are begun before December 31, 1972, and which are required to amend its governing instrument, become final. Notwithstanding the provisions of paragraphs (a)(3) and (a)(4) of §§ 1.664-2 and 1.664-3, the governing instrument may grant to the trustee a power to amend the governing instrument for the sole purpose of complying with the requirements of this section and § 1.664-2 or § 1.664-3: Provided, That at the creation of the trust, the governing instrument (a) provides for the payment of a unitrust amount described in § 1.664-3(a)(1)(i) or an annuity which meets the requirements of paragraph (a)(2) of § 1.664-2 or § 1.664-3, (b) designates the recipients of the trust and the period for which the amount described in (a) of this subdivision (ii) is to be paid, and (c) provides that an organization described in section 170(c) receives an irrevocable remainder interest in such trust. The mere granting of such a power is not sufficient to meet the requirements of this subparagraph that the governing instrument be amended in the manner and within the time limitations of this subparagraph.
(iii)(a) Where the amount of the distributions which would have been made by the trust to a recipient if the amended provisions of such trust had been in effect from the time of creation of such trust exceeds the amount of the distributions made by the trust prior to its amendment, the trust pays an amount equal to such excess to the recipient.
(b) Where the amount of distributions made to the recipient prior to the amendment of the trust exceeds the amount of the distributions which would have been made by such trust if the amended provisions of such trust had been in effect from the time of creation of such trust, such excess is repaid to the trust by the recipient.
(4) Valuation of unmarketable assets. The rules contained in paragraph (a)(7) of this section are applicable for trusts created on or after December 10, 1998. A trust in existence as of December 10, 1998, whose governing instrument requires that an independent trustee value the trust’s unmarketable assets may be amended or reformed to permit a valuation method that satisfies the requirements of paragraph (a)(7) of this section for taxable years beginning on or after December 10, 1998.
(g) Transitional effective date. Notwithstanding any other provision of this section, § 1.664-2 or § 1.664-3, the requirement of paragraph (a)(5)(i) of this section that interest accrue on overpayments and underpayments, the requirement of paragraph (a)(5)(ii) of this section that the unitrust amount accruing under the formula provided therein cease with the death of the last recipient, and the requirement that the governing instrument of the trust contain the provisions specified in paragraph (a)(1)(iv) of § 1.664-2 (relating to computation of the annuity amount in certain circumstances), paragraph (a)(1)(v) of § 1.664-3 (relating to computation of the unitrust amount in certain circumstances), paragraphs (b) of §§ 1.664-2 and 1.664-3 (relating to additional contributions), and paragraph (a)(1)(iii) of § 1.664-3 (relating to incorrect valuations), paragraphs (a)(6)(iv) of §§ 1.664-2 and 1.664-3 (relating to alternative remaindermen) shall not apply to:
(1) A will executed on or before December 31, 1972, if:
(i) The testator dies before December 31, 1975, without having republished the will after December 31, 1972, by codicil or otherwise.
(ii) The testator at no time after December 31, 1972, had the right to change the provisions of the will which pertain to the trust, or
(iii) The will is not republished by codicil or otherwise before December 31, 1975, and the testator is on such date and at all times thereafter under a mental disability to republish the will by codicil or otherwise, or
(2) A trust executed on or before December 31, 1972, if:
(i) The grantor dies before December 31, 1975, without having amended the trust after December 31, 1972,
(ii) The trust is irrevocable on December 31, 1972, or
(iii) The trust is not amended before December 31, 1975, and the grantor is on such date and at all times thereafter under a mental disability to change the terms of the trust.
§ 1.664-2 Charitable remainder annuity trust.
(a) Description. A charitable remainder annuity trust is a trust which complies with the applicable provisions of § 1.664-1 and meets all of the following requirements:
(1) Required payment of annuity amount—(i) Payment of sum certain at least annually. The governing instrument provides that the trust will pay a sum certain not less often than annually to a person or persons described in paragraph (a)(3) of this section for each taxable year of the period specified in paragraph (a)(5) of this section.
(a) General rule applicable to all trusts. A trust will not be deemed to have engaged in an act of self-dealing (within the meaning of section 4941), to have unrelated debt-financed income (within the meaning of section 514), to have received an additional contribution (within the meaning of paragraph (b) of this section), or to have failed to function exclusively as a charitable remainder trust (within the meaning of § 1.664-1(a)(4)) merely because the annuity amount is paid after the close of the taxable year if such payment is made within a reasonable time after the close of such taxable year and the entire annuity amount in the hands of the recipient is characterized only as income from the categories described in section 664(b)(1), (2), or (3), except to the extent it is characterized as corpus described in section 664(b)(4) because—
(1) The trust pays the annuity amount by distributing property (other than cash) that it owned at the close of the taxable year to pay the annuity amount, and the trustee elects to treat any income generated by the distribution as occurring on the last day of the taxable year in which the annuity amount is due;
(2) The trust pays the annuity amount by distributing cash that was contributed to the trust (with respect to which a deduction was allowable under section 170, 2055, 2106, or 2522); or
(3) The trust pays the annuity amount by distributing cash received as a return of basis in any asset that was contributed to the trust (with respect to which a deduction was allowable under section 170, 2055, 2106, or 2522), and that is sold by the trust during the year for which the annuity amount is due.
(b) Special rule for trusts created before December 10, 1998. In addition to the circumstances described in paragraph (a)(1)(i)(a) of this section, a trust created before December 10, 1998, will not be deemed to have engaged in an act of self-dealing (within the meaning of section 4941), to have unrelated debt-financed income (within the meaning of section 514), to have received an additional contribution (within the meaning of paragraph (b) of this section), or to have failed to function exclusively as a charitable remainder trust (within the meaning of § 1.664-1(a)(4)) merely because the annuity amount is paid after the close of the taxable year if such payment is made within a reasonable time after the close of such taxable year and the sum certain to be paid each year as the annuity amount is 15 percent or less of the initial net fair market value of the property irrevocably passing in trust as determined for federal tax purposes.
(c) Reasonable time. For this paragraph (a)(1)(i), a reasonable time will not ordinarily extend beyond the date by which the trustee is required to file Form 5227, “Split-Interest Trust Information Return,” (including extensions) for the taxable year.
(d) Example. The following example illustrates the rules in paragraph (a)(1)(i)(a) of this section:
(e) Effective date. This paragraph (a)(1)(i) is applicable for taxable years ending after April 18, 1997. However, paragraphs (a)(1)(i)(a)(2) and (3) of this section apply only to distributions made on or after January 5, 2001.
(ii) Definition of sum certain. A sum certain is a stated dollar amount which is the same either as to each recipient or as to the total amount payable for each year of such period. For example, a provision for an amount which is the same every year to A until his death and concurrently an amount which is the same every year to B until his death, with the amount to each recipient to terminate at his death, would satisfy the above rule. Similarly, provisions for an amount to A and B for their joint lives and then to the survivor would satisfy the above rule. In the case of a distribution to an organization described in section 170(c) at the death of a recipient or the expiration of a term of years, the governing instrument may provide for a reduction of the stated amount payable after such a distribution: Provided, That:
(a) The reduced amount payable is the same either as to each recipient or as to the total amount payable for each year of the balance of such period, and
(b) The requirements of subparagraph (2)(ii) of this paragraph are met.
(iii) Sum certain stated as a fraction or percentage. The stated dollar amount may be expressed as a fraction or a percentage of the initial net fair market value of the property irrevocably passing in trust as finally determined for Federal tax purposes. If the stated dollar amount is so expressed and such market value is incorrectly determined by the fiduciary, the requirement of this subparagraph will be satisfied if the governing instrument provides that in such event the trust shall pay to the recipient (in the case of an undervaluation) or be repaid by the recipient (in the case of an overvaluation) an amount equal to the difference between the amount which the trust should have paid the recipient if the correct value were used and the amount which the trust actually paid the recipient. Such payments or repayments must be made within a reasonable period after the final determination of such value. Any payment due to a recipient by reason of such incorrect valuation shall be considered to be a payment required to be distributed at the time of such final determination for purposes of paragraph (d)(4)(ii) of § 1.664-1. See paragraph (d)(4) of § 1.664-1 for rules relating to the year of inclusion of such payments and the allowance of a deduction for such repayments. See paragraph (b) of this section for rules relating to future contributions. For rules relating to required adjustments for underpayments or overpayments of the amount described in this paragraph in respect of payments made during a reasonable period of administration, see paragraph (a)(5) of § 1.664-1. The application of the rule permitting the stated dollar amount to be expressed as a fraction or a percentage of the initial net fair market value of the property irrevocably passing in trust as finally determined for Federal tax purposes may be illustrated by the following example:
(iv) Computation of annuity amount in certain circumstances—(a) Short taxable years. The governing instrument provides that, in the case of a taxable year which is for a period of less than 12 months other than the taxable year in which occurs the end of the period specified in subparagraph (5) of this paragraph, the annuity amount determined under subdivision (i) of this subparagraph shall be the amount otherwise determined under that subdivision multiplied by a fraction the numerator of which is the number of days in the taxable year of the trust and the denominator of which is 365 (366 if February 29 is a day included in the numerator).
(b) Last taxable year of period. The governing instrument provides that, in the case of the taxable year in which occurs the end of the period specified in subparagraph (5) of this paragraph, the annuity amount which must be distributed under subdivision (i) of this subparagraph shall be the amount otherwise determined under that subdivision multiplied by a fraction the numerator of which is the number of days in the period beginning on the first day of such taxable year and ending on the last day of the period specified in subparagraph (5) of this paragraph and the denominator of which is 365 (366 if February 29 is a day included in the numerator). See subparagraph (5) of this paragraph for a special rule allowing termination of payment of the annuity amount with the regular payment next preceding the termination of the period specified therein.
(2) Minimum annuity amount—(i) General rule. The total amount payable under subparagraph (1) of this paragraph is not less than 5 percent of the initial net fair market value of the property placed in trust as finally determined for Federal tax purposes.
(ii) Reduction of annuity amount in certain cases. A trust will not fail to meet the requirements of this subparagraph by reason of the fact that it provides for a reduction of the stated amount payable upon the death of a recipient or the expiration of a term of years provided that:
(a) A distribution is made to an organization described in section 170(c) at the death of such recipient or the expiration of such term of years, and
(b) The total amounts payable each year under subparagraph (1) of this paragraph after such distribution are not less than a stated dollar amount which bears the same ratio to 5 percent of the initial net fair market value of the trust assets as the net fair market value of the trust assets immediately after such distribution bears to the net fair market value of the trust assets immediately before such distribution.
(iii) Rule applicable to inter vivos trust which does not provide for payment of minimum annuity amount. In the case where the grantor of an inter vivos trust underestimates in good faith the initial net fair market value of the property placed in trust as finally determined for Federal tax purposes and specifies a fixed dollar amount for the annuity which is less than 5 percent of the initial net fair market value of the property placed in trust as finally determined for Federal tax purposes, the trust will be deemed to have met the 5 percent requirement if the grantor or his representative consents, by appropriate agreement with the District Director, to accept an amount equal to 20 times the annuity as the fair market value of the property placed in trust for purposes of determining the appropriate charitable contributions deduction.
(3) Permissible recipients—(i) General rule. The amount described in subparagraph (1) of this paragraph is payable to or for the use of a named person or persons, at least one of which is not an organization described in section 170(c). If the amount described in subparagraph (1) of this paragraph is to be paid to an individual or individuals, all such individuals must be living at the time of the creation of the trust. A named person or persons may include members of a named class provided that, in the case of a class which includes any individual, all such individuals must be alive and ascertainable at the time of the creation of the trust unless the period for which the annuity amount is to be paid to such class consists solely of a term of years. For example, in the case of a testamentary trust, the testator’s will may provide that an amount shall be paid to his children living at his death.
(ii) Power to alter amount paid to recipients. A trust is not a charitable remainder annuity trust if any person has the power to alter the amount to be paid to any named person other than an organization described in section 170(c) if such power would cause any person to be treated as the owner of the trust, or any portion thereof, if subpart E, part 1, subchapter J, chapter 1, subtitle A of the Code were applicable to such trust. See paragraph (a)(4) of this section for a rule permitting the retention by a grantor of a testamentary power to revoke or terminate the interest of any recipient other than an organization described in section 170(c). For example, the governing instrument may not grant the trustee the power to allocate the annuity among members of a class unless such power falls within one of the exceptions to section 674(a).
(4) Other payments. No amount other than the amount described in subparagraph (1) of this paragraph may be paid to or for the use of any person other than an organization described in section 170(c). An amount is not paid to or for the use of any person other than an organization described in section 170(c) if the amount is transferred for full and adequate consideration. The trust may not be subject to a power to invade, alter, amend, or revoke for the beneficial use of a person other than an organization described in section 170(c). Notwithstanding the preceding sentence, the grantor may retain the power exercisable only by will to revoke or terminate the interest of any recipient other than an organization described in section 170(c). The governing instrument may provide that any amount other than the amount described in subparagraph (1) of this paragraph shall be paid (or may be paid in the discretion of the trustee) to an organization described in section 170(c) provided that in the case of distributions in kind, the adjusted basis of the property distributed is fairly representative of the adjusted basis of the property available for payment on the date of payment. For example, the governing instrument may provide that a portion of the trust assets may be distributed currently, or upon the death of one or more recipients, to an organization described in section 170(c).
(5) Period of payment of annuity amount—(i) General rules. The period for which an amount described in subparagraph (1) of this paragraph is payable begins with the first year of the charitable remainder trust and continues either for the life or lives of a named individual or individuals or for a term of years not to exceed 20 years. Only an individual or an organization described in section 170(c) may receive an amount for the life of an individual. If an individual receives an amount for life, it must be solely for his life. Payment of the amount described in subparagraph (1) of this paragraph may terminate with the regular payment next preceding the termination of the period described in this subparagraph. The fact that the recipient may not receive such last payment shall not be taken into account for purposes of determining the present value of the remainder interest. In the case of an amount payable for a term of years, the length of the term of years shall be ascertainable with certainty at the time of the creation of the trust, except that the term may be terminated by the death of the recipient or by the grantor’s exercise by will of a retained power to revoke or terminate the interest of any recipient other than an organization described in section 170(c). In any event, the period may not extend beyond either the life or lives of a named individual or individuals or a term of years not to exceed 20 years. For example, the governing instrument may not provide for the payment of an annuity amount to A for his life and then to B for a term of years because it is possible for the period to last longer than either the lives of recipients in being at the creation of the trust or a term of years not to exceed 20 years. On the other hand, the governing instrument may provide for the payment of an annuity amount to A for his life and then to B for his life or a term of years (not to exceed 20 years), whichever is shorter (but not longer), if both A and B are in being at the creation of the trust because it is not possible for the period to last longer than the lives of recipients in being at the creation of the trust.
(ii) Relationship to 5 percent requirement. The 5 percent requirement provided in subparagraph (2) of this paragraph must be met until the termination of all of the payments described in subparagraph (1) of this paragraph. For example, the following provisions would satisfy the above rules:
(a) An amount equal to at least 5 percent of the initial net fair market value of the property placed in trust to A and B for their joint lives and then to the survivor for his life;
(b) An amount equal to at least 5 percent of the initial net fair market value of the property placed in trust to A for life or for a term of years not longer than 20 years, whichever is longer (or shorter);
(c) An amount equal to at least 5 percent of the initial net fair market value of the property placed in trust to A for a term of years not longer than 20 years and then to B for life (provided B was living at the date of creation of the trust);
(d) An amount to A for his life and concurrently an amount to B for his life (the amount to each recipient to terminate at his death) if the amount given to each individual is not less than 5 percent of the initial net fair market value of the property placed in trust; or
(e) An amount to A for his life and concurrently an equal amount to B for his life, and at the death of the first to die, the trust to distribute one-half of the then value of its assets to an organization described in section 170(c), if the total of the amounts given to A and B is not less than 5 percent of the initial net fair market value of the property placed in trust.
(6) Permissible remaindermen—(i) General rule. At the end of the period specified in subparagraph (5) of this paragraph the entire corpus of the trust is required to be irrevocably transferred, in whole or in part, to or for the use of one or more organizations described in section 170(c) or retained, in whole or in part, for such use.
(ii) Treatment of trust. If all of the trust corpus is to be retained for such use, the taxable year of the trust shall terminate at the end of the period specified in subparagraph (5) of this paragraph and the trust shall cease to be treated as a charitable remainder trust for all purposes. If all or any portion of the trust corpus is to be transferred to or for the use of such organization or organizations, the trustee shall have a reasonable time after the period specified in subparagraph (5) of this paragraph to complete the settlement of the trust. During such time, the trust shall continue to be treated as a charitable remainder trust for all purposes, such as sections 664, 4947(a)(2), and 4947(b)(3)(B). Upon the expiration of such period, the taxable year of the trust shall terminate and the trust shall cease to be treated as a charitable remainder trust for all purposes. If the trust continues in existence, it will be subject to the provisions of section 4947(a)(1) unless the trust is exempt from taxation under section 501(a). For purposes of determining whether the trust is exempt under section 501(a) as an organization described in section 501(c)(3), the trust shall be deemed to have been created at the time it ceases to be treated as a charitable remainder trust.
(iii) Concurrent or successive remaindermen. Where interests in the corpus of the trust are given to more than one organization described in section 170(c) such interests may be enjoyed by them either concurrently or successively.
(iv) Alternative remaindermen. The governing instrument shall provide that if an organization to or for the use of which the trust corpus is to be transferred or for the use of which the trust corpus is to be retained is not an organization described in section 170(c) at the time any amount is to be irrevocably transferred to or for the use of such organization, such amount shall be transferred to or for the use of one or more alternative organizations which are described in section 170(c) at such time or retained for such use. Such alternative organization or organizations may be selected in any manner provided by the terms of the governing instrument.
(b) Additional contributions. A trust is not a charitable remainder annuity trust unless its governing instrument provides that no additional contributions may be made to the charitable remainder annuity trust after the initial contribution. For purposes of this section, all property passing to a charitable remainder annuity trust by reason of death of the grantor shall be considered one contribution.
(c) Calculation of the fair market value of the remainder interest of a charitable remainder annuity trust. For purposes of sections 170, 2055, 2106, and 2522, the fair market value of the remainder interest of a charitable remainder annuity trust (as described in this section) is the net fair market value (as of the appropriate valuation date) of the property placed in trust less the present value of the annuity. For purposes of this section, valuation date means, in general, the date on which the property is transferred to the trust by the donor regardless of when the trust is created. In the case of transfers to a charitable remainder annuity trust for which the valuation date is after April 30, 1999, if an election is made under section 7520 and § 1.7520-2(b) to compute the present value of the charitable interest by using the interest rate component for either of the 2 months preceding the month in which the transfer is made, the month so elected is the valuation date for purposes of determining the interest rate and mortality tables. For purposes of section 2055 or 2106, the valuation date is the date of death unless the alternate valuation date is elected in accordance with section 2032 in which event, and within the limitations set forth in section 2032 and the regulations in this part under section 2032, the valuation date is the alternate valuation date. If the decedent’s estate elects the alternate valuation date under section 2032 and also elects, under section 7520 and § 1.7520-2(b), to use the interest rate component for one of the 2 months preceding the alternate valuation date, the month so elected is the valuation date for purposes of determining the interest rate and mortality tables. The present value of an annuity is computed under § 20.2031-7(d) of this chapter for transfers for which the valuation date is on or after June 1, 2023, or under § 20.2031-7A(a) through (g) of this chapter, whichever is applicable, for transfers for which the valuation date is before June 1, 2023. See, however, §§ 20.2031-7(d)(3) and 25.2512-5(d)(3) (transition rules) and 1.7520-3(b) (relating to exceptions to the use of prescribed tables under certain circumstances).
(d) Deduction for transfers to a charitable remainder annuity trust. For rules relating to a deduction for transfers to a charitable remainder annuity trust, see section 170, 2055, 2106, or 2522 and the regulations thereunder. Any claim for deduction on any return for the value of a remainder interest in a charitable remainder annuity trust must be supported by a full statement attached to the return showing the computation of the present value of such interest. The deduction allowed by section 170 is limited to the fair market value of the remainder interest of a charitable remainder annuity trust regardless of whether an organization described in section 170(c) also receives a portion of the annuity. For a special rule relating to the reduction of the amount of a charitable contribution deduction with respect to a contribution of certain ordinary income property or capital gain property, see section 170(e)(1)(A) or 170(e)(1)(B)(i) and the regulations thereunder. For rules for postponing the time for deduction of a charitable contribution of a future interest in tangible personal property, see section 170(a)(3) and the regulations thereunder.
(e) Applicability date. Paragraph (c) of this section applies on and after June 1, 2023.
§ 1.664-3 Charitable remainder unitrust.
(a) Description. A charitable remainder unitrust is a trust which complies with the applicable provisions of § 1.664-1 and meets all of the following requirements:
(1) Required payment of unitrust amount—(i) Payment of fixed percentage at least annually—(a) General rule. The governing instrument provides that the trust will pay not less often than annually a fixed percentage of the net fair market value of the trust assets determined annually to a person or persons described in paragraph (a)(3) of this section for each taxable year of the period specified in paragraph (a)(5) of this section. This paragraph (a)(1)(i)(a) is applicable for taxable years ending after April 18, 1997.
(b) Income exception. Instead of the amount described in (a) of this subdivision (i), the governing instrument may provide that the trust shall pay for any year either the amount described in (1) or the total of the amounts described in (1) and (2) of this subdivision (b).
(1) The amount of trust income for a taxable year to the extent that such amount is not more than the amount required to be distributed under paragraph (a)(1)(i)(a) of this section.
(2) An amount of trust income for a taxable year that is in excess of the amount required to be distributed under paragraph (a)(1)(i)(a) of this section for such year to the extent that (by reason of paragraph (a)(1)(i)(b)(1) of this section) the aggregate of the amounts paid in prior years was less than the aggregate of such required amounts.
(3) For purposes of this paragraph (a)(1)(i)(b), trust income generally means income as defined under section 643(b) and the applicable regulations. However, trust income may not be determined by reference to a fixed percentage of the annual fair market value of the trust property, notwithstanding any contrary provision in applicable state law. Proceeds from the sale or exchange of any assets contributed to the trust by the donor must be allocated to principal and not to trust income at least to the extent of the fair market value of those assets on the date of their contribution to the trust. Proceeds from the sale or exchange of any assets purchased by the trust must be allocated to principal and not to trust income at least to the extent of the trust’s purchase price of those assets. Except as provided in the two preceding sentences, proceeds from the sale or exchange of any assets contributed to the trust by the donor or purchased by the trust may be allocated to income, pursuant to the terms of the governing instrument, if not prohibited by applicable local law. A discretionary power to make this allocation may be granted to the trustee under the terms of the governing instrument but only to the extent that the state statute permits the trustee to make adjustments between income and principal to treat beneficiaries impartially.
(4) The rules in paragraph (a)(1)(i)(b)(1) and (2) of this section are applicable for taxable years ending after April 18, 1997. The rule in the first sentence of paragraph (a)(1)(i)(b)(3) is applicable for taxable years ending after April 18, 1997. The rules in the second, fourth, and fifth sentences of paragraph (a)(1)(i)(b)(3) are applicable for taxable years ending after January 2, 2004. The rule in the third sentence of paragraph (a)(1)(i)(b)(3) is applicable for sales or exchanges that occur after April 18, 1997. The rule in the sixth sentence of paragraph (a)(1)(i)(b)(3) is applicable for trusts created after January 2, 2004.
(c) Combination of methods. Instead of the amount described in paragraph (a)(1)(i)(a) or (b) of this section, the governing instrument may provide that the trust will pay not less often than annually the amount described in paragraph (a)(1)(i)(b) of this section for an initial period and then pay the amount described in paragraph (a)(1)(i)(a) of this section (calculated using the same fixed percentage) for the remaining years of the trust only if the governing instrument provides that—
(1) The change from the method prescribed in paragraph (a)(1)(i)(b) of this section to the method prescribed in paragraph (a)(1)(i)(a) of this section is triggered on a specific date or by a single event whose occurrence is not discretionary with, or within the control of, the trustees or any other persons;
(2) The change from the method prescribed in paragraph (a)(1)(i)(b) of this section to the method prescribed in paragraph (a)(1)(i)(a) of this section occurs at the beginning of the taxable year that immediately follows the taxable year during which the date or event specified under paragraph (a)(1)(i)(c)(1) of this section occurs; and
(3) Following the trust’s conversion to the method described in paragraph (a)(1)(i)(a) of this section, the trust will pay at least annually to the permissible recipients the amount described only in paragraph (a)(1)(i)(a) of this section and not any amount described in paragraph (a)(1)(i)(b) of this section.
(d) Triggering event. For purposes of paragraph (a)(1)(i)(c)(1) of this section, a triggering event based on the sale of unmarketable assets as defined in § 1.664-1(a)(7)(ii), or the marriage, divorce, death, or birth of a child with respect to any individual will not be considered discretionary with, or within the control of, the trustees or any other persons.
(e) Examples. The following examples illustrate the rules in paragraph (a)(1)(i)(c) of this section. For each example, assume that the governing instrument of charitable remainder unitrust Y provides that Y will initially pay not less often than annually the amount described in paragraph (a)(1)(i)(b) of this section and then pay the amount described in paragraph (a)(1)(i)(a) of this section (calculated using the same fixed percentage) for the remaining years of the trust and that the requirements of paragraphs (a)(1)(i)(c)(2) and (3) of this section are satisfied. The examples are as follows:
(f) Effective date—(1) General rule. Paragraphs (a)(1)(i)(c), (d), and (e) of this section are applicable for charitable remainder trusts created on or after December 10, 1998.
(2) General rule regarding reformations of combination of method unitrusts. If a trust is created on or after December 10, 1998, and contains a provision allowing a change in calculating the unitrust amount that does not comply with the provisions of paragraph (a)(1)(i)(c) of this section, the trust will qualify as a charitable remainder unitrust only if it is amended or reformed to use the initial method for computing the unitrust amount throughout the term of the trust, or is reformed in accordance with paragraph (a)(1)(i)(f)(3) of this section. If a trust was created before December 10, 1998, and contains a provision allowing a change in calculating the unitrust amount that does not comply with the provisions of paragraph (a)(1)(i)(c) of this section, the trust may be reformed to use the initial method for computing the unitrust amount throughout the term of the trust without causing the trust to fail to function exclusively as a charitable remainder unitrust under § 1.664-1(a)(4), or may be reformed in accordance with paragraph (a)(1)(i)(f)(3) of this section. Except as provided in paragraph (a)(1)(i)(f)(3) of this section, a qualified charitable remainder unitrust will not continue to qualify as a charitable remainder unitrust if it is amended or reformed to add a provision allowing a change in the method for calculating the unitrust amount.
(3) Special rule for reformations of trusts that begin by June 8, 1999. Notwithstanding paragraph (a)(1)(i)(f)(2) of this section, if a trust either provides for payment of the unitrust amount under a combination of methods that is not permitted under paragraph (a)(1)(i)(c) of this section, or provides for payment of the unitrust amount under only the method prescribed in paragraph (a)(1)(i)(b) of this section, then the trust may be reformed to allow for a combination of methods permitted under paragraph (a)(1)(i)(c) of this section without causing the trust to fail to function exclusively as a charitable remainder unitrust under § 1.664-1(a)(4) or to engage in an act of self-dealing under section 4941 if the trustee begins legal proceedings to reform by June 8, 1999. The triggering event under the reformed governing instrument may not occur in a year prior to the year in which the court issues the order reforming the trust, except for situations in which the governing instrument prior to reformation already provided for payment of the unitrust amount under a combination of methods that is not permitted under paragraph (a)(1)(i)(c) of this section and the triggering event occurred prior to the reformation.
(g) Payment under general rule for fixed percentage trusts. When the unitrust amount is computed under paragraph (a)(1)(i)(a) of this section, a trust will not be deemed to have engaged in an act of self-dealing (within the meaning of section 4941), to have unrelated debt-financed income (within the meaning of section 514), to have received an additional contribution (within the meaning of paragraph (b) of this section), or to have failed to function exclusively as a charitable remainder trust (within the meaning of § 1.664-1(a)(4)) merely because the unitrust amount is paid after the close of the taxable year if such payment is made within a reasonable time after the close of such taxable year and the entire unitrust amount in the hands of the recipient is characterized only as income from the categories described in section 664(b)(1), (2), or (3), except to the extent it is characterized as corpus described in section 664(b)(4) because—
(1) The trust pays the unitrust amount by distributing property (other than cash) that it owned at the close of the taxable year, and the trustee elects to treat any income generated by the distribution as occurring on the last day of the taxable year in which the unitrust amount is due;
(2) The trust pays the unitrust amount by distributing cash that was contributed to the trust (with respect to which a deduction was allowable under section 170, 2055, 2106, or 2522); or
(3) The trust pays the unitrust amount by distributing cash received as a return of basis in any asset that was contributed to the trust (with respect to which a deduction was allowable under section 170, 2055, 2106, or 2522), and that is sold by the trust during the year for which the unitrust amount is due.
(h) Special rule for fixed percentage trusts created before December 10, 1998. When the unitrust amount is computed under paragraph (a)(1)(i)(a) of this section, a trust created before December 10, 1998, will not be deemed to have engaged in an act of self-dealing (within the meaning of section 4941), to have unrelated debt-financed income (within the meaning of section 514), to have received an additional contribution (within the meaning of paragraph (b) of this section), or to have failed to function exclusively as a charitable remainder trust (within the meaning of § 1.664-1(a)(4)) merely because the unitrust amount is paid after the close of the taxable year if such payment is made within a reasonable time after the close of such taxable year and the fixed percentage to be paid each year as the unitrust amount is 15 percent or less of the net fair market value of the trust assets as determined under paragraph (a)(1)(iv) of this section.
(i) Example. The following example illustrates the rules in paragraph (a)(1)(i)(g) of this section:
(j) Payment under income exception. When the unitrust amount is computed under paragraph (a)(1)(i)(b) of this section, a trust will not be deemed to have engaged in an act of self-dealing (within the meaning of section 4941), to have unrelated debt-financed income (within the meaning of section 514), to have received an additional contribution (within the meaning of paragraph (b) of this section), or to have failed to function exclusively as a charitable remainder trust (within the meaning of § 1.664-1(a)(4)) merely because payment of the unitrust amount is made after the close of the taxable year if such payment is made within a reasonable time after the close of such taxable year.
(k) Reasonable time. For paragraphs (a)(1)(i) (g), (h), and (j) of this section, a reasonable time will not ordinarily extend beyond the date by which the trustee is required to file Form 5227, “Split-Interest Trust Information Return,” (including extensions) for the taxable year.
(l) Effective date. Paragraphs (a)(1)(i) (g), (h), (i), (j), and (k) of this section are applicable for taxable years ending after April 18, 1997. Paragraphs (a)(1)(i)(g)(2) and (3) apply only to distributions made on or after January 5, 2001.
(ii) Definition of fixed percentage. The fixed percentage may be expressed either as a fraction or as a percentage and must be payable each year in the period specified in subparagraph (5) of this paragraph. A percentage is fixed if the percentage is the same either as to each recipient or as to the total percentage payable each year of such period. For example, provision for a fixed percentage which is the same every year to A until his death and concurrently a fixed percentage which is the same every year to B until his death, the fixed percentage to each recipient to terminate at his death, would satisfy the rule. Similarly, provision for a fixed percentage to A and B for their joint lives and then to the survivor would satisfy the rule. In the case of a distribution to an organization described in section 170(c) at the death of a recipient or the expiration of a term of years, the governing instrument may provide for a reduction of the fixed percentage payable after such distribution Provided That:
(a) The reduced fixed percentage is the same either as to each recipient or as to the total amount payable for each year of the balance of such period, and
(b) The requirements of subparagraph (2)(ii) of this paragraph are met.
(iii) Rules applicable to incorrect valuations. The governing instrument provides that in the case where the net fair market value of the trust assets is incorrectly determined by the fiduciary, the trust shall pay to the recipient (in the case of an undervaluation) or be repaid by the recipient (in the case of an overvaluation) an amount equal to the difference between the amount which the trust should have paid the recipient if the correct value were used and the amount which the trust actually paid the recipient. Such payments or repayments must be made within a reasonable period after the final determination of such value. Any payment due to a recipient by reason of such incorrect valuation shall be considered to be a payment required to be distributed at the time of such final determination for purposes of paragraph (d)(4)(ii) of § 1.664-1. See paragraph (d)(4) of § 1.664-1 for rules relating to the year of inclusion of such payments and the allowance of a deduction for such repayments. See paragraph (b) of this section for rules relating to additional contributions.
(iv) Rules applicable to valuation. In computing the net fair market value of the trust assets there shall be taken into account all assets and liabilities without regard to whether particular items are taken into account in determining the income of the trust. The net fair market value of the trust assets may be determined on any one date during the taxable year of the trust, or by taking the average of valuations made on more than one date during the taxable year of the trust, so long as the same valuation date or dates and valuation methods are used each year. If the governing instrument does not specify the valuation date or dates, the trustee must select such date or dates and indicate the selection on the first return on Form 5227, “Split-Interest Trust Information Return,” that the trust must file. The amount described in subdivision (i)(a) of this subparagraph which must be paid each year must be based upon the valuation for such year.
(v) Computation of unitrust amount in certain circumstances—(a) Short taxable years. The governing instrument provides that, in the case of a taxable year which is for a period of less than 12 months other than the taxable year in which occurs the end of the period specified in subparagraph (5) of this paragraph:
(1) The amount determined under subdivision (i)(a) of this subparagraph shall be the amount otherwise determined under that subdivision multiplied by a fraction the numerator of which is the number of days in the taxable year of the trust and the denominator of which is 365 (366 if February 29 is a day included in the numerator),
(2) The amount determined under subdivision (i)(b) of this subparagraph shall be computed by using the amount determined under subdivision (a)(1) of this subdivision (v), and
(3) If no valuation date occurs before the end of the taxable year of the trust, the trust assets shall be valued as of the last day of the taxable year of the trust.
(b) Last taxable year of period. (1) The governing instrument provides that, in the case of the taxable year in which occurs the end of the period specified in subparagraph (5) of this paragraph:
(i) The unitrust amount which must be distributed under subdivision (i)(a) of this subparagraph shall be the amount otherwise determined under that subdivision multiplied by a fraction the numerator of which is the number of days in the period beginning on the first day of such taxable year and ending on the last day of the period specified in subparagraph (5) of this paragraph and the denominator of which is 365 (366 if February 29 is a day included in the numerator),
(ii) The amount determined under subdivision (i)(b) of this subparagraph shall be computed by using the amount determined under (b)(1)(i) of this subdivision (v), and
(iii) If no valuation date occurs before the end of such period, the trust assets shall be valued as of the last day of such period.
(2) See subparagraph (5) of this paragraph for a special rule allowing termination of payment of the unitrust amount with the regular payment next preceding the termination of the period specified therein.
(2) Minimum unitrust amount—(i) General rule. The fixed percentage described in subparagraph (1)(i) of this paragraph with respect to all beneficiaries taken together is not less than 5 percent.
(ii) Reduction of unitrust amount in certain cases. A trust will not fail to meet the requirements of this subparagraph by reason of the fact that it provides for a reduction of the fixed percentage payable upon the death of a recipient or the expiration of a term of years Provided That:
(a) A distribution is made to an organization described in section 170(c) at the death of such recipient or the expiration of such term of years, and
(b) The total of the percentage payable under subparagraph (1) of this paragraph after such distribution is not less than 5 percent.
(3) Permissible recipients—(i) General rule. The amount described in subparagraph (1) of this paragraph is payable to or for the use of a named person or persons, at least one of which is not an organization described in section 170(c). If the amount described in subparagraph (1) of this paragraph is to be paid to an individual or individuals, all such individuals must be living at the time of creation of the trust. A named person or persons may include members of a named class except in the case of a class which includes any individual, all such individuals must be alive and ascertainable at the time of the creation of the trust unless the period for which the unitrust amount is to be paid to such class consists solely of a term of years. For example, in the case of a testamentary trust, the testator’s will may provide that the required amount shall be paid to his children living at his death.
(ii) Power to alter amount paid to recipients. A trust is not a charitable remainder unitrust if any person has the power to alter the amount to be paid to any named person other than an organization described in section 170(c) if such power would cause any person to be treated as the owner of the trust, or any portion thereof, if subpart E, part 1, subchapter J, chapter 1, subtitle A of the Code were applicable to such trust. See paragraph (a)(4) of this section for a rule permitting the retention by a grantor of a testamentary power to revoke or terminate the interest of any recipient other than an organization described in section 170(c). For example, the governing instrument may not grant the trustee the power to allocate the fixed percentage among members of a class unless such power falls within one of the exceptions to section 674(a).
(4) Other payments. No amount other than the amount described in subparagraph (1) of this paragraph may be paid to or for the use of any person other than an organization described in section 170(c). An amount is not paid to or for the use of any person other than an organization described in section 170(c) if the amount is transferred for full and adequate consideration. The trust may not be subject to a power to invade, alter, amend, or revoke for the beneficial use of a person other than an organization described in section 170(c). Notwithstanding the preceding sentence, the grantor may retain the power exercisable only by will to revoke or terminate the interest of any recipient other than an organization described in section 170(c). The governing instrument may provide that any amount other than the amount described in subparagraph (1) of this paragraph shall be paid (or may be paid in the discretion of the trustee) to an organization described in section 170(c) provided that, in the case of distributions in kind, the adjusted basis of the property distributed is fairly representative of the adjusted basis of the property available for payment on the date of payment. For example, the governing instrument may provide that a portion of the trust assets may be distributed currently, or upon the death of one or more recipients, to an organization described in section 170(c).
(5) Period of payment of unitrust amount—(i) General rules. The period for which an amount described in subparagraph (1) of this paragraph is payable begins with the first year of the charitable remainder trust and continues either for the life or lives of a named individual or individuals or for a term of years not to exceed 20 years. Only an individual or an organization described in section 170(c) may receive an amount for the life of an individual. If an individual receives an amount for life, it must be solely for his life. Payment of the amount described in subparagraph (1) of this paragraph may terminate with the regular payment next preceding the termination of the period described in this subparagraph. The fact that the recipient may not receive such last payment shall not be taken into account for purposes of determining the present value of the remainder interest. In the case of an amount payable for a term of years, the length of the term of years shall be ascertainable with certainty at the time of the creation of the trust, except that the term may be terminated by the death of the recipient or by the grantor’s exercise by will of a retained power to revoke or terminate the interest of any recipient other than an organization described in section 170(c). In any event, the period may not extend beyond either the life or lives of a named individual or individuals or a term of years not to exceed 20 years. For example, the governing instrument may not provide for the payment of a unitrust amount to A for his life and then to B for a term of years because it is possible for the period to last longer than either the lives of recipients in being at the creation of the trust or a term of years not to exceed 20 years. On the other hand, the governing instrument may provide for the payment of a unitrust amount to A for his life and then to B for his life or a term of years (not to exceed 20 years), whichever is shorter (but not longer), if both A and B are in being at the creation of the trust because it is not possible for the period to last longer than the lives of recipients in being at the creation of the trust.
(ii) Relationship to 5 percent requirement. The 5 percent requirement provided in subparagraph (2) of this paragraph must be met until the termination of all of the payments described in subparagraph (1) of this paragraph. For example, the following provisions would satisfy the above rules:
(a) A fixed percentage of at least 5 percent to A and B for their joint lives and then to the survivor for his life;
(b) A fixed percentage of at least 5 percent to A for life or for a term of years not longer than 20 years, whichever is longer (or shorter);
(c) A fixed percentage of at least 5 percent to A for life or for a term of years not longer than 20 years and then to B for life (provided B was living at the creation of the trust);
(d) A fixed percentage to A for his life and concurrently a fixed percentage to B for his life (the percentage to each recipient to terminate at his death) if the percentage given to each individual is not less than 5 percent;
(e) A fixed percentage to A for his life and concurrently an equal percentage to B for his life, and at the death of the first to die, the trust to distribute one-half of the then value of its assets to an organization described in section 170(c) if the total of the percentages is not less than 5 percent for the entire period described in this subparagraph.
(6) Permissible remaindermen—(i) General rule. At the end of the period specified in subparagraph (5) of this paragraph, the entire corpus of the trust is required to be irrevocably transferred, in whole or in part, to or for the use of one or more organizations described in section 170(c) or retained, in whole or in part, for such use.
(ii) Treatment of trust. If all of the trust corpus is to be retained for such use, the taxable year of the trust shall terminate at the end of the period specified in subparagraph (5) of this paragraph and the trust shall cease to be treated as a charitable remainder trust for all purposes. If all or any portion of the trust corpus is to be transferred to or for the use of such organization or organizations, the trustee shall have a reasonable time after the period specified in subparagraph (5) of this paragraph to complete the settlement of the trust. During such time, the trust shall continue to be treated as a charitable remainder trust for all purposes, such as section 664, 4947(a)(2), and 4947(b)(3)(B). Upon the expiration of such period, the taxable year of the trust shall terminate and the trust shall cease to be treated as a charitable remainder trust for all purposes. If the trust continues in existence, it will be subject to the provisions of section 4947(a)(1) unless the trust is exempt from taxation under section 501(a). For purposes of determining whether the trust is exempt under section 501(a) as an organization described in section 501(c)(3), the trust shall be deemed to have been created at the time it ceases to be treated as a charitable remainder trust.
(iii) Concurrent or successive remaindermen. Where interests in the corpus of the trust are given to more than one organization described in section 170(c) such interests may be enjoyed by them either concurrently or successively.
(iv) Alternative remaindermen. The governing instrument shall provide that if an organization to or for the use of which the trust corpus is to be transferred or for the use of which the trust corpus is to be retained is not an organization described in section 170(c) at the time any amount is to be irrevocably transferred to or for the use of such organization, such amount shall be transferred to or for the use of or retained for the use of one or more alternative organizations which are described in section 170(c) at such time. Such alternative organization or organizations may be selected in any manner provided by the terms of the governing instrument.
(b) Additional contributions. A trust is not a charitable remainder annuity trust unless its governing instrument either prohibits additional contributions to the trust after the initial contribution or provides that for the taxable year of the trust in which the additional contribution is made:
(1) Where no valuation date occurs after the time of the contribution and during the taxable year in which the contribution is made, the additional property shall be valued as of the time of contribution; and
(2) The amount described in paragraph (a)(1)(i)(a) of this section shall be computed by multiplying the fixed percentage by the sum of (i) the net fair market value of the trust assets (excluding the value of the additional property and any earned income from and any appreciation on such property after its contribution), and (ii) that proportion of the value of the additional property (that was excluded under subdivision (i) of this paragraph), which the number of days in the period which begins with the date of contribution and ends with the earlier of the last day of such taxable year or the last day of the period described in paragraph (a)(5) of this section bears to the number of days in the period which begins with the first day of such taxable year and ends with the earlier of the last day of such taxable year or the last day of the period described in paragraph (a)(5) of this section.
(c) Calculation of the fair market value of the remainder interest of a charitable remainder unitrust. See § 1.664-4 for rules relating to the calculation of the fair market value of the remainder interest of a charitable remainder unitrust.
(d) Deduction for transfers to a charitable remainder unitrust. For rules relating to a deduction for transfers to a charitable remainder unitrust, see section 170, 2055, 2106, or 2522 and the regulations thereunder. The deduction allowed by section 170 for transfers to charity is limited to the fair market value of the remainder interest of a charitable remainder unitrusts regardless of whether an organization described in section 170(c) also receives a portion of the amount described in § 1.664-3(a)(1). For a special rule relating to the reduction of the amount of a charitable contribution deduction with respect to a contribution of certain ordinary income property or capital gain property, see section 170(e)(1) (A) or (B)(i) and the regulations thereunder. For rules for postponing the time for deduction of a charitable contribution of a future interest in tangible personal property, see section 170(a)(3) and the regulations thereunder.
§ 1.664-4 Calculation of the fair market value of the remainder interest in a charitable remainder unitrust.
(a) Rules for determining present value. For purposes of sections 170, 2055, 2106, and 2522, the fair market value of a remainder interest in a charitable remainder unitrust (as described in § 1.664-3) is its present value determined under paragraph (d) of this section. The present value determined under this section shall be computed on the basis of—
(1) Life contingencies determined as to each life involved, from the values of l
(2) Interest at the section 7520 rate in the case of transfers for which the valuation date is after April 30, 1989, or 10 percent in the case of transfers to charitable remainder unitrusts made after November 30, 1983, for which the valuation date is before May 1, 1989. See § 20.2031-7A (a) through (c) of this chapter, whichever is applicable, for transfers for which the valuation date is before December 1, 1983; and
(3) The assumption that the amount described in § 1.664-3(a)(1)(i)(a) is distributed in accordance with the payout sequence described in the governing instrument. If the governing instrument does not prescribe when the distribution is made during the period for which the payment is made, for purposes of this section, the distribution is considered payable on the first day of the period for which the payment is made.
(b) Actuarial Computations by the Internal Revenue Service. The regulations in this and in related sections provide tables of actuarial factors and examples that illustrate the use of the tables in determining the value of remainder interests in property. Section 1.7520-1(c)(2) refers to government publications that provide additional tables of factors and examples of computations for more complex situations. If the computation requires the use of a factor that is not provided in this section, the Commissioner may supply the factor upon a request for a ruling. A request for a ruling must be accompanied by a recitation of the facts including the date of birth of each measuring life, and copies of the relevant documents. A request for a ruling must comply with the instructions for requesting a ruling published periodically in the Internal Revenue Bulletin (See § 601.601(d)(2)(ii)(b) of this chapter) and include payment of the required user fee. If the Commissioner furnishes the factor, a copy of the letter supplying the factor should be attached to the tax return in which the deduction is claimed. If the Commissioner does not furnish the factor, the taxpayer must furnish a factor computed in accordance with the principles set forth in this section.
(c) Statement supporting deduction required. Any claim for a deduction on any return for the value of a remainder interest in a charitable remainder unitrust must be supported by a full statement attached to the return showing the computation of the present value of such interest.
(d) Valuation. The fair market value of a remainder interest in a charitable remainder unitrust (as described in § 1.664-3) for transfers for which the valuation date is on or after June 1, 2023, is its present value determined under paragraph (e) of this section. The fair market value of a remainder interest in a charitable remainder unitrust (as described in § 1.664-3) for transfers for which the valuation date is before June 1, 2023, is its present value determined under the following sections:
Table 1 to Paragraph
| Valuation dates | Applicable
regulations | |
|---|---|---|
| After | Before | |
| 01-01-52 | 1.664-4A(a) | |
| 12-31-51 | 01-01-71 | 1.664-4A(b) |
| 12-31-70 | 12-01-83 | 1.664-4A(c) |
| 11-30-83 | 05-01-89 | 1.664-4A(d) |
| 04-30-89 | 05-01-99 | 1.664-4A(e) |
| 04-30-99 | 05-01-09 | 1.664-4A(f) |
| 04-30-09 | 06-01-23 | 1.664-4A(g) |
(e) Valuation of charitable remainder unitrusts having certain payout sequences for transfers for which the valuation date is on or after June 1, 2023—(1) In general. Except as otherwise provided in paragraph (e)(2) of this section, in the case of transfers for which the valuation date is on or after June 1, 2023, the present value of a remainder interest is determined under paragraphs (e)(3) through (7) of this section, provided that, in a short taxable year, the trustee must prorate the unitrust amount as provided in § 1.664-3(a)(1)(v). See, however, § 1.7520-3(b) (relating to exceptions to the use of the prescribed tables under certain circumstances).
(2) Transitional rule for valuation of charitable remainder unitrusts. For purposes of section 170, 2055, 2106, 2522, or 2624, in the case of transfers to a charitable remainder unitrust for which the valuation date is after April 30, 2019, and on or before June 1, 2023, the present value of a remainder interest based on one or more measuring lives is determined under this section by using the section 7520 interest rate for the month in which the valuation date occurs (see §§ 1.7520-1(b) and 1.7520-2(a)(2)) and the appropriate actuarial factors derived from the selected mortality table, either Table 2010CM in § 20.2031-7(d)(7)(ii) of this chapter or Table 2000CM in § 20.2031-7A(g)(4) of this chapter, at the option of the donor or the decedent’s executor, as the case may be. If any previously filed income tax return is amended to use the actuarial factors based on Table 2010CM, the amended return must state at the top “AMENDED PURSUANT TO TD 9974.” If any previously filed gift or estate tax return is supplemented to use the actuarial factors based on Table 2010CM, the supplemental return must state at the top “SUPPLEMENTED PURSUANT TO TD 9974.” For the convenience of taxpayers, actuarial factors based on Table 2010CM appear in the current version of Table U(1), and actuarial factors based on Table 2000CM appear in the previous version of Table U(1). Both versions of Table U(1) currently are available, at no charge, electronically via the IRS website at https://www.irs.gov/retirement-plans/actuarial-tables (or a corresponding URL as may be updated from time to time). The donor or decedent’s executor must consistently use the same mortality basis with respect to each interest (income, remainder, partial, etc.) in the same property, and with respect to all transfers occurring on the same valuation date. For example, gift and income tax charitable deductions with respect to the same transfer must be determined based on factors with the same mortality basis, and all assets includible in the gross estate and/or estate tax deductions claimed must be valued based on factors with the same mortality basis.
(3) Adjusted payout rate. For transfers for which the valuation date is after April 30, 1989, the adjusted payout rate is determined by using the appropriate Table F in paragraph (e)(6) of this section, for the section 7520 interest rate applicable to the transfer. If the interest rate is between 4.2 and 14 percent, see paragraph (e)(6) of this section. If the interest rate is below 4.2 percent or greater than 14 percent, see paragraph (b) of this section. The adjusted payout rate is determined by multiplying the fixed percentage described in § 1.664-3(a)(1)(i)(a) by the factor describing the payout sequence of the trust and the number of months by which the valuation date for the first full taxable year of the trust precedes the first payout date for such taxable year. If the governing instrument does not prescribe when the distribution or distributions shall be made during the taxable year of the trust, see paragraph (a) of this section. In the case of a trust having a payout sequence for which no figures have been provided by the appropriate table, and in the case of a trust that determines the fair market value of the trust assets by taking the average of valuations on more than one date during the taxable year, see paragraph (b) of this section.
(4) Period is a term of years. If the period described in § 1.664-3(a)(5) is a term of years, the factor that is used in determining the present value of the remainder interest for transfers for which the valuation date is after November 30, 1983, is the factor under the appropriate adjusted payout rate in Table D of paragraph (e)(6) of this section corresponding to the number of years in the term. If the adjusted payout rate is an amount that is between adjusted payout rates for which factors are provided in Table D, a linear interpolation must be made. The present value of the remainder interest is determined by multiplying the net fair market value (as of the appropriate valuation date) of the property placed in trust by the factor determined under this paragraph. For purposes of this section, the valuation date is, in the case of an inter vivos transfer, the date on which the property is transferred to the trust by the donor. However, if an election is made under section 7520 and § 1.7520-2(b) to compute the present value of the charitable interest by use of the interest rate component for either of the 2 months preceding the month in which the date of transfer falls, the month so elected is the valuation date for purposes of determining the interest rate and mortality tables. In the case of a testamentary transfer under section 2055, 2106, or 2624, the valuation date is the date of death, unless the alternate valuation date is elected under section 2032, in which event, and within the limitations set forth in section 2032 and the regulations thereunder, the valuation date is the alternate valuation date. If the decedent’s estate elects the alternate valuation date under section 2032 and also elects, under section 7520 and § 1.7520-2(b), to use the interest rate component for one of the 2 months preceding the alternate valuation date, the month so elected is the valuation date for purposes of determining the interest rate and mortality tables. The application of this paragraph (e)(4) may be illustrated by the following example:
| Factor at 7.4 percent for 12 years | .397495 |
| Factor at 7.6 percent for 12 years | .387314 |
| Difference | .010181 |
| Factor at 7.4 percent for 12 years | .397495 |
| Less: Interpolation adjustment | .007992 |
| Interpolated factor | .389503 |
(5) Period is the life of one individual—(i) Factor. If the period described in § 1.664-3(a)(5) is the life of one individual, the factor that is used in determining the present value of the remainder interest for transfers for which the valuation date is on or after June 1, 2023, is the factor obtained through the use of the formula in Figure 1 to this paragraph (e)(5)(i) to at least five decimal places. The prescribed mortality table is Table 2010CM as set forth in § 20.2031-7(d)(7)(ii) of this chapter, or for periods before June 1, 2023, the appropriate table found in § 20.2031-7A of this chapter. Table 2010CM is referenced by IRS Publication 1458, Actuarial Values Version 4B. The mortality tables prescribed for periods before June 1, 2023, are referenced by prior versions of IRS Publication 1458. Alternatively, the remainder factors have been determined for the convenience of taxpayers and appear in Table U(1) under the appropriate adjusted payout rate. Table U(1) currently is available, at no charge, electronically via the IRS website at https://www.irs.gov/retirement-plans/actuarial-tables (or a corresponding URL as may be updated from time to time). Table U(1) is referenced and explained by IRS Publication 1458, Actuarial Valuations Version 4B, which will be available within a reasonable time after June 1, 2023. For purposes of the computations described in this paragraph (e)(5), the age of an individual is the age of that individual at the individual’s nearest birthday. If the adjusted payout rate is an amount that is between adjusted payout rates for which factors are provided in the appropriate table, an exact method of obtaining the applicable remainder factors (such as through software using the actual adjusted payout rate and the actuarial formula in this paragraph (e)(5)) or a linear interpolation must be used, provided whichever method used is applied consistently in valuing all interests in the same property. The applicable remainder factors derived by an exact method or by interpolation must be expressed to at least five decimal places. The present value of the remainder interest is determined by multiplying the net fair market value (as of the valuation date as determined in § 1.664-4(e)(4)) of the property placed in trust by the factor determined under this paragraph (e)(5). If the adjusted payout rate is from 0.2 to 20.0 percent, inclusive, taxpayers may see the actuarial tables referenced and explained by IRS Publication 1458, Actuarial Valuations Version 4B. Alternatively, the Commissioner may supply a factor upon a request for a ruling. See paragraph (b) of this section.
(ii) Sample factors from actuarial Table U(1). For purposes of the example in paragraph (e)(5)(iii) of this section, the following factors from Table U(1) and Table F(3.2) (see paragraph (e)(6)(ii) of this section) will be used:
Table 2 to Paragraph
Factors From Table U(1)—Based on Table 2010CM
| Adjusted payout rate | |||
|---|---|---|---|
| Age | 4.8% | 5.0% | 5.2% |
| 77 | 0.61491 | 0.60343 | 0.59223 |
| # of Months from Annual Valuation to First Payout | Adjustment Factors for Payments at End of Period | ||
| At Least | But Less Than | Annual | Semiannual |
| 6 | 7 | 0.984374 | 0.976683 |
(iii) Example of interpolation. After June 1, 2023, A, whose age is 76 years and 11 months, transfers $100,000 to a charitable remainder unitrust on January 1st. The trust instrument requires that the trust pay to A semiannually (on June 30 and December 31) 5 percent of the fair market value of the trust assets as of January 1st during A’s life. The section 7520 rate for January is 3.2 percent. Under Table F(3.2), the appropriate adjustment factor is 0.976683 for semiannual payments payable at the end of the semiannual period. The adjusted payout rate is 4.883% (5% × 0.976683). Based on interpolating between the remainder factors in Table U(1), the present value of the remainder interest is $61,015, computed as illustrated in Figure 2 to this paragraph (e)(5)(iii).
(6) Actuarial Table D and Tables F(0.2) through F(20.0) for transfers for which the valuation date is on or after May 1, 1989—(i) Remainder factors for charitable remainder unitrusts. For transfers for which the valuation date is on or after May 1, 1989, the present value of a charitable remainder unitrust interest that is dependent upon a term of years is determined by using the formula in Figure 3 to this paragraph (e)(6)(i) and calculating the final result to at least six decimal places. For the convenience of taxpayers, actuarial factors have been computed by the IRS and appear in Table D. Table D can be found on the IRS website at https://www.irs.gov/retirement-plans/actuarial-tables (or a corresponding URL as may be updated from time to time). Table D is referenced and explained in IRS Publication 1458, Actuarial Valuations Version 4B, which will be available within a reasonable time after June 1, 2023. The remainder factors from Table D also can be found in paragraph (e)(6)(iii) of this section, but only for adjusted payout rates from 4.2 to 14 percent, inclusive. For transfers for which the valuation date is on or after June 1, 2023, where the present value of a charitable remainder unitrust interest is dependent on the termination of a life interest, see paragraph (e)(5) of this section. See, however, § 1.7520-3(b) (relating to exceptions to the use of prescribed tables under certain circumstances).
(ii) Unitrust payout rate adjustment factors. For transfers for which the valuation date is on or after May 1, 1989, the unitrust payout rate adjustment factors are determined by using the formula in Figure 4 to this paragraph (e)(6)(ii) and calculating the final result to at least six decimal places. For the convenience of taxpayers, actuarial factors have been computed by the IRS, for interest rates from 0.2 to 20 percent, inclusive, and appear in Tables F(0.2) through F(20.0). Tables F(0.2) through F(20.0) can be found on the IRS website at https://www.irs.gov/retirement-plans/actuarial-tables (or a corresponding URL as may be updated from time to time). Tables F(0.2) through F(20.0) are referenced and explained in IRS Publication 1458, Actuarial Valuations Version 4B, which will be available within a reasonable time after June 1, 2023. The factors from Table F also can be found in paragraph (e)(6)(iii) of this section, but only for interest rates from 4.2 to 14 percent, inclusive.
(iii) Table D and Tables F(4.2) through F(14.0). The unitrust remainder factors from Table D, for interest rates from 4.2 to 14 percent, inclusive, and the unitrust payout factors from Tables F(4.2) through F(14.0) are as follows:
Table D—Showing the Present Worth of a Remainder Interest Postponed for a Term Certain in a Charitable Remainder Unitrust
[Applicable after April 30, 1989]
| Years | Adjusted payout rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 4.2% | 4.4% | 4.6% | 4.8% | 5.0% | 5.2% | 5.4% | 5.6% | 5.8% | 6.0% | |
| 1 | .958000 | .956000 | .954000 | .952000 | .950000 | .948000 | .946000 | .944000 | .942000 | .940000 |
| 2 | .917764 | .913936 | .910116 | .906304 | .902500 | .898704 | .894916 | .891136 | .887364 | .883600 |
| 3 | .879218 | .873723 | .868251 | .862801 | .857375 | .851971 | .846591 | .841232 | .835897 | .830584 |
| 4 | .842291 | .835279 | .828311 | .821387 | .814506 | .807669 | .800875 | .794123 | .787415 | .780749 |
| 5 | .806915 | .798527 | .790209 | .781960 | .773781 | .765670 | .757627 | .749652 | .741745 | .733904 |
| 6 | .773024 | .763392 | .753859 | .744426 | .735092 | .725855 | .716716 | .707672 | .698724 | .689870 |
| 7 | .740557 | .729802 | .719182 | .708694 | .698337 | .688111 | .678013 | .668042 | .658198 | .648478 |
| 8 | .709454 | .697691 | .686099 | .674677 | .663420 | .652329 | .641400 | .630632 | .620022 | .609569 |
| 9 | .679657 | .666993 | .654539 | .642292 | .630249 | .618408 | .606765 | .595317 | .584061 | .572995 |
| 10 | .651111 | .637645 | .624430 | .611462 | .598737 | .586251 | .573999 | .561979 | .550185 | .538615 |
| 11 | .623764 | .609589 | .595706 | .582112 | .568800 | .555766 | .543003 | .530508 | .518275 | .506298 |
| 12 | .597566 | .582767 | .568304 | .554170 | .540360 | .526866 | .513681 | .500800 | .488215 | .475920 |
| 13 | .572469 | .557125 | .542162 | .527570 | .513342 | .499469 | .485942 | .472755 | .459898 | .447365 |
| 14 | .548425 | .532611 | .517222 | .502247 | .487675 | .473496 | .459701 | .446281 | .433224 | .420523 |
| 15 | .525391 | .509177 | .493430 | .478139 | .463291 | .448875 | .434878 | .421289 | .408097 | .395292 |
| 16 | .503325 | .486773 | .470732 | .455188 | .440127 | .425533 | .411394 | .397697 | .384427 | .371574 |
| 17 | .482185 | .465355 | .449079 | .433339 | .418120 | .403405 | .389179 | .375426 | .362131 | .349280 |
| 18 | .461933 | .444879 | .428421 | .412539 | .397214 | .382428 | .368163 | .354402 | .341127 | .328323 |
| 19 | .442532 | .425304 | .408714 | .392737 | .377354 | .362542 | .348282 | .334555 | .321342 | .308624 |
| 20 | .423946 | .406591 | .389913 | .373886 | .358486 | .343690 | .329475 | .315820 | .302704 | .290106 |
Table D—Showing the Present Worth of a Remainder Interest Postponed for a Term Certain in a Charitable Remainder Unitrust
[Applicable after April 30, 1989]
| Years | Adjusted payout rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 6.2% | 6.4% | 6.6% | 6.8% | 7.0% | 7.2% | 7.4% | 7.6% | 7.8% | 8.0% | |
| 1 | .938000 | .936000 | .934000 | .932000 | .930000 | .928000 | .926000 | .924000 | .922000 | .920000 |
| 2 | .879844 | .876096 | .872356 | .868624 | .864900 | .861184 | .857476 | .853776 | .850084 | .846400 |
| 3 | .825294 | .820026 | .814781 | .809558 | .804357 | .799179 | .794023 | .788889 | .783777 | .778688 |
| 4 | .774125 | .767544 | .761005 | .754508 | .748052 | .741638 | .735265 | .728933 | .722643 | .716393 |
| 5 | .726130 | .718421 | .710779 | .703201 | .695688 | .688240 | .680855 | .673535 | .666277 | .659082 |
| 6 | .681110 | .672442 | .663867 | .655383 | .646990 | .638687 | .630472 | .622346 | .614307 | .606355 |
| 7 | .638881 | .629406 | .620052 | .610817 | .601701 | .592701 | .583817 | .575048 | .566391 | .557847 |
| 8 | .599270 | .589124 | .579129 | .569282 | .559582 | .550027 | .540615 | .531344 | .522213 | .513219 |
| 9 | .562115 | .551420 | .540906 | .530571 | .520411 | .510425 | .500609 | .490962 | .481480 | .472161 |
| 10 | .527264 | .516129 | .505206 | .494492 | .483982 | .473674 | .463564 | .453649 | .443925 | .434388 |
| 11 | .494574 | .483097 | .471863 | .460866 | .450104 | .439570 | .429260 | .419171 | .409298 | .399637 |
| 12 | .463910 | .452179 | .440720 | .429527 | .418596 | .407921 | .397495 | .387314 | .377373 | .367666 |
| 13 | .435148 | .423239 | .411632 | .400320 | .389295 | .378550 | .368081 | .357879 | .347938 | .338253 |
| 14 | .408169 | .396152 | .384465 | .373098 | .362044 | .351295 | .340843 | .330680 | .320799 | .311193 |
| 15 | .382862 | .370798 | .359090 | .347727 | .336701 | .326002 | .315620 | .305548 | .295777 | .286297 |
| 16 | .359125 | .347067 | .335390 | .324082 | .313132 | .302529 | .292264 | .282326 | .272706 | .263394 |
| 17 | .336859 | .324855 | .313254 | .302044 | .291213 | .280747 | .270637 | .260870 | .251435 | .242322 |
| 18 | .315974 | .304064 | .292579 | .281505 | .270828 | .260533 | .250610 | .241044 | .231823 | .222936 |
| 19 | .296383 | .284604 | .273269 | .262363 | .251870 | .241775 | .232065 | .222724 | .213741 | .205101 |
| 20 | .278008 | .266389 | .255233 | .244522 | .234239 | .224367 | .214892 | .205797 | .197069 | .188693 |
Table D—Showing the Present Worth of a Remainder Interest Postponed for a Term Certain in a Charitable Remainder Unitrust
[Applicable after April 30, 1989]
| Years | Adjusted payout rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 8.2% | 8.4% | 8.6% | 8.8% | 9.0% | 9.2% | 9.4% | 9.6% | 9.8% | 10.0% | |
| 1 | .918000 | .916000 | .914000 | .912000 | .910000 | .908000 | .906000 | .904000 | .902000 | .900000 |
| 2 | .842724 | .839056 | .835396 | .831744 | .828100 | .824464 | .820836 | .817216 | .813604 | .810000 |
| 3 | .773621 | .768575 | .763552 | .758551 | .753571 | .748613 | .743677 | .738763 | .733871 | .729000 |
| 4 | .710184 | .704015 | .697886 | .691798 | .685750 | .679741 | .673772 | .667842 | .661951 | .656100 |
| 5 | .651949 | .644878 | .637868 | .630920 | .624032 | .617205 | .610437 | .603729 | .597080 | .590490 |
| 6 | .598489 | .590708 | .583012 | .575399 | .567869 | .560422 | .553056 | .545771 | .538566 | .531441 |
| 7 | .549413 | .541089 | .532873 | .524764 | .516761 | .508863 | .501069 | .493377 | .485787 | .478297 |
| 8 | .504361 | .495637 | .487046 | .478585 | .470253 | .462048 | .453968 | .446013 | .438180 | .430467 |
| 9 | .463003 | .454004 | .445160 | .436469 | .427930 | .419539 | .411295 | .403196 | .395238 | .387420 |
| 10 | .425037 | .415867 | .406876 | .398060 | .389416 | .380942 | .372634 | .364489 | .356505 | .348678 |
| 11 | .390184 | .380934 | .371885 | .363031 | .354369 | .345895 | .337606 | .329498 | .321567 | .313811 |
| 12 | .358189 | .348936 | .339902 | .331084 | .322475 | .314073 | .305871 | .297866 | .290054 | .282430 |
| 13 | .328817 | .319625 | .310671 | .301949 | .293453 | .285178 | .277119 | .269271 | .261628 | .254187 |
| 14 | .301854 | .292777 | .283953 | .275377 | .267042 | .258942 | .251070 | .243421 | .235989 | .228768 |
| 15 | .277102 | .268184 | .259533 | .251144 | .243008 | .235119 | .227469 | .220053 | .212862 | .205891 |
| 16 | .254380 | .245656 | .237213 | .229043 | .221137 | .213488 | .206087 | .198928 | .192001 | .185302 |
| 17 | .233521 | .225021 | .216813 | .208887 | .201235 | .193847 | .186715 | .179830 | .173185 | .166772 |
| 18 | .214372 | .206119 | .198167 | .190505 | .183124 | .176013 | .169164 | .162567 | .156213 | .150095 |
| 19 | .196794 | .188805 | .181125 | .173741 | .166643 | .159820 | .153262 | .146960 | .140904 | .135085 |
| 20 | .180657 | .172946 | .165548 | .158452 | .151645 | .145117 | .138856 | .132852 | .127096 | .121577 |
Table D—Showing the Present Worth of a Remainder Interest Postponed for a Term Certain in a Charitable Remainder Unitrust
[Applicable after April 30, 1989]
| Years | Adjusted payout rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 10.2% | 10.4% | 10.6% | 10.8% | 11.0% | 11.2% | 11.4% | 11.6% | 11.8% | 12.0% | |
| 1 | .898000 | .896000 | .894000 | .892000 | .890000 | .888000 | .886000 | .884000 | .882000 | .880000 |
| 2 | .806404 | .802816 | .799236 | .795664 | .792100 | .788544 | .784996 | .781456 | .777924 | .774400 |
| 3 | .724151 | .719323 | .714517 | .709732 | .704969 | .700227 | .695506 | .690807 | .686129 | .681472 |
| 4 | .650287 | .644514 | .638778 | .633081 | .627422 | .621802 | .616219 | .610673 | .605166 | .599695 |
| 5 | .583958 | .577484 | .571068 | .564708 | .558406 | .552160 | .545970 | .539835 | .533756 | .527732 |
| 6 | .524394 | .517426 | .510535 | .503720 | .496981 | .490318 | .483729 | .477214 | .470773 | .464404 |
| 7 | .470906 | .463613 | .456418 | .449318 | .442313 | .435402 | .428584 | .421858 | .415222 | .408676 |
| 8 | .422874 | .415398 | .408038 | .400792 | .393659 | .386637 | .379726 | .372922 | .366226 | .359635 |
| 9 | .379741 | .372196 | .364786 | .357506 | .350356 | .343334 | .336437 | .329663 | .323011 | .316478 |
| 10 | .341007 | .333488 | .326118 | .318896 | .311817 | .304881 | .298083 | .291422 | .284896 | .278501 |
| 11 | .306224 | .298805 | .291550 | .284455 | .277517 | .270734 | .264102 | .257617 | .251278 | .245081 |
| 12 | .274989 | .267729 | .260645 | .253734 | .246990 | .240412 | .233994 | .227734 | .221627 | .215671 |
| 13 | .246941 | .239886 | .233017 | .226331 | .219821 | .213486 | .207319 | .201317 | .195475 | .189791 |
| 14 | .221753 | .214937 | .208317 | .201887 | .195641 | .189575 | .183684 | .177964 | .172409 | .167016 |
| 15 | .199134 | .192584 | .186236 | .180083 | .174121 | .168343 | .162744 | .157320 | .152065 | .146974 |
| 16 | .178822 | .172555 | .166495 | .160634 | .154967 | .149488 | .144191 | .139071 | .134121 | .129337 |
| 17 | .160582 | .154609 | .148846 | .143286 | .137921 | .132746 | .127754 | .122939 | .118295 | .113817 |
| 18 | .144203 | .138530 | .133069 | .127811 | .122750 | .117878 | .113190 | .108678 | .104336 | .100159 |
| 19 | .129494 | .124123 | .118963 | .114007 | .109247 | .104676 | .100286 | .096071 | .092024 | .088140 |
| 20 | .116286 | .111214 | .106353 | .101694 | .097230 | .092952 | .088853 | .084927 | .081166 | .077563 |
Table D—Showing the Present Worth of a Remainder Interest Postponed for a Term Certain in a Charitable Remainder Unitrust
[Applicable after April 30, 1989]
| Years | Adjusted payout rate | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 12.2% | 12.4% | 12.6% | 12.8% | 13.0% | 13.2% | 13.4% | 13.6% | 13.8% | 14.0% | |
| 1 | .878000 | .876000 | .874000 | .872000 | .870000 | .868000 | .866000 | .864000 | .862000 | .860000 |
| 2 | .770884 | .767376 | .763876 | .760384 | .756900 | .753424 | .749956 | .746496 | .743044 | .739600 |
| 3 | .676836 | .672221 | .667628 | .663055 | .658503 | .653972 | .649462 | .644973 | .640504 | .636056 |
| 4 | .594262 | .588866 | .583507 | .578184 | .572898 | .567648 | .562434 | .557256 | .552114 | .547008 |
| 5 | .521762 | .515847 | .509985 | .504176 | .498421 | .492718 | .487068 | .481469 | .475923 | .470427 |
| 6 | .458107 | .451882 | .445727 | .439642 | .433626 | .427679 | .421801 | .415990 | .410245 | .404567 |
| 7 | .402218 | .395848 | .389565 | .383368 | .377255 | .371226 | .365279 | .359415 | .353631 | .347928 |
| 8 | .353147 | .346763 | .340480 | .334297 | .328212 | .322224 | .316332 | .310535 | .304830 | .299218 |
| 9 | .310063 | .303764 | .297579 | .291507 | .285544 | .279690 | .273944 | .268302 | .262764 | .257327 |
| 10 | .272236 | .266098 | .260084 | .254194 | .248423 | .242771 | .237235 | .231813 | .226502 | .221302 |
| 11 | .239023 | .233102 | .227314 | .221657 | .216128 | .210725 | .205446 | .200286 | .195245 | .190319 |
| 12 | .209862 | .204197 | .198672 | .193285 | .188032 | .182910 | .177916 | .173047 | .168301 | .163675 |
| 13 | .184259 | .178877 | .173640 | .168544 | .163588 | .158766 | .154075 | .149513 | .145076 | .140760 |
| 14 | .161779 | .156696 | .151761 | .146971 | .142321 | .137809 | .133429 | .129179 | .125055 | .121054 |
| 15 | .142042 | .137266 | .132639 | .128158 | .123819 | .119618 | .115550 | .111611 | .107798 | .104106 |
| 16 | .124713 | .120245 | .115927 | .111754 | .107723 | .103828 | .100066 | .096432 | .092922 | .089531 |
| 17 | .109498 | .105334 | .101320 | .097450 | .093719 | .090123 | .086657 | .083317 | .080098 | .076997 |
| 18 | .096139 | .092273 | .088554 | .084976 | .081535 | .078227 | .075045 | .071986 | .069045 | .066217 |
| 19 | .084410 | .080831 | .077396 | .074099 | .070936 | .067901 | .064989 | .062196 | .059517 | .056947 |
| 20 | .074112 | .070808 | .067644 | .064614 | .061714 | .058938 | .056280 | .053737 | .051303 | .048974 |
Table F(4.2)—With Interest at 4.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .989820 | .984755 | .981389 | |
| 1 | 2 | .996577 | .986432 | .981385 | .978030 |
| 2 | 3 | .993166 | .983056 | .978026 | |
| 3 | 4 | .989767 | .979691 | .974679 | |
| 4 | 5 | .986380 | .976338 | ||
| 5 | 6 | .983004 | .972996 | ||
| 6 | 7 | .979639 | .969666 | ||
| 7 | 8 | .976286 | |||
| 8 | 9 | .972945 | |||
| 9 | 10 | .969615 | |||
| 10 | 11 | .966296 | |||
| 11 | 12 | .962989 | |||
| 12 | .959693 | ||||
Table F(4.4)—With Interest at 4.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .989350 | .984054 | .980533 | |
| 1 | 2 | .996418 | .985806 | .980529 | .977021 |
| 2 | 3 | .992849 | .982275 | .977017 | |
| 3 | 4 | .989293 | .978757 | .973517 | |
| 4 | 5 | .985749 | .975251 | ||
| 5 | 6 | .982219 | .971758 | ||
| 6 | 7 | .978700 | .968277 | ||
| 7 | 8 | .975195 | |||
| 8 | 9 | .971702 | |||
| 9 | 10 | .968221 | |||
| 10 | 11 | .964753 | |||
| 11 | 12 | .961298 | |||
| 12 | .957854 | ||||
Table F(4.6)—With Interest at 4.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .988882 | .983354 | .979680 | |
| 1 | 2 | .996259 | .985183 | .979676 | .976015 |
| 2 | 3 | .992532 | .981498 | .976011 | |
| 3 | 4 | .988820 | .977826 | .972360 | |
| 4 | 5 | .985121 | .974168 | ||
| 5 | 6 | .981436 | .970524 | ||
| 6 | 7 | .977764 | .966894 | ||
| 7 | 8 | .974107 | |||
| 8 | 9 | .970463 | |||
| 9 | 10 | .966832 | |||
| 10 | 11 | .963216 | |||
| 11 | 12 | .959613 | |||
| 12 | .956023 | ||||
Table F(4.8)—With Interest at 4.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .988415 | .982657 | .978830 | |
| 1 | 2 | .996101 | .984561 | .978825 | .975013 |
| 2 | 3 | .992217 | .980722 | .975008 | |
| 3 | 4 | .988348 | .976898 | .971206 | |
| 4 | 5 | .984494 | .973089 | ||
| 5 | 6 | .980655 | .969294 | ||
| 6 | 7 | .976831 | .965515 | ||
| 7 | 8 | .973022 | |||
| 8 | 9 | .969228 | |||
| 9 | 10 | .965448 | |||
| 10 | 11 | .961684 | |||
| 11 | 12 | .957934 | |||
| 12 | .954198 | ||||
Table F(5.0)—With Interest at 5.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .987950 | .981961 | .977982 | |
| 1 | 2 | .995942 | .983941 | .977977 | .974014 |
| 2 | 3 | .991901 | .979949 | .974009 | |
| 3 | 4 | .987877 | .975973 | .970057 | |
| 4 | 5 | .983868 | .972013 | ||
| 5 | 6 | .979876 | .968069 | ||
| 6 | 7 | .975900 | .964141 | ||
| 7 | 8 | .971940 | |||
| 8 | 9 | .967997 | |||
| 9 | 10 | .964069 | |||
| 10 | 11 | .960157 | |||
| 11 | 12 | .956261 | |||
| 12 | .952381 | ||||
Table F(5.2)—With Interest at 5.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .987486 | .981268 | .977137 | |
| 1 | 2 | .995784 | .983323 | .977132 | .973018 |
| 2 | 3 | .991587 | .979178 | .973012 | |
| 3 | 4 | .987407 | .975050 | .968911 | |
| 4 | 5 | .983244 | .970940 | ||
| 5 | 6 | .979099 | .966847 | ||
| 6 | 7 | .974972 | .962771 | ||
| 7 | 8 | .970862 | |||
| 8 | 9 | .966769 | |||
| 9 | 10 | .962694 | |||
| 10 | 11 | .958636 | |||
| 11 | 12 | .954594 | |||
| 12 | .950570 | ||||
Table F(5.4)—With Interest at 5.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .987023 | .980577 | .976295 | |
| 1 | 2 | .995627 | .982707 | .976289 | .972026 |
| 2 | 3 | .991273 | .978409 | .972019 | |
| 3 | 4 | .986938 | .974131 | .967769 | |
| 4 | 5 | .982622 | .969871 | ||
| 5 | 6 | .978325 | .965629 | ||
| 6 | 7 | .974047 | .961407 | ||
| 7 | 8 | .969787 | |||
| 8 | 9 | .965546 | |||
| 9 | 10 | .961323 | |||
| 10 | 11 | .957119 | |||
| 11 | 12 | .952934 | |||
| 12 | .948767 | ||||
Table F(5.6)—With Interest at 5.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .986562 | .979888 | .975455 | |
| 1 | 2 | .995470 | .982092 | .975449 | .971036 |
| 2 | 3 | .990960 | .977643 | .971029 | |
| 3 | 4 | .986470 | .973214 | .966630 | |
| 4 | 5 | .982001 | .968805 | ||
| 5 | 6 | .977552 | .964416 | ||
| 6 | 7 | .973124 | .960047 | ||
| 7 | 8 | .968715 | |||
| 8 | 9 | .964326 | |||
| 9 | 10 | .959958 | |||
| 10 | 11 | .955609 | |||
| 11 | 12 | .951279 | |||
| 12 | .946970 | ||||
Table F(5.8)—With Interest at 5.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .986102 | .979201 | .974618 | |
| 1 | 2 | .995313 | .981480 | .974611 | .970050 |
| 2 | 3 | .990647 | .976879 | .970043 | |
| 3 | 4 | .986004 | .972300 | .965496 | |
| 4 | 5 | .981382 | .967743 | ||
| 5 | 6 | .976782 | .963206 | ||
| 6 | 7 | .972203 | .958692 | ||
| 7 | 8 | .967646 | |||
| 8 | 9 | .963111 | |||
| 9 | 10 | .958596 | |||
| 10 | 11 | .954103 | |||
| 11 | 12 | .949631 | |||
| 12 | .945180 | ||||
Table F(6.0)—With Interest at 6.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .985643 | .978516 | .973784 | |
| 1 | 2 | .995156 | .980869 | .973776 | .969067 |
| 2 | 3 | .990336 | .976117 | .969059 | |
| 3 | 4 | .985538 | .971389 | .964365 | |
| 4 | 5 | .980764 | .966684 | ||
| 5 | 6 | .976014 | .962001 | ||
| 6 | 7 | .971286 | .957341 | ||
| 7 | 8 | .966581 | |||
| 8 | 9 | .961899 | |||
| 9 | 10 | .957239 | |||
| 10 | 11 | .952603 | |||
| 11 | 12 | .947988 | |||
| 12 | .943396 | ||||
Table F(6.2)—With Interest at 6.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .985185 | .977833 | .972952 | |
| 1 | 2 | .995000 | .980259 | .972944 | .968087 |
| 2 | 3 | .990024 | .975358 | .968079 | |
| 3 | 4 | .985074 | .970481 | .963238 | |
| 4 | 5 | .980148 | .965628 | ||
| 5 | 6 | .975247 | .960799 | ||
| 6 | 7 | .970371 | .955995 | ||
| 7 | 8 | .965519 | |||
| 8 | 9 | .960691 | |||
| 9 | 10 | .955887 | |||
| 10 | 11 | .951107 | |||
| 11 | 12 | .946352 | |||
| 12 | .941620 | ||||
Table F(6.4)—With Interest at 6.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .984729 | .977152 | .972122 | |
| 1 | 2 | .994844 | .979652 | .972114 | .967110 |
| 2 | 3 | .989714 | .974600 | .967101 | |
| 3 | 4 | .984611 | .969575 | .962115 | |
| 4 | 5 | .979534 | .964576 | ||
| 5 | 6 | .974483 | .959602 | ||
| 6 | 7 | .969458 | .954654 | ||
| 7 | 8 | .964460 | |||
| 8 | 9 | .959487 | |||
| 9 | 10 | .954539 | |||
| 10 | 11 | .949617 | |||
| 11 | 12 | .944721 | |||
| 12 | .939850 | ||||
Table F(6.6)—With Interest at 6.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .984274 | .976473 | .971295 | |
| 1 | 2 | .994688 | .979046 | .971286 | .966136 |
| 2 | 3 | .989404 | .973845 | .966127 | |
| 3 | 4 | .984149 | .968672 | .960995 | |
| 4 | 5 | .978921 | .963527 | ||
| 5 | 6 | .973721 | .958408 | ||
| 6 | 7 | .968549 | .953317 | ||
| 7 | 8 | .963404 | |||
| 8 | 9 | .958286 | |||
| 9 | 10 | .953196 | |||
| 10 | 11 | .948132 | |||
| 11 | 12 | .943096 | |||
| 12 | .938086 | ||||
Table F(6.8)—With Interest at 6.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .983821 | .975796 | .970471 | |
| 1 | 2 | .994533 | .978442 | .970461 | .965165 |
| 2 | 3 | .989095 | .973092 | .965156 | |
| 3 | 4 | .983688 | .967772 | .959879 | |
| 4 | 5 | .978309 | .962481 | ||
| 5 | 6 | .972961 | .957219 | ||
| 6 | 7 | .967641 | .951985 | ||
| 7 | 8 | .962351 | |||
| 8 | 9 | .957089 | |||
| 9 | 10 | .951857 | |||
| 10 | 11 | .946653 | |||
| 11 | 12 | .941477 | |||
| 12 | .936330 | ||||
Table F(7.0)—With Interest at 7.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .983368 | .975122 | .969649 | |
| 1 | 2 | .994378 | .977839 | .969639 | .964198 |
| 2 | 3 | .988787 | .972342 | .964187 | |
| 3 | 4 | .983228 | .966875 | .958766 | |
| 4 | 5 | .977700 | .961439 | ||
| 5 | 6 | .972203 | .956033 | ||
| 6 | 7 | .966736 | .950658 | ||
| 7 | 8 | .961301 | |||
| 8 | 9 | .955896 | |||
| 9 | 10 | .950522 | |||
| 10 | 11 | .945178 | |||
| 11 | 12 | .939864 | |||
| 12 | .934579 | ||||
Table F(7.2)—With Interest at 7.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .982917 | .974449 | .968830 | |
| 1 | 2 | .994223 | .977239 | .968819 | .963233 |
| 2 | 3 | .988479 | .971593 | .963222 | |
| 3 | 4 | .982769 | .965980 | .957658 | |
| 4 | 5 | .977091 | .960400 | ||
| 5 | 6 | .971446 | .954851 | ||
| 6 | 7 | .965834 | .949335 | ||
| 7 | 8 | .960255 | |||
| 8 | 9 | .954707 | |||
| 9 | 10 | .949192 | |||
| 10 | 11 | .943708 | |||
| 11 | 12 | .938256 | |||
| 12 | .932836 | ||||
Table F(7.4)—With Interest at 7.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .982467 | .973778 | .968013 | |
| 1 | 2 | .994068 | .976640 | .968002 | .962271 |
| 2 | 3 | .988172 | .970847 | .962260 | |
| 3 | 4 | .982311 | .965088 | .956552 | |
| 4 | 5 | .976484 | .959364 | ||
| 5 | 6 | .970692 | .953673 | ||
| 6 | 7 | .964935 | .948017 | ||
| 7 | 8 | .959211 | |||
| 8 | 9 | .953521 | |||
| 9 | 10 | .947866 | |||
| 10 | 11 | .942243 | |||
| 11 | 12 | .936654 | |||
| 12 | .931099 | ||||
Table F(7.6)—With Interest at 7.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .982019 | .973109 | .967199 | |
| 1 | 2 | .993914 | .976042 | .967187 | .961313 |
| 2 | 3 | .987866 | .970103 | .961301 | |
| 3 | 4 | .981854 | .964199 | .955451 | |
| 4 | 5 | .975879 | .958331 | ||
| 5 | 6 | .969940 | .952499 | ||
| 6 | 7 | .964037 | .946703 | ||
| 7 | 8 | .958171 | |||
| 8 | 9 | .952340 | |||
| 9 | 10 | .946544 | |||
| 10 | 11 | .940784 | |||
| 11 | 12 | .935058 | |||
| 12 | .929368 | ||||
Table F(7.8)—With Interest at 7.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.0000000 | .981571 | .972442 | .966387 | |
| 1 | 2 | .993761 | .975447 | .966374 | .960357 |
| 2 | 3 | .987560 | .969361 | .960345 | |
| 3 | 4 | .981398 | .963312 | .954353 | |
| 4 | 5 | .975275 | .957302 | ||
| 5 | 6 | .969190 | .951329 | ||
| 6 | 7 | .963143 | .945393 | ||
| 7 | 8 | .957133 | |||
| 8 | 9 | .951161 | |||
| 9 | 10 | .945227 | |||
| 10 | 11 | .939329 | |||
| 11 | 12 | .933468 | |||
| 12 | .927644 | ||||
Table F(8.0)—With Interest at 8.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .981125 | .971777 | .965578 | |
| 1 | 2 | .993607 | .974853 | .965564 | .959405 |
| 2 | 3 | .987255 | .968621 | .959392 | |
| 3 | 4 | 980944 | .962429 | .953258 | |
| 4 | 5 | .974673 | .956276 | ||
| 5 | 6 | .968442 | .950162 | ||
| 6 | 7 | .962250 | .944088 | ||
| 7 | 8 | .956099 | |||
| 8 | 9 | .949987 | |||
| 9 | 10 | .943913 | |||
| 10 | 11 | .937879 | |||
| 11 | 12 | .931883 | |||
| 12 | .925926 | ||||
Table F(8.2)—With Interest at 8.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .980680 | .971114 | .964771 | |
| 1 | 2 | .993454 | .974261 | .964757 | .958455 |
| 2 | 3 | .986951 | .967883 | .958441 | |
| 3 | 4 | .980490 | .961547 | .952167 | |
| 4 | 5 | .974072 | .955253 | ||
| 5 | 6 | .967695 | .949000 | ||
| 6 | 7 | .961361 | .942788 | ||
| 7 | 8 | .955068 | |||
| 8 | 9 | .948816 | |||
| 9 | 10 | .942605 | |||
| 10 | 11 | .936434 | |||
| 11 | 12 | .930304 | |||
| 12 | .924214 | ||||
Table F(8.2)—With Interest at 8.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .980237 | .970453 | .963966 | |
| 1 | 2 | .993301 | .973670 | .963952 | .957509 |
| 2 | 3 | .986647 | .967148 | .957494 | |
| 3 | 4 | .980037 | .960669 | .951080 | |
| 4 | 5 | .973472 | .954233 | ||
| 5 | 6 | .966951 | .947841 | ||
| 6 | 7 | .960473 | .941491 | ||
| 7 | 8 | .954039 | |||
| 8 | 9 | .947648 | |||
| 9 | 10 | .941300 | |||
| 10 | 11 | .934994 | |||
| 11 | 12 | .928731 | |||
| 12 | .922509 | ||||
Table F(8.6)—With Interest at 8.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .979794 | .969794 | .963164 | |
| 1 | 2 | .993148 | .973081 | .963149 | .956565 |
| 2 | 3 | .986344 | .966414 | .956550 | |
| 3 | 4 | .979586 | .959793 | .949996 | |
| 4 | 5 | .972874 | .953217 | ||
| 5 | 6 | .966209 | .946686 | ||
| 6 | 7 | .959589 | .940199 | ||
| 7 | 8 | .953014 | |||
| 8 | 9 | .946484 | |||
| 9 | 10 | .940000 | |||
| 10 | 11 | .933559 | |||
| 11 | 12 | .927163 | |||
| 12 | .920810 | ||||
Table F(8.8)—With Interest at 8.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .979353 | .969136 | .962364 | |
| 1 | 2 | .992996 | .972494 | .962349 | .955624 |
| 2 | 3 | .986041 | .965683 | .955609 | |
| 3 | 4 | .979135 | .958919 | .948916 | |
| 4 | 5 | .972278 | .952203 | ||
| 5 | 6 | .965468 | .945534 | ||
| 6 | 7 | .958706 | .938912 | ||
| 7 | 8 | .951992 | |||
| 8 | 9 | .945324 | |||
| 9 | 10 | .938703 | |||
| 10 | 11 | .932129 | |||
| 11 | 12 | .925600 | |||
| 12 | .919118 | ||||
Table F(9.0)—With Interest at 9.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .978913 | .968481 | .961567 | |
| 1 | 2 | .992844 | .971908 | .961551 | .954686 |
| 2 | 3 | .985740 | .964954 | .954670 | |
| 3 | 4 | .978686 | .958049 | .947839 | |
| 4 | 5 | .971683 | .951193 | ||
| 5 | 6 | .964730 | .944387 | ||
| 6 | 7 | .957826 | .937629 | ||
| 7 | 8 | .950972 | |||
| 8 | 9 | .944167 | |||
| 9 | 10 | .937411 | |||
| 10 | 11 | .930703 | |||
| 11 | 12 | .924043 | |||
| 12 | .917431 | ||||
Table F(9.2)—With Interest at 9.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .978474 | .967827 | .960772 | |
| 1 | 2 | .992693 | .971324 | .960755 | .953752 |
| 2 | 3 | .985439 | .964226 | .953734 | |
| 3 | 4 | .978238 | .957180 | .946765 | |
| 4 | 5 | .971089 | .950186 | ||
| 5 | 6 | .963993 | .943242 | ||
| 6 | 7 | .956949 | .936350 | ||
| 7 | 8 | .949956 | |||
| 8 | 9 | .943014 | |||
| 9 | 10 | .936123 | |||
| 10 | 11 | .929283 | |||
| 11 | 12 | .922492 | |||
| 12 | .915751 | ||||
Table F(9.4)—With Interest at 9.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .978037 | .967176 | .959980 | |
| 1 | 2 | .992541 | .970742 | .959962 | .952820 |
| 2 | 3 | .985138 | .963501 | .952802 | |
| 3 | 4 | .977790 | .956315 | .945695 | |
| 4 | 5 | .970497 | .949182 | ||
| 5 | 6 | .963258 | .942102 | ||
| 6 | 7 | .956074 | .935075 | ||
| 7 | 8 | .948942 | |||
| 8 | 9 | .941865 | |||
| 9 | 10 | .934839 | |||
| 10 | 11 | .927867 | |||
| 11 | 12 | .920946 | |||
| 12 | .914077 | ||||
Table F(9.6)—With Interest at 9.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .977600 | .966526 | .959190 | |
| 1 | 2 | .992390 | .970161 | .959171 | .951890 |
| 2 | 3 | .984838 | .962778 | .951872 | |
| 3 | 4 | .977344 | .955452 | .944628 | |
| 4 | 5 | .969906 | .948181 | ||
| 5 | 6 | .962526 | .940965 | ||
| 6 | 7 | .955201 | .933805 | ||
| 7 | 8 | .947932 | |||
| 8 | 9 | .940718 | |||
| 9 | 10 | .933560 | |||
| 10 | 11 | .926455 | |||
| 11 | 12 | .919405 | |||
| 12 | .912409 | ||||
Table F(9.8)—With Interest at 9.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .977165 | .965878 | .958402 | |
| 1 | 2 | .992239 | .969582 | .958382 | .950964 |
| 2 | 3 | .984539 | .962057 | .950945 | |
| 3 | 4 | .976898 | .954591 | .943565 | |
| 4 | 5 | .969317 | .947183 | ||
| 5 | 6 | .961795 | .939832 | ||
| 6 | 7 | .954331 | .932539 | ||
| 7 | 8 | .946924 | |||
| 8 | 9 | .939576 | |||
| 9 | 10 | .932284 | |||
| 10 | 11 | .925049 | |||
| 11 | 12 | .917870 | |||
| 12 | .910747 | ||||
Table F(10.0)—With Interest at 10.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .976731 | .965232 | .957616 | |
| 1 | 2 | .992089 | .969004 | .957596 | .950041 |
| 2 | 3 | .984240 | .961338 | .950021 | |
| 3 | 4 | .976454 | .953733 | .942505 | |
| 4 | 5 | .968729 | .946188 | ||
| 5 | 6 | .961066 | .938703 | ||
| 6 | 7 | .953463 | .931277 | ||
| 7 | 8 | .945920 | |||
| 8 | 9 | .938436 | |||
| 9 | 10 | .931012 | |||
| 10 | 11 | .923647 | |||
| 11 | 12 | .916340 | |||
| 12 | .909091 | ||||
Table F(10.2)—With Interest at 10.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .976298 | .964588 | .956833 | |
| 1 | 2 | .991939 | .968428 | .956812 | .949120 |
| 2 | 3 | .983943 | .960622 | .949099 | |
| 3 | 4 | .976011 | .952878 | .941448 | |
| 4 | 5 | .968143 | .945196 | ||
| 5 | 6 | .960338 | .937577 | ||
| 6 | 7 | .952597 | .930019 | ||
| 7 | 8 | .944918 | |||
| 8 | 9 | .937301 | |||
| 9 | 10 | .929745 | |||
| 10 | 11 | .922250 | |||
| 11 | 12 | .914816 | |||
| 12 | .907441 | ||||
Table F(10.4)—With Interest at 10.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .975867 | .963946 | .956052 | |
| 1 | 2 | .991789 | .967854 | .956031 | .948202 |
| 2 | 3 | .983645 | .959907 | .948181 | |
| 3 | 4 | .975568 | .952025 | .940395 | |
| 4 | 5 | .967558 | .944208 | ||
| 5 | 6 | .959613 | .936455 | ||
| 6 | 7 | .951734 | .928765 | ||
| 7 | 8 | .943919 | |||
| 8 | 9 | .936168 | |||
| 9 | 10 | .928481 | |||
| 10 | 11 | .920858 | |||
| 11 | 12 | .913296 | |||
| 12 | .905797 | ||||
Table F(10.6)—With Interest at 10.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .975436 | .963305 | .955274 | |
| 1 | 2 | .991639 | .967281 | .955252 | .947287 |
| 2 | 3 | .983349 | .959194 | .947265 | |
| 3 | 4 | .975127 | .951174 | .939345 | |
| 4 | 5 | .966974 | .943222 | ||
| 5 | 6 | .958890 | .935336 | ||
| 6 | 7 | .950873 | .927516 | ||
| 7 | 8 | .942923 | |||
| 8 | 9 | .935039 | |||
| 9 | 10 | .927222 | |||
| 10 | 11 | .919470 | |||
| 11 | 12 | .911782 | |||
| 12 | .904159 | ||||
Table F(10.8)—With Interest at 10.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .975007 | .962667 | .954498 | |
| 1 | 2 | .991490 | .966710 | .954475 | .946375 |
| 2 | 3 | .983052 | .958483 | .946352 | |
| 3 | 4 | .974687 | .950327 | .938299 | |
| 4 | 5 | .966392 | .942239 | ||
| 5 | 6 | .958168 | .934221 | ||
| 6 | 7 | .950014 | .926271 | ||
| 7 | 8 | .941930 | |||
| 8 | 9 | .933914 | |||
| 9 | 10 | .925966 | |||
| 10 | 11 | .918086 | |||
| 11 | 12 | .910273 | |||
| 12 | .902527 | ||||
Table F(11.0)—With Interest at 11.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .974579 | .962030 | .953724 | |
| 1 | 2 | .991341 | .966140 | .953700 | .945466 |
| 2 | 3 | .982757 | .957774 | .945442 | |
| 3 | 4 | .974247 | .949481 | .937255 | |
| 4 | 5 | .965811 | .941260 | ||
| 5 | 6 | .957449 | .933109 | ||
| 6 | 7 | .949158 | .925029 | ||
| 7 | 8 | .940939 | |||
| 8 | 9 | .932792 | |||
| 9 | 10 | .924715 | |||
| 10 | 11 | .916708 | |||
| 11 | 12 | .908770 | |||
| 12 | .900901 | ||||
Table F(11.2)—With Interest at 11.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .974152 | .961395 | .952952 | |
| 1 | 2 | .991192 | .965572 | .952927 | .944559 |
| 2 | 3 | .982462 | .957068 | .944534 | |
| 3 | 4 | .973809 | .948638 | .936215 | |
| 4 | 5 | .965232 | .940283 | ||
| 5 | 6 | .956731 | .932001 | ||
| 6 | 7 | .948304 | .923792 | ||
| 7 | 8 | .939952 | |||
| 8 | 9 | .931673 | |||
| 9 | 10 | .923467 | |||
| 10 | 11 | .915333 | |||
| 11 | 12 | .907272 | |||
| 12 | .899281 | ||||
Table F(11.4)—With Interest at 11.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .973726 | .960762 | .952183 | |
| 1 | 2 | .991044 | .965005 | .952157 | .943655 |
| 2 | 3 | .982168 | .956363 | .943630 | |
| 3 | 4 | .973372 | .947798 | .935178 | |
| 4 | 5 | .964654 | .939309 | ||
| 5 | 6 | .956015 | .930896 | ||
| 6 | 7 | .947452 | .922559 | ||
| 7 | 8 | .938967 | |||
| 8 | 9 | .930557 | |||
| 9 | 10 | .922223 | |||
| 10 | 11 | .913964 | |||
| 11 | 12 | .905778 | |||
| 12 | .897666 | ||||
Table F(11.6)—With Interest at 11.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .973302 | .960130 | .951416 | |
| 1 | 2 | .990896 | .964440 | .951389 | .942754 |
| 2 | 3 | .981874 | .955660 | .942728 | |
| 3 | 4 | .972935 | .946959 | .934145 | |
| 4 | 5 | .964077 | .938338 | ||
| 5 | 6 | .955300 | .929795 | ||
| 6 | 7 | .946603 | .921330 | ||
| 7 | 8 | .937985 | |||
| 8 | 9 | .929445 | |||
| 9 | 10 | .920984 | |||
| 10 | 11 | .912599 | |||
| 11 | 12 | .904290 | |||
| 12 | .896057 | ||||
Table F(11.8)—With Interest at 11.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .972878 | .959501 | .950651 | |
| 1 | 2 | .990748 | .963877 | .950624 | .941855 |
| 2 | 3 | .981582 | .954959 | .941828 | |
| 3 | 4 | .972500 | .946124 | .933114 | |
| 4 | 5 | .963502 | .937370 | ||
| 5 | 6 | .954588 | .928698 | ||
| 6 | 7 | .945756 | .920105 | ||
| 7 | 8 | .937006 | |||
| 8 | 9 | .928337 | |||
| 9 | 10 | .919748 | |||
| 10 | 11 | .911238 | |||
| 11 | 12 | .902807 | |||
| 12 | .894454 | ||||
Table F(12.0)—With Interest at 12.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .972456 | .958873 | .949888 | |
| 1 | 2 | .990600 | .963315 | .949860 | .940960 |
| 2 | 3 | .981289 | .954260 | .940932 | |
| 3 | 4 | .972065 | .945290 | .932087 | |
| 4 | 5 | .962928 | .936405 | ||
| 5 | 6 | .953877 | .927603 | ||
| 6 | 7 | .944911 | .918884 | ||
| 7 | 8 | .936029 | |||
| 8 | 9 | .927231 | |||
| 9 | 10 | .918515 | |||
| 10 | 11 | .909882 | |||
| 11 | 12 | .901329 | |||
| 12 | .892857 | ||||
Table F(12.2)—With Interest at 12.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .972034 | .958247 | .949128 | |
| 1 | 2 | .990453 | .962754 | .949099 | .940067 |
| 2 | 3 | .980997 | .953563 | .940038 | |
| 3 | 4 | .971632 | .944460 | .931063 | |
| 4 | 5 | .962356 | .935443 | ||
| 5 | 6 | .953168 | .926512 | ||
| 6 | 7 | .944069 | .917667 | ||
| 7 | 8 | .935056 | |||
| 8 | 9 | .926129 | |||
| 9 | 10 | .917287 | |||
| 10 | 11 | .908530 | |||
| 11 | 12 | .899856 | |||
| 12 | .891266 | ||||
Table F(12.4)—With Interest at 12.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .971614 | .957623 | .948370 | |
| 1 | 2 | .990306 | .962195 | .948340 | .939176 |
| 2 | 3 | .980706 | .952868 | .939147 | |
| 3 | 4 | .971199 | .943631 | .930043 | |
| 4 | 5 | .961785 | .934484 | ||
| 5 | 6 | .952461 | .925425 | ||
| 6 | 7 | .943228 | .916454 | ||
| 7 | 8 | .934085 | |||
| 8 | 9 | .925030 | |||
| 9 | 10 | .916063 | |||
| 10 | 11 | .907183 | |||
| 11 | 12 | .898389 | |||
| 12 | .889680 | ||||
Table F(12.6)—With Interest at 12.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | but less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .971195 | .957000 | .947614 | |
| 1 | 2 | .990159 | .961638 | .947583 | .938289 |
| 2 | 3 | .980416 | .952175 | .938258 | |
| 3 | 4 | .970768 | .942805 | .929025 | |
| 4 | 5 | .961215 | .933527 | ||
| 5 | 6 | .951756 | .924341 | ||
| 6 | 7 | .942390 | .915245 | ||
| 7 | 8 | .933117 | |||
| 8 | 9 | .923934 | |||
| 9 | 10 | .914842 | |||
| 10 | 11 | .905840 | |||
| 11 | 12 | .896926 | |||
| 12 | .888099 | ||||
Table F(12.8)—With Interest at 12.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | but less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .970777 | .956379 | .946860 | |
| 1 | 2 | .990013 | .961082 | .946828 | .937403 |
| 2 | 3 | .980126 | .951484 | .937372 | |
| 3 | 4 | .970337 | .941981 | .928011 | |
| 4 | 5 | .960647 | .932574 | ||
| 5 | 6 | .951053 | .923260 | ||
| 6 | 7 | .941554 | .914040 | ||
| 7 | 8 | .932151 | |||
| 8 | 9 | .922842 | |||
| 9 | 10 | .913625 | |||
| 10 | 11 | .904501 | |||
| 11 | 12 | .895468 | |||
| 12 | .886525 | ||||
Table F(13.0)—With Interest at 13.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .970360 | .955760 | .946108 | |
| 1 | 2 | .989867 | .960528 | .946075 | .936521 |
| 2 | 3 | .979836 | .950795 | .936489 | |
| 3 | 4 | .969908 | .941160 | .926999 | |
| 4 | 5 | .960079 | .931623 | ||
| 5 | 6 | .950351 | .922183 | ||
| 6 | 7 | .940721 | .912838 | ||
| 7 | 8 | .931188 | |||
| 8 | 9 | .921753 | |||
| 9 | 10 | .912412 | |||
| 10 | 11 | .903167 | |||
| 11 | 12 | .894015 | |||
| 12 | .884956 | ||||
Table F(13.2)—With Interest at 13.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .969945 | .955143 | .945359 | |
| 1 | 2 | .989721 | .959975 | .945325 | .935641 |
| 2 | 3 | .979548 | .950107 | .935608 | |
| 3 | 4 | .969479 | .940341 | .925991 | |
| 4 | 5 | .959514 | .930675 | ||
| 5 | 6 | .949651 | .921109 | ||
| 6 | 7 | .939889 | .911641 | ||
| 7 | 8 | .930228 | |||
| 8 | 9 | .920667 | |||
| 9 | 10 | .911203 | |||
| 10 | 11 | .901837 | |||
| 11 | 12 | .892567 | |||
| 12 | .883392 | ||||
Table F(13.4)—With Interest at 13.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .969530 | .954527 | .944611 | |
| 1 | 2 | .989575 | .959423 | .944577 | .934764 |
| 2 | 3 | .979260 | .949422 | .934730 | |
| 3 | 4 | .969051 | .939524 | .924986 | |
| 4 | 5 | .958949 | .929730 | ||
| 5 | 6 | .948953 | .920038 | ||
| 6 | 7 | .939060 | .910447 | ||
| 7 | 8 | .929271 | |||
| 8 | 9 | .919584 | |||
| 9 | 10 | .909998 | |||
| 10 | 11 | .900511 | |||
| 11 | 12 | .891124 | |||
| 12 | .881834 | ||||
Table F(13.6)—With Interest at 13.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .969117 | .953913 | .943866 | |
| 1 | 2 | .989430 | .958873 | .943831 | .933890 |
| 2 | 3 | .978972 | .948738 | .933854 | |
| 3 | 4 | .968624 | .938710 | .923984 | |
| 4 | 5 | .958386 | .928788 | ||
| 5 | 6 | .948256 | .918971 | ||
| 6 | 7 | .938233 | .909257 | ||
| 7 | 8 | .928316 | |||
| 8 | 9 | .918504 | |||
| 9 | 10 | .908796 | |||
| 10 | 11 | .899190 | |||
| 11 | 12 | .889686 | |||
| 12 | .880282 | ||||
Table F(13.8)—With Interest at 13.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .968704 | .953301 | .943123 | |
| 1 | 2 | .989285 | .958325 | .943087 | .933018 |
| 2 | 3 | .978685 | .948056 | .932982 | |
| 3 | 4 | .968199 | .937898 | .922985 | |
| 4 | 5 | .957824 | .927849 | ||
| 5 | 6 | .947561 | .917907 | ||
| 6 | 7 | .937408 | .908072 | ||
| 7 | 8 | .927364 | |||
| 8 | 9 | .917428 | |||
| 9 | 10 | .907598 | |||
| 10 | 11 | .897873 | |||
| 11 | 12 | .888252 | |||
| 12 | .878735 | ||||
Table F(14.0)—With Interest at 14.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
[Applicable after April 30, 1989]
| 1 Number of months by which the valuation date for the first rull taxable year of the trust precedes the first payout | 2 Factors for payout at the end of each period | ||||
|---|---|---|---|---|---|
| At least | But less than | Annual period | Semiannual period | Quarterly period | Monthly period |
| 1 | 1.000000 | .968293 | .952691 | .942382 | |
| 1 | 2 | .989140 | .957778 | .942345 | .932148 |
| 2 | 3 | .978399 | .947377 | .932111 | |
| 3 | 4 | .967774 | .937088 | .921989 | |
| 4 | 5 | .957264 | .926912 | ||
| 5 | 6 | .946868 | .916846 | ||
| 6 | 7 | .936586 | .906889 | ||
| 7 | 8 | .926415 | |||
| 8 | 9 | .916354 | |||
| 9 | 10 | .906403 | |||
| 10 | 11 | .896560 | |||
| 11 | 12 | .886824 | |||
| 12 | .877193 | ||||
(7) Actuarial Table U(1) for transfers for which the valuation date is on or after June 1, 2023. The present value of a remainder interest in a charitable remainder unitrust that is dependent on the termination of a life interest is determined by using the section 7520 rate, Tables F(0.2) through (20.0) (see paragraph (e)(6)(ii) of this section), and the formula in paragraph (e)(5)(i) of this section to derive a remainder factor from the appropriate mortality table to at least five decimal places. For the convenience of taxpayers, actuarial factors have been computed by the IRS and appear in Table U(1). For transfers for which the valuation date is on or after June 1, 2023, the actuarial tables are currently available, at no charge, electronically via the IRS website at https://www.irs.gov/retirement-plans/actuarial-tables. These actuarial tables are referenced and explained by IRS Publication 1458, Actuarial Valuations Version 4B (2023). This publication will be available within a reasonable time after June 1, 2023. See, however, § 1.7520-3(b) (relating to exceptions to the use of prescribed tables under certain circumstances).
(f) Applicability date. This section applies on and after June 1, 2023.
treatment of excess distributions of trusts applicable to taxable years beginning before january 1, 1969
§ 1.665(a)-0 Excess distributions by trusts; scope of subpart D.
Subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Internal Revenue Code, in the case of trusts other than foreign trusts created by U.S. persons, is designed generally to prevent a shift of tax burden to a trust from a beneficiary or beneficiaries. In the case of a foreign trust created by a U.S. person, subpart D is designed to prevent certain other tax avoidance possibilities. To accomplish these ends, subpart D provides special rules for treatment of amounts paid, credited, or required to be distributed by a complex trust (subject to subpart C (section 661 and following) of such part I) in any year in excess of distributable net income for that year. Such an excess distribution is defined as an accumulation distribution, subject to the limitations in section 665 (b) or (c). An accumulation distribution, in the case of a trust other than a foreign trust created by a U.S. person, is “thrown back” to each of the 5 preceding years in inverse order. In the case of a foreign trust created by a U.S. person such an accumulation distribution is “thrown back,” in inverse order, to each of the preceding years to which the Internal Revenue Code of 1954 applies. That is, an accumulation distribution will be taxed to the beneficiaries of the trust in the year the distribution is made or required, but, in general, only to the extent of the distributable net income of those years which was not in fact distributed. However, with respect to a distribution by a trust other than a foreign trust created by a U.S. person, the resulting tax will not be greater than the aggregate of the taxes that would have been attributable to the amount thrown back to previous years had they been included in gross income of the beneficiaries in those years. In the case of a foreign trust created by a U.S. person, the resulting tax is computed under the provisions of section 669. To prevent double taxation, both in the case of a foreign trust created by a U.S. person, and a trust other than a foreign trust created by a U.S. person, the beneficiaries receive a credit for any taxes previously paid by the trust which are attributable to the excess thrown back and which are creditable under the provisions of chapter 1 of the Internal Revenue Code. Subpart D does not apply to any estate.
§ 1.665(a)-1 Undistributed net income.
(a) The term undistributed net income means for any taxable year the distributable net income of the trust for that year as determined under section 643(a), less:
(1) The amount of income required to be distributed currently and any other amounts properly paid or credited or required to be distributed to beneficiaries in the taxable year as specified in paragraphs (1) and (2) of section 661(a), and
(2) The amount of taxes imposed on the trust, as defined in § 1.665(d)-1.
The application of the rule in this paragraph to the first year of a trust in which income is accumulated may be illustrated by the following example:
| Distributable net income | $30,100 | |
| Less: | ||
| Income currently distributable to A | $10,000 | |
| Other amounts distributed to A | 10,000 | |
| Taxes imposed on the trust (see § 1.665(d)-1) | 2,640 | |
| 22,640 | ||
| Undistributed net income | 7,460 | |
(b) The undistributed net income of a foreign trust created by a U.S. person for any taxable year is the distributable net income of such trust (see § 1.643(a)-6 and the examples set forth in paragraph (b) thereof), less:
(1) The amount of income required to be distributed currently and any other amounts properly paid or credited or required to be distributed to beneficiaries in the taxable year as specified in paragraphs (1) and (2) of section 661(a), and
(2) The amount of taxes imposed on such trust by chapter 1 of the Internal Revenue Code, which are attributable to items of income which are required to be included in such distributable net income. For purposes of subparagraph (2) of this paragraph, the amount of taxes imposed on the trust (for any taxable year), by chapter 1 of the Internal Revenue Code is the amount of taxes imposed pursuant to the provisions of section 871 which is properly allocable to the undistributed portion of the distributable net income. See § 1.665(d)-1. The amount of taxes imposed pursuant to the provisions of section 871 is the difference between the total tax imposed pursuant to the provisions of that section on the foreign trust created by a U.S. person for the year and the amount which would have been imposed on such trust had all the distributable net income, as determined under section 643(a), been distributed. The application of the rule in this paragraph may be illustrated by the following examples:
| Distributable net income | $60,000 | |
| Less: | ||
| (1) Amounts distributed to the beneficiary— | ||
| Income currently distributed to the beneficiary | $7,000 | |
| Other amounts distributed to the beneficiary | 21,500 | |
| Taxes under sec. 871 deemed distributed to the beneficiary | 1,500 | |
| Total amounts distributed to the beneficiary | 30,000 | |
| (2) Amount of taxes imposed on the trust under chapter 1 of the Code (See § 1.665(d)-1) | 1,500 | |
| Total | 31,500 | |
| Undistributed net income | 28,500 | |
(1) The undistributed net income of the foreign trust created by a U.S. person for 1963 is $17,100, computed as follows:
| Distributable net income (60% of each item of gross income of entire trust): | ||
| 60% of $10,000 U.S. dividends | $6,000 | |
| 60% of $20,000 Country X capital gains | 12,000 | |
| 60% of $30,000 Country X dividends | 18,000 | |
| Total | 36,000 | |
| Less: | ||
| (i) Amounts distributed to the beneficiary— | ||
| Income currently distributed to the beneficiary (60% of $7,000) | $4,200 | |
| Other amounts distributed to the beneficiary (60% of $21,500) | 12,900 | |
| Taxes under sec. 871 deemed distributed to the beneficiary (60% of $1,500) | 900 | |
| Total amounts distributed to the beneficiary | 18,000 | |
| (ii) Amount of taxes imposed on the trust under chapter 1 of the Code (See § 1.665(d)-1) (60% of $1,500) | $900 | |
| Total | $18,900 | |
| Undistributed net income | 17,100 | |
| Distributed net income (40% of each item of gross income of entire trust) | ||
| 40% of $10,000 U.S. dividends | $4,000 | |
| 40% of $20,000 Country X capital gains | 8,000 | |
| 40% of Country X dividends | 12,000 | |
| Total | 24,000 | |
| Less: | ||
| (i) Amounts distributed to the beneficiary— | ||
| Income currently distributed to the beneficiary (40% of $7,000) | $2,800 | |
| Other amounts distributed to the beneficiary (40% of $21,500) | 8,600 | |
| Taxes under sec. 871 deemed distributed to the beneficiary (40% of $1,500) | 600 | |
| Total amounts distributed to the beneficiary | 12,000 | |
| (ii) Amount of taxes imposed on the trust under chapter 1 of the Code (See § 1.665(d)-1) (40% of $1,500) | $600 | |
| Total | $12,600 | |
| Undistributed net income | 11,400 | |
(c) However, the undistributed net income for any year to which an accumulation distribution for a later year may be thrown back may be reduced by accumulation distributions in intervening years and also by any taxes imposed on the trust which are deemed to be distributed under section 666 by reason of the accumulation distributions. On the other hand, undistributed net income for any year will not be reduced by any distributions in an intervening year which are excluded from the definition of an accumulation distribution under section 665(b), or which are excluded under section 663(a)(1), relating to gifts, bequests, etc. See paragraph (f)(5) of § 1.668(b)-2 for an illustration of the reduction of undistributed net income for any year by a subsequent accumulation distribution.
§ 1.665(b)-1 Accumulation distributions of trusts other than certain foreign trusts; in general.
(a) Subject to the limitations set forth in § 1.665(b)-2, in the case of a trust other than a foreign trust created by a U.S. person, the term accumulation distribution for any taxable year means an amount (if in excess of $2,000), by which the amounts properly paid, credited, or required to be distributed within the meaning of section 661(a)(2) for that year exceed the distributable net income (determined under section 643(a)) of the trust, reduced (but not below zero) by the amount of income required to be distributed currently. (In computing the amount of an accumulation distribution pursuant to the preceding sentence, there is taken into account amounts applied or distributed for the support of a dependent under the circumstances specified in section 677(b) or section 678(c) out of corpus or out of other than income for the taxable year and amounts used to discharge or satisfy any person’s legal obligation as that term is used in § 1.662(a)-4.) If the distribution as so computed is $2,000 or less, it is not an accumulation distribution within the meaning of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code. If the distribution exceeds $2,000, then the full amount is an accumulation distribution for the purposes of subpart D.
(b) Although amounts properly paid, credited, or required to be distributed under section 661(a)(2) do not exceed the income of the trust during the taxable year, an accumulation distribution may result if such amounts exceed distributable net income reduced (but not below zero) by the amount required to be distributed currently. This may result from the fact that expenses allocable to corpus are taken into account in determining taxable income and hence distributable net income. However, in the case of a trust other than a foreign trust created by a U.S. person, the provisions of subpart D will not apply unless there is undistributed net income in at least one of the five preceding taxable years. See section 666 and the regulations thereunder.
(c) The provisions of paragraphs (a) and (b) of this section may be illustrated by the following examples (it is assumed in each case that the exclusions provided in § 1.665(b)-2 do not apply):
| Total distribution | $20,000 | |
| Less: Income required to be distributed currently (section 661(a)(1)) | 10,000 | |
| Other amounts distributed (section 661(a)(2)) | 10,000 | |
| Distributable net income | $15,000 | |
| Less: Income required to be distributed currently | 10,000 | |
| Balance of distributable net income | 5,000 | |
| Accumulation distribution | 5,000 | |
| Total distribution | $20,000 | |
| Less: Income required to be distributed currently to A (section 661(a)(1)) | 15,000 | |
| Other amounts distributed (section 661(a)(2)) | 5,000 | |
| Distributable net income | $13,000 | |
| Less: Income required to be distributed currently to A | 15,000 | |
| Balance of distributable net income | 0 | |
| Accumulation distribution to B | 5,000 | |
| Total distribution | $20,000 | |
| Less: income required to be distributed currently | 0 | |
| Other amounts distributed (section 661(a)(2)) | 20,000 | |
| Distributable net income | 17,000 | |
| Accumulation distribution | 3,000 | |
(d) There are not taken into account, in computing the accumulation distribution for any taxable year, any amounts deemed distributed in that year because of an accumulation distribution in a later year.
§ 1.665(b)-2 Exclusions from accumulation distributions in the case of trusts (other than a foreign trust created by a U.S. person).
(a) In the case of a trust other than a foreign trust created by a U.S. person, certain amounts paid, credited, or required to be distributed to a beneficiary are excluded under section 665(b) in determining whether there is an accumulation distribution for the purposes of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code. These exclusions are solely for the purpose of determining the amount allocable to preceding years under section 666 and in no way affect the determination under subpart C (section 661 and following) of such part I of the beneficiary’s tax liability for the year of distribution. Further, amounts excluded from accumulation distributions do not reduce the amount of undistributed net income for the 5 years preceding the year of distribution.
(b) The amounts excluded from the computation of an accumulation distribution are discussed in the following subparagraphs:
(1) Distributions from accumulations while a beneficiary is under 21. (i) The first exception to the definition of an accumulation distribution is for amounts paid, credited, or required to be distributed to a beneficiary who was under 21 years of age or unborn when it was accumulated. A distribution is to be considered as so paid, credited, or required to be distributed to the extent, and only to the extent, that there is no undistributed net income for taxable years preceding the year of distribution other than undistributed net income accumulated while the beneficiary was under 21. If a distribution can be made from income accumulated either before or after a beneficiary reaches 21, it will be considered as made from the most recently accumulated income, and it will be so considered even though the governing instrument directs that distributions be charged first against the earliest accumulations.
(ii) As was indicated in paragraph (a) of this section, a distribution of an amount excepted from the definition of an accumulation distribution will not reduce undistributed net income for the purpose of determining the effect of a future accumulation distribution. Thus, a distribution to a beneficiary of income accumulated before he reached 21 would not reduce the undistributed net income includible in a future accumulation distribution to another beneficiary. However, all future distributions to the same beneficiary, or to another beneficiary to whom a distribution would be excepted under the provisions of this subparagraph, would be excepted from the definition of an accumulation distribution to the extent that they could not be paid, credited, or required to be distributed from other accumulated income.
(iii) The following examples illustrate the application of the foregoing rules of this subparagraph (in each of these examples it is assumed that the exceptions in section 665(b) (2), (3), and (4) do not apply):
(a) Income is to be accumulated until A reaches 21 when the corpus and accumulated income are to be distributed to him. The distribution is not an accumulation distribution.
(b) Income is to be accumulated until A is 21, when it is to be distributed to him but the corpus is to remain in trust. A distribution of the accumulated income to A when he reaches 21 is not an accumulation distribution.
(c) Income is to be accumulated and added to corpus until A reaches 21, when he is to receive one-third of the corpus (including accumulations). Thereafter all the income is to be paid to A until he is 23 when the remaining corpus (including accumulations) is to be paid to him. If A dies under that age any undistributed portion is to be paid to B. Distributions to A at 21 and 23 out of accumulations are not accumulation distributions even though they include accumulated income. However, if A died at the age of 22, when B was 23, a distribution to B would be an accumulation distribution to the extent of income accumulations since B reached 21, and the amount of undistributed net income includible in the distribution will not be reduced by the previous distribution to A.
(d) Income is to be accumulated and added to corpus until A is 21. After he is 21, he is entitled to all the income and, in addition, to distributions of corpus in the discretion of the trustee. When he reaches 25 he is entitled to the corpus. Distributions to A are not accumulation distributions, whether they are discretionary or upon termination of the trust.
(e) The facts are the same as in the preceding example, except that income is to be accumulated until A is 23. Distributions to A are accumulation distributions to the extent of income accumulated after A reached 21.
(f) Income may be distributed among a testator’s children or accumulated and added to corpus until the youngest child is 21, when the corpus is to be distributed to the testator’s then living descendants. Upon termination of the trust, the corpus is distributed to A, age 21; B, age 23; and C, the child of a deceased child, age 3. The distributions to A and C are not accumulation distributions. The distribution to B is an accumulation distribution to the extent of income accumulated after he reaches 21. (If the terms of the trust were such that it was subject to the separate share treatment under section 663(c), the distribution to B would be an accumulation distribution only to the extent of income accumulated for B’s separate share since he reached 21.)
(g) Income may be distributed to A or accumulated and added to corpus during A’s life. Upon the death of A the corpus is to be distributed to B. B is 23 at A’s death. The distribution is an accumulation distribution to the extent of income accumulated since B reached 21.
(2) Emergency distributions. The second exclusion from the definition of an accumulation distribution is for amounts properly paid or credited to a beneficiary to meet his emergency needs. Whether or not a distribution falls within this exclusion depends upon the facts and circumstances causing the distribution. A distribution based upon an unforeseen or unforeseeable combination of circumstances requiring immediate help to the beneficiary would qualify for the exclusion. However, the beneficiary must be in actual need of the distribution and the fact that he had other sufficient resources would tend to negate the conclusion that a distribution was to meet his emergency needs. Ordinary distributions for the support, maintenance, or education of the beneficiary would not qualify for the exclusion.
(3) Certain distributions at specified ages. The third exclusion from the definition of an accumulation distribution is for amounts properly paid or credited to a beneficiary upon the beneficiary’s attaining a specified age or ages; provided, (i) the total number of such distributions with respect to that beneficiary cannot exceed 4; (ii) the period between each such distribution is 4 years or more; and (iii) on January 1, 1954, such distributions were required by the specific terms of the governing instrument. Any discretionary invasion of corpus at other times is not excluded under this subparagraph, but does not affect the status of distributions that would otherwise be excluded. If more than four distributions are required to be made to a particular beneficiary at specified ages if he survives to receive them, none of the distributions will be excluded, even though the beneficiary dies before he receives more than four. On the other hand, a direction to make additional distributions to a remainderman will not affect the status of distributions required to be made to the primary beneficiary. For example, a trust agreement provided on January 1, 1954, that when A reached age 25 he would receive one-eighth of the corpus and accumulated income, as then constituted, and similar distributions at ages 30, 35, and 40. It also provided for similar distributions to B after A’s death, and for additional discretionary distributions to both A and B. Required distributions to both A and B are excluded, regardless of whether discretionary distributions are made, but discretionary distributions are not excluded. On the other hand, if an additional distribution to A was directed when he reached 45, no distributions to him would be excluded, regardless of when he died.
(4) Certain final distributions. (i) The last exception to the definition of an accumulation distribution is for amounts properly paid or credited to a beneficiary as a final distribution of a trust if the final distribution is made more than 9 years after the date of the last transfer to such trust.
(ii) The term last transfer to such trust includes only transfers, whether by the original grantor or by a third person, made with a donative intent. A transfer arising out of a property right held by the trust is excluded, such as a transfer by a debtor in satisfaction of his indebtedness, or a distribution in liquidation or reorganization of a corporation. If the terms of two or more trusts include cross-remainders on the deaths of life beneficiaries, the donative transfers occurred at the time the trusts were created. The addition of the corpus of one trust to that of another when a remainder falls in is therefore not a new transfer within the meaning of section 665(b)(4).
(iii) For example, under the terms of a trust created July 1, 1950, with an original corpus of $100,000, by H for the benefit of his wife, W, the income of the trust is to be accumulated and added to corpus. Upon the expiration of a 10-year period, the trust is to terminate and its assets, including all accumulated income, are to be distributed to W. No transfers were made by H or other persons to the trust after it was created. Both the trust and W file returns on the calendar year basis. In accordance with its terms, the trust terminated on June 30, 1960, and on August 1, 1960, the trustee made a final distribution of the assets of the trust to W, consisting of investments derived from $100,000 of donated principal, accumulated income of $30,000 attributable to the period July 1, 1950, through December 31, 1959, and income of $3,000 attributable to the period the trust was in existence during 1960. Subpart D is inapplicable to the $3,000 of income of the trust for 1960 since that amount would be deductible by the trust and includible in W’s gross income for that year to the extent provided in subpart C. However, the balance of the distribution will qualify as an exclusion from the provisions of subpart D.
§ 1.665(b)-3 Exclusions under section 663(a)(1).
Subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code, has no application to an amount which qualifies as an exclusion under section 663(a)(1), relating to gifts, bequests, etc.
§ 1.665(c)-1 Accumulation distributions of certain foreign trusts; in general.
(a) In the case of a foreign trust created by a U.S. person, the term accumulation distribution for any taxable year means an amount by which the amounts properly paid, credited, or required to be distributed within the meaning of section 661(a)(2) for that year exceed the distributable net income (determined under section 643(a)) of the trust, reduced (but not below zero) by the amount of income required to be distributed currently. (In computing the amount of an accumulation distribution pursuant to the preceding sentence, there is taken into account amounts applied or distributed for the support of a dependent under circumstances specified in section 677(b) and section 678(c) out of corpus or out of other than income for the taxable year and amounts used to discharge or satisfy any person’s legal obligation as that term is used in § 1.662(a)-4.)
(b) Although amounts properly paid, credited, or required to be distributed under section 661(a)(2) do not exceed the income of the trust during the taxable year, an accumulation distribution may result if such amounts exceed distributable net income reduced (but not below zero) by the amount required to be distributed currently. This may result from the fact that expenses allocable to corpus are taken into account in determining taxable income and hence distributable net income. However, the provisions of subpart D will not apply unless there is undistributed net income in at least one of the preceding taxable years which began after December 31, 1953, and ended after August 16, 1954. See section 666 and the regulations thereunder.
(c) The provisions of paragraphs (a) and (b) of this section may be illustrated by the examples provided in paragraph (c) of § 1.665(b)-1.
§ 1.665(c)-2 Indirect payments to the beneficiary.
(a) In general. Except as provided in paragraph (b) of this section, for purposes of section 665 any amount paid to a U.S. person which is from a payor who is not a U.S. person and which is derived directly or indirectly from a foreign trust created by a U.S. person shall be deemed in the year of payment to the U.S. person to have been directly paid to the U.S. person by the trust. For example, if a nonresident alien receives a distribution from a foreign trust created by a U.S. person and then pays the amount of the distribution over to a U.S. person, the payment of such amount to the U.S. person represents an accumulation distribution to the U.S. person from the trust to the extent that the amount received would have been an accumulation distribution had the trust paid the amount directly to the U.S. person in the year in which the payment was received by the U.S. person. This section also applies in a case where a nonresident alien receives indirectly an accumulation distribution from a foreign trust created by a U.S. person and then pays it over to a U.S. person. An example of such a transaction is one where the foreign trust created by a U.S. person makes the distribution to an intervening foreign trust created by either a U.S. person or a person other than a U.S. person and the intervening trust distributes the amount received to a nonresident alien who in turn pays it over to a U.S. person. Under these circumstances, it is deemed that the payment received by the U.S. person was received directly from a foreign trust created by a U.S. person.
(b) Limitation. In the case of a distribution to a beneficiary who is a U.S. person, paragraph (a) of this section does not apply if the distribution is received by such beneficiary under circumstances indicating lack of intent on the part of the parties to circumvent the purposes for which section 7 of the Revenue Act of 1962 (76 Stat. 985) was enacted.
§ 1.665(d)-1 Taxes imposed on the trust.
(a) For the purpose of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code, the term taxes imposed on the trust means (for any taxable year) the amount of Federal income taxes which are properly allocable to the undistributed portion of the distributable net income. This amount is the difference between the total taxes of the trust for the year and the amount which would have been paid by the trust had all of the distributable net income, as determined under section 643(a), been distributed. Thus, in determining the amount of taxes imposed on the trust for the purposes of subpart D, there is excluded the portion of the taxes paid by the trust which is attributable to items of gross income which are not includible in distributable net income, such as capital gains allocable to corpus. The rule stated in this paragraph may be illustrated by the following example:
(2) The distributable net income of the trust computed under section 643(a) is $18,000 (royalties of $20,000 less expenses of $2,000). The total taxes paid by the trust are $3,787, computed as follows:
| Royalties | $20,000 | |
| Capital gains | 10,000 | |
| Gross income | 30,000 | |
| Deductions: | ||
| Expenses | $2,000 | |
| Distributions to A | 10,000 | |
| Capital gain deduction | 5,000 | |
| Personal exemption | 100 | |
| 17,100 | ||
| Taxable income | 12,900 | |
| Total income taxes | 3,787 | |
| Taxable income of the trust | $12,900 | |
| Less: Undistributed portion of distributable net income ($18,000−$10,000) | 8,000 | |
| Balance of taxable income | 4,900 | |
| Income taxes on $4,900 | 1,074 | |
| Total taxes | $3,787 | |
| Taxes which would have been paid by the trust had all of the distributable net income been distributed | 1,074 | |
| Taxes imposed on the trust as defined in this paragraph | 2,713 |
(b) If in any subsequent year an accumulation distribution is made by the trust which results in a throwback to the taxable year, the taxes of the taxable year allocable to the undistributed portion of distributable net income (the taxes imposed on the trust), after the close of the subsequent year, are the taxes prescribed in paragraph (a) of this section reduced by the taxes of the taxable year allowed as credits to beneficiaries on account of amounts deemed distributed on the last day of the taxable year under section 666. See paragraph (f)(4) of § 1.668(b)-2 for an illustration of the application of this paragraph.
§ 1.665(e)-1 Preceding taxable year.
(a) Definition. For purposes of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Internal Revenue Code of 1954, the term preceding taxable year does not include any taxable year to which such part I does not apply. See section 683 and regulations thereunder. Accordingly, the provisions of such subpart D may not, in general, be applied to any taxable year which begins before 1954 or ends before August 17, 1954. For example, if a trust (reporting on the calendar year basis) makes a distribution during the calendar year 1955 of income accumulated during prior years and the distribution exceeds the distributable net income of 1955, the excess distribution may be allocated under such subpart D to 1954, but it may not be allocated to 1953 and preceding years, since the Internal Revenue Code of 1939 applies to those years.
(b) Simple trusts subject to subpart D. An accumulation distribution may be properly allocated to a preceding taxable year in which the trust qualified as a simple trust (that is, qualified for treatment under subpart B (section 651 and following) of such part I). In such event, the trust is treated for such preceding taxable year in all respects as if it were a trust to which subpart C (section 661 and following) of such part I applies. An example of such a circumstance would be in the case of a trust (required under the trust instrument to distribute all of its income currently) which received in the preceding taxable year extraordinary dividends or taxable stock dividends which the trustee in good faith allocated to corpus, but which are subsequently determined to be currently distributable to the beneficiary. See section 643(a)(4) and § 1.643(a)-4. The trust would qualify for treatment under such subpart C for the year of distribution of the extraordinary dividends or taxable stock dividends, because the distribution is not out of income of the current taxable year and would be treated as other amounts properly paid or credited or required to be distributed for such taxable year within the meaning of section 661(a)(2). Also, in the case of a trust other than a foreign trust created by a U.S. person, the distribution would qualify as an accumulation distribution for the purposes of such subpart D if in excess of $2,000 and not excepted under section 665(b) and the regulations thereunder. In the case of a foreign trust created by a U.S. person, the distribution, regardless of the amount, would qualify as an accumulation distribution for the purposes of subpart D. For the purposes only of such subpart D, the trust would be treated as subject to the provisions of such subpart C for the preceding taxable year in which the extraordinary or taxable stock dividends were received and in computing undistributed net income for such preceding year, the extraordinary or taxable stock dividends would be included in distributable net income under section 643(a). The rule stated in the preceding sentence would also apply if the distribution in the later year were made out of corpus without regard to a determination that the extraordinary dividends or taxable stock dividends in question were currently distributable to the beneficiary.
In trusts to which the separate share rule of section 663(c) is applicable for any taxable year, subpart D (section 665 and following), part I, subchapter J, of the Code, is applied as if each share were a separate trust. Thus, “undistributed net income” and the amount of an “accumulation distribution” are computed separately for each share. The “taxes imposed on the trust” are allocated as follows:
(a) There is first allocated to each separate share that portion of the “taxes imposed on the trust”, computed before the allowance of credits under section 642(a), which bears the same relation to the total that the distributable net income of the separate share bears to the distributable net income of the trust, adjusted for this purpose as follows:
(1) There is excluded from distributable net income of the trust and of each separate share any tax-exempt interest, foreign income of a foreign trust, and excluded dividends, to the extent such amounts are included in distributable net income pursuant to section 643(a) (5), (6), and (7); and
(2) The distributable net income of the trust is reduced by any deductions allowable under section 661 for amounts paid, credited, or required to be distributed during the taxable year, and the distributable net income of each separate share is reduced by any such deduction allocable to that share.
(b) The taxes so determined for each separate share are then reduced by that portion of the credits against tax allowable to the trust under section 642(a) in computing the “taxes imposed on the trust” which bear the same relation to the total that the items of income allocable to the separate share with respect to which the credit is allowed bear to the total of such items of the trust. The amount of taxes imposed on the trust allocable to a separate share as so determined is then reduced by the amount of the taxes allowed under sections 667 and 668 as a credit to a beneficiary of the separate share on account of any accumulation distribution determined for any taxable year intervening between the year for which the determination is made and the year of an accumulation distribution with respect to which the determination is made. See paragraph (b) of § 1.665(d)-1.
§ 1.666(a)-1A Amount allocated.
(a) In general. In the case of a trust that is subject to subpart C of part I of subchapter J of chapter 1 of the Code (relating to estates and trusts that may accumulate income or that distribute corpus), section 666(a) prescribes rules for determining the taxable years from which an accumulation distribution will be deemed to have been made and the extent to which the accumulation distribution is considered to consist of undistributed net income. In general, an accumulation distribution made in taxable years beginning after December 31, 1969, is deemed to have been made first from the earliest preceding taxable year of the trust for which there is undistributed net income. An accumulation distribution made in a taxable year beginning before January 1, 1970, is deemed to have been made first from the most recent preceding taxable year of the trust for which there is undistributed net income. See § 1.665(e)-1A for the definition of “preceding taxable year.”
(b) Distributions by domestic trusts—(1) Taxable years beginning after December 31, 1973. An accumulation distribution made by a trust (other than a foreign trust created by a U.S. person) in any taxable year beginning after December 31, 1973, is allocated to the preceding taxable years of the trust (defined in § 1.665(e)-1A(a)(1)(ii) as those beginning after December 31, 1968) according to the amount of undistributed net income of the trust for such years. For this purpose, an accumulation distribution is first to be allocated to the earliest such preceding taxable year in which there is undistributed net income and shall then be allocated, beginning with the next earliest, to any remaining preceding taxable years of the trust. The portion of the accumulation distribution allocated to the earliest preceding taxable year is the amount of the undistributed net income for that preceding taxable year. The portion of the accumulation distribution allocated to any preceding taxable year subsequent to the earliest such preceding taxable year is the excess of the accumulation distribution over the aggregate of the undistributed net income for all earlier preceding taxable years. See paragraph (d) of this section for adjustments to undistributed net income for prior distributions. The provisions of this subparagraph may be illustrated by the following example:
(2) Taxable years beginning after December 31, 1969, and before January 1, 1974. If a trust (other than a foreign trust created by a U.S. person) makes an accumulation distribution in a taxable year beginning after December 31, 1969, and before January 1, 1974, the distribution will be deemed distributed in the same manner as accumulation distributions qualifying under subparagraph (1) of this paragraph, except that the first year to which the distribution may be thrown back cannot be earlier than the fifth taxable year of the trust preceding the year in which the accumulation distribution is made. Thus, for example, in the case of an accumulation distribution made in the taxable year of a domestic trust which begins on January 1, 1972, the taxable year of the trust beginning on January 1, 1967, would be the first year in which the distribution was deemed made, assuming that there was undistributed net income for 1967. See also § 1.665(e)-1A(a)(1). The provisions of this subparagraph may be illustrated by the following example:
(3) Taxable years beginning after December 31, 1968, and before January 1, 1970. Accumulation distributions made in taxable years of the trust beginning after December 31, 1968, and before January 1, 1970, are allocated to prior years according to § 1.666(a)-1.
(c) Distributions by foreign trusts—(1) Foreign trusts created solely by U.S. persons—(i) Taxable years beginning after December 31, 1969. If a foreign trust created by a U.S. person makes an accumulation distribution in any taxable year beginning after December 31, 1969, the distribution is allocated to the trust’s preceding taxable years (defined in § 1.665(e)-1A(a)(2) as those beginning after Dec. 31, 1953, and ending after Aug. 16, 1954) according to the amount of undistributed net income of the trust for such years. For this purpose, an accumulation distribution is first allocated to the earliest such preceding taxable year in which there is undistributed net income and shall then be allocated in turn, beginning with the next earliest, to any remaining preceding taxable years of the trust. The portion of the accumulation distribution allocated to the earliest preceding taxable year is the amount of the undistributed net income for that preceding taxable year. The portion of the accumulation distribution allocated to any preceding taxable year subsequent to the earliest such preceding taxable year is the excess of the accumulation distribution over the aggregate of the undistributed net income for all earlier preceding taxable years. See paragraph (d) of this section for adjustments to undistributed net income for prior distributions. The provisions of this subdivision may be illustrated by the following example:
(ii) Taxable years beginning after December 31, 1968, and before January 1, 1970. Accumulation distributions made in taxable years of the trust beginning after December 31, 1968, and before January 1, 1970, are allocated to prior years according to § 1.666(a)-1.
(2) Foreign trusts created partly by U.S. persons—(i) Taxable years beginning after December 31, 1969. If a trust that is in part a foreign trust created by a U.S. person and in part a foreign trust created by a person other than a U.S. person makes an accumulation distribution in any year after December 31, 1969, the distribution is deemed made from the undistributed net income of the foreign trust created by a U.S. person in the proportion that the total undistributed net income for all preceding years of the foreign trust created by the U.S. person bears to the total undistributed net income for all years of the entire foreign trust. In addition, such distribution is deemed made from the undistributed net income of the foreign trust created by a person other than a U.S. person in the proportion that the total undistributed net income for all preceding years of the foreign trust created by a person other than a U.S. person bears to the total undistributed net income for all years of the entire foreign trust. Accordingly, an accumulation distribution of such a trust is composed of two portions with one portion relating to the undistributed net income of the foreign trust created by the U.S. person and the other portion relating to the undistributed net income of the foreign trust created by the person other than a U.S. person. For these purposes, each portion of an accumulation distribution made in any taxable year is first allocated to each of such preceding taxable years in turn, beginning with the earliest preceding taxable year, as defined in § 1.665(e)-1A(a), of the applicable foreign trusts, to the extent of the undistributed net income for the such trust for each of those years. Thus, each portion of an accumulation distribution is deemed to have been made from the earliest accumulated income of the applicable trust. If the foreign trust created by a U.S. person makes an accumulation distribution in any year beginning after December 31, 1969, the distribution is included in the beneficiary’s income for that year to the extent of the undistributed net income of the trust for the trust’s preceding taxable years which began after December 31, 1953, and ended after August 16, 1954. The provisions of this subdivision may be illustrated by the following example:
| Year | Undistributed net income-portion of the trust created by a U.S. person | Undistributed net income-portion of the trust created by a person other than a U.S. person |
|---|---|---|
| 1962 | $7,000 | $4,000 |
| 1963 | 12,000 | 7,000 |
| 1964 | None | None |
| 1965 | 11,000 | 5,000 |
| 1966 | 8,000 | 3,000 |
| 1967 | None | None |
| 1968 | 4,000 | 2,000 |
| 1969 | 17,000 | 8,000 |
| 1970 | 16,000 | 9,000 |
| 1971 | None | None |
| 1972 | 25,000 | 12,000 |
| 1973 | 20,000 | 10,000 |
| Totals | 120,000 | 60,000 |
| Year | Throwback to preceding years of foreign trust created by a U.S. person | Throwback to preceding years of portion of the entire foreign trust which is not a foreign trust created by a U.S. person |
|---|---|---|
| 1962 | $7,000 | None |
| 1963 | 12,000 | None |
| 1964 | None | None |
| 1965 | $11,000 | None |
| 1966 | 8,000 | None |
| 1967 | None | None |
| 1968 | 4,000 | None |
| 1969 | 17,000 | $8,000 |
| 1970 | 16,000 | 9,000 |
| 1971 | None | None |
| 1972 | $25,000 | $12,000 |
| 1973 | None | 10,000 |
| Totals | 100,000 | 39,000 |
(ii) Taxable years beginning after December 31, 1968, and before January 1, 1970. Accumulation distributions made in taxable years of the trust beginning after December 31, 1968, and before January 1, 1970, are allocated to prior years according to § 1.666(a)-1.
(3) Foreign trusts created by non-U.S. persons. To the extent that a foreign trust is a foreign trust created by a person other than a U.S. person, an accumulation distribution is included in the beneficiary’s income for the year paid, credited, or required to be distributed to the extent provided under paragraph (b) of this section.
(d) Reduction of undistributed net income for prior accumulation distributions. For the purposes of allocating to any preceding taxable year an accumulation distribution of the taxable year, the undistributed net income of such preceding taxable year is reduced by the amount from such year deemed distributed in any accumulation distribution of undistributed net income made in any taxable year intervening between such preceding taxable year and the taxable year. Accordingly, for example, if a trust has undistributed net income for 1974 and makes accumulation distributions during the taxable years 1978 and 1979, in determining that part of the 1979 accumulation distribution that is thrown back to 1974 the undistributed net income for 1974 is first reduced by the amount of the undistributed net income for 1974 deemed distributed in the 1978 accumulation distribution.
(e) Rule when no undistributed net income. If, before the application of the provisions of subpart D to an accumulation distribution for the taxable year, there is no undistributed net income for a preceding taxable year, then no portion of the accumulation distribution is undistributed net income deemed distributed on the last day of such preceding taxable year. Thus, if an accumulation distribution is made during the taxable year 1975 from a trust whose earliest preceding taxable year is taxable year 1970, and the trust had no undistributed net income for 1970, then no portion of the 1975 accumulation distribution is undistributed net income deemed distributed on the last day of 1970.
§ 1.666(b)-1A Total taxes deemed distributed.
(a) If an accumulation distribution is deemed under § 1.666(a)-1A to be distributed on the last day of a preceding taxable year and the amount is not less than the undistributed net income for such preceding taxable year, then an additional amount equal to the “taxes imposed on the trust attributable to the undistributed net income” (as defined in § 1.665(d)-1A(b)) for such preceding taxable year is also deemed distributed under section 661(a)(2). For example, a trust has undistributed net income of $8,000 for the taxable year 1974. The taxes imposed on the trust attributable to the undistributed net income are $3,032. During the taxable year 1977, an accumulation distribution of $8,000 is made to the beneficiary, which is deemed under § 1.666(a)-1A to have been distributed on the last day of 1974. The 1977 accumulation distribution is not less than the 1974 undistributed net income. Accordingly, the taxes of $3,032 imposed on the trust attributable to the undistributed net income for 1974 are also deemed to have been distributed on the last day of 1974. Thus, a total of $11,032 will be deemed to have been distributed on the last day of 1974.
(b) For the purpose of paragraph (a) of this section, the undistributed net income of any preceding taxable year and the taxes imposed on the trust for such preceding taxable year attributable to such undistributed net income are computed after taking into account any accumulation distributions of taxable years intervening between such preceding taxable year and the taxable year. See paragraph (d) of § 1.666(a)-1A.
§ 1.666(c)-1A Pro rata portion of taxes deemed distributed.
(a) If an accumulation distribution is deemed under § 1.666(a)-1A to be distributed on the last day of a preceding taxable year and the amount is less than the undistributed net income for such preceding taxable year, then an additional amount is also deemed distributed under section 661(a)(2). The additional amount is equal to the “taxes imposed on the trust attributable to the undistributed net income” (as defined in § 1.665(a)-1A(b)) for such preceding taxable year, multiplied by a fraction, the numerator of which is the amount of the accumulation distribution allocated to such preceding taxable year and the denominator of which is the undistributed net income for such preceding taxable year. See paragraph (b) of example 1 and paragraphs (c) and (f) of example 2 in § 1.666(c)-2A for illustrations of this paragraph.
(b) For the purpose of paragraph (a) of this section, the undistributed net income of any preceding taxable year and the taxes imposed on the trust for such preceding taxable year attributable to such undistributed net income are computed after taking into account any accumulation distributions of any taxable years intervening between such preceding taxable year and the taxable year. See paragraph (d) of § 1.666(a)-1A and paragraph (c) of example 1 and paragraphs (e) and (h) of example 2 in § 1.666(c)-2A.
§ 1.666(c)-2A Illustration of the provisions of section 666 (a), (b), and (c).
The application of the provisions of §§ 1.666(a)-1A, 1.666(b)-1A, and 1.666(c)-1A may be illustrated by the following examples:
| Year | Undistributed portion of distributable net income | Taxes imposed on the trust attributable to the undistributed net income | Undistributed net income |
|---|---|---|---|
| 1974 | $12,100 | $3,400 | $8,700 |
| 1975 | 16,100 | 5,200 | 10,900 |
| 1976 | 6,100 | 1,360 | 4,740 |
| 1977 | None | None | None |
| 1978 | 10,100 | 2,640 | 7,460 |
(c) In allocating the accumulation distribution for 1980, the amount of undistributed net income for 1974 will reflect the accumulation distribution for 1979. The undistributed net income for 1974 will then be $1,700 and the taxes imposed on the trust for 1974 will be $664, determined as follows:
| Undistributed net income as of the close of 1974 | $8,700 |
| Less: Accumulation distribution (1979) | 7,000 |
| Balance (undistributed net income as of the close of 1979) | 1,700 |
| Taxes imposed on the trust attributable to the undistributed net income as of the close of 1979 (1,700/8,700 × $3,400) | 664 |
| Year | Undistributed net income | Taxes imposed on the trust |
|---|---|---|
| 1974 | $1,700 | $664 |
| 1975 | 10,900 | 5,200 |
| 1976 | 4,740 | 1,360 |
| 1977 | None | None |
| 1978 | 7,460 | 2,640 |
| 1979 | None | None |
(b) The undistributed net income of the trust determined under section 665(a) as of the close of 1974, is $12,840, computed as follows:
| Distributable net income | $20,100 |
| Less: Taxes imposed on the trust attributable to the undistributed net income | 7,260 |
| Undistributed net income as of the close of 1974 | 12,840 |
| Accumulation distribution | $5,420 |
| Taxes deemed distributed (5,420/ 12,840 × $7,260) | 3,064 |
| Total | 8,484 |
| Undistributed net income as of the close of 1974 | $12,840 |
| Less: 1975 accumulation distribution deemed distributed on December 31, 1974 (paragraph (c) of this example) | 5,420 |
| Undistributed net income for 1974 as of the close of 1975 | 7,420 |
| Taxes imposed on the trust attributable to undistributed net income as of the close of 1974 | $7,260 |
| Less: Taxes deemed distributed in 1974 | 3,064 |
| Taxes attributable to the undistributed net income determined as of the close of 1975 | 4,196 |
| Accumulation distribution | $5,420 |
| Taxes deemed distributed (5,420/ 7,420 × $4,196) | 3,064 |
| Total | 8,484 |
| Undistributed net income for 1974 as of the close of 1975 | $7,420 |
| Less: 1976 accumulation distribution deemed distributed on December 31, 1974 (paragraph (f) of this example) | 5,420 |
| Undistributed net income for 1974 as of the close of 1976 | 2,000 |
§ 1.666(d)-1A Information required from trusts.
(a) Adequate records required. For all taxable years of a trust, the trustee must retain copies of the trust’s income tax return as well as information pertaining to any adjustments in the tax shown as due on the return. The trustee shall also keep the records of the trust required to be retained by section 6001 and the regulations thereunder for each taxable year as to which the period of limitations on assessment of tax under section 6501 has not expired. If the trustee fails to produce such copies and records, and such failure is due to circumstances beyond the reasonable control of the trustee or any predecessor trustee, the trustee may reconstruct the amount of corpus, accumulated income, etc., from competent sources (including, to the extent permissible, Internal Revenue Service records). To the extent that an accurate reconstruction can be made for a taxable year, the requirements of this paragraph shall be deemed satisfied for such year.
(b) Rule when information is not available—(1) Accumulation distributions. If adequate records (as required by paragraph (a) of this section) are not available to determine the proper application of subpart D to an accumulation distribution made in a taxable year by a trust, such accumulation distribution shall be deemed to consist of undistributed net income earned during the earliest preceding taxable year (as defined in § 1.665(e)-1A) of the trust in which it can be established that the trust was in existence. If adequate records are available for some years, but not for others, the accumulation distribution shall be allocated first to the earliest preceding taxable year of the trust for which there are adequate records and then to each subsequent preceding taxable year for which there are adequate records. To the extent that the distribution is not allocated in such manner to years for which adequate records are available, it will be deemed distributed on the last day of the earliest preceding taxable year of the trust in which it is established that the trust was in existence and for which the trust has no records. The provisions of this subparagraph may be illustrated by the following example:
(2) Taxes. (i) If an amount is deemed under this paragraph to be undistributed net income allocated to a preceding taxable year for which adequate records are not available, there shall be deemed to be “taxes imposed on the trust” for such preceding taxable year an amount equal to the taxes that the trust would have paid if the deemed undistributed net income were the amount remaining when the taxes were subtracted from taxable income of the trust for such year. For example, assume that an accumulation distribution in 1975 of $100,000 is deemed to be undistributed net income from 1971, and that the taxable income required to produce $100,000 after taxes in 1971 would be $284,966. Therefore the amount deemed to be “taxes imposed on the trust” for such preceding taxable year is $184,966.
(ii) The credit allowed by section 667(b) shall not be allowed for any amount deemed under this subparagraph to be “taxes imposed on the trust.”
§ 1.666(a)-1 Amount allocated.
(a)(1) If a trust other than a foreign trust created by a U.S. person makes an accumulation distribution in any taxable year, the distribution is included in the beneficiary’s gross income for that year to the extent of the undistributed net income of the trust for the preceding 5 years. It is therefore necessary to determine the extent to which there is undistributed net income for the preceding 5 years. For this purpose, an accumulation distribution made in any taxable year is allocated to each of the 5 preceding taxable years in turn, beginning with the most recent year, to the extent of the undistributed net income of each of those years. Thus, an accumulation distribution is deemed to have been made from the most recently accumulated income of the trust.
(2) If a foreign trust created by a U.S. person makes an accumulation distribution in any year after December 31, 1962, the distribution is included in the beneficiary’s gross income for that year to the extent of the undistributed net income of the trust for the trust’s preceding taxable years which began after December 31, 1953, and ended after August 16, 1954. It is therefore necessary to determine the extent to which there is undistributed net income for such preceding taxable years. For this purpose, an accumulation distribution made in any taxable year is first allocated to each of such preceding taxable years in turn, beginning with the most recent year, to the extent of the undistributed net income of each of those years. Thus, an accumulation distribution is deemed to have been made from the most recently accumulated income of the trust.
(3) If a trust that is in part a foreign trust created by a U.S. person and in part a foreign trust created by a person other than a U.S. person makes an accumulation distribution in any year after December 31, 1962, the distribution is deemed made from the undistributed net income of the foreign trust created by a U.S. person in the proportion that the total undistributed net income for all preceding years of the foreign trust created by the U.S. person bears to the total undistributed net income for all years of the entire foreign trust. In addition, such distribution is deemed made from the undistributed net income of the foreign trust created by a person other than a U.S. person in the proportion that the total undistributed net income for all preceding years of the foreign trust created by a person other than a U.S. person bears to the total undistributed net income for all years of the entire foreign trust. Accordingly, an accumulation distribution of such a trust is composed of two portions with one portion relating to the undistributed net income of the foreign trust created by the U.S. person and the other portion relating to the undistributed net income of the foreign trust created by the person other than a U.S. person. For these purposes, each portion of an accumulation distribution made in any taxable year is first allocated to each of such preceding taxable years in turn, beginning with the most recent year, to the extent of the undistributed net income for the applicable foreign trust for each of those years. Thus, each portion of an accumulation distribution is deemed to have been made from the most recently accumulated income of the applicable trust. If the foreign trust created by a U.S. person makes an accumulation distribution in any year after December 31, 1962, the distribution is included in the beneficiary’s gross income for that year to the extent of the undistributed net income of the trust for the trust’s preceding taxable years which began after December 31, 1953, and ended after August 16, 1954. If the foreign trust created by a person other than a U.S. person makes an accumulation distribution in any taxable year, the distribution is included in the beneficiary’s gross income for that year to the extent of the undistributed net income of the trust for the preceding 5 years.
(b) If, before the application of the provisions of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code, to an accumulation distribution for the taxable year, there is no undistributed net income for a preceding taxable year, then no portion of the accumulation distribution is deemed distributed on the last day of such preceding taxable year. Thus, if an accumulation distribution is made during the taxable year 1960 and the trust had no undistributed net income for the taxable year 1959, then no portion of the 1960 accumulation distribution is deemed distributed on the last day of 1959. For purposes of subpart D, the term 5 preceding taxable years includes only the 5 taxable years immediately preceding the taxable year in which the accumulation distribution is made and which are subject to part I (section 641 and following) of such subchapter J even though the trust has no undistributed net income during one or more of those years.
(c) Paragraphs (a) and (b) of this section may be illustrated by the following examples:
| Year | Undistributed net income—portion of the trust created by a U.S. person | Undistributed net income—portion of the trust created by a person other than a U.S. person |
|---|---|---|
| 1963 | $20,000 | $10,000 |
| 1962 | 25,000 | 12,000 |
| 1961 | None | None |
| 1960 | 16,000 | 9,000 |
| 1959 | 17,000 | 8,000 |
| 1958 | 4,000 | 2,000 |
| 1957 | None | None |
| 1956 | 8,000 | 3,000 |
| 1955 | 11,000 | 5,000 |
| 1954 | None | None |
| 1953 | 12,000 | 7,000 |
| 1952 | 7,000 | 4,000 |
| Totals | 120,000 | 60,000 |
| Year | Throwback to preceding years of foreign trust created by a U.S. person | Throwback to preceding years of portion of the entire foreign trust which is not a foreign trust created by a U.S. person |
|---|---|---|
| 1963 | $20,000 | $10,000 |
| 1962 | 25,000 | 12,000 |
| 1961 | None | None |
| 1960 | 16,000 | 9,000 |
| 1959 | 17,000 | 8,000 |
| 1958 | 4,000 | 2,000 |
| 1957 | None | None |
| 1956 | 8,000 | 3,000 |
| 1955 | 10,000 | 5,000 |
| 1954 | None | None |
| 1953 | None | 1,000 |
| 1952 | None | None |
| Totals | 100,000 | 50,000 |
| Year | Undistributed net income—portion of the trust created by a U.S. person | Undistributed net income—portion of the trust created by a person other than a U.S. person |
|---|---|---|
| 1964 | $10,000 | $10,000 |
| 1963 | None | None |
| 1962 | None | None |
| 1961 | None | None |
| 1960 | None | None |
| 1959 | None | None |
| 1958 | None | None |
| 1957 | None | None |
| 1956 | None | None |
| 1955 | 1,000 | None |
| 1954 | None | None |
| 1953 | 12,000 | 6,000 |
| 1952 | 7,000 | 4,000 |
| Totals | 30,000 | 20,000 |
| Year | Throwback to preceding years of foreign trust created by U.S. person | Throwback to preceding years of portion of the entire foreign trust which is not a foreign trust created by a U.S. person |
|---|---|---|
| 1964 | $10,000 | $10,000 |
| 1963 | None | None |
| 1962 | None | None |
| 1961 | None | None |
| 1960 | None | None |
| 1959 | None | None |
| 1958 | None | None |
| 1957 | None | None |
| 1956 | None | None |
| 1955 | 1,000 | None |
| 1954 | None | None |
| 1953 | 4,000 | None |
| 1952 | None | None |
| Totals | 15,000 | 10,000 |
(d) For the purposes of allocating to any preceding taxable year an accumulation distribution of the taxable year, the undistributed net income of such preceding taxable year is computed without regard to the accumulation distribution of the taxable year or of taxable years following the taxable year. However, accumulation distributions of any taxable years intervening between such preceding taxable year and the taxable year are taken into account. Accordingly, if a trust has undistributed net income for the taxable year 1954 and makes an accumulation distribution during the taxable year 1955, the undistributed net income for 1954 is computed without regard to the accumulation distribution for 1955 or any subsequent year. If the trust makes a further accumulation distribution for 1956, the undistributed net income for 1954 is computed without regard to the accumulation distribution for 1956 or subsequent years; but in determining the undistributed net income for 1954 for purposes of the 1956 accumulation distribution the accumulation distribution for 1955 will be taken into account.
§ 1.666(b)-1 Total taxes deemed distributed.
(a) If an accumulation distribution is deemed under § 1.666(a)-1 to be distributed on the last day of a preceding taxable year and the amount is not less than the undistributed net income for such preceding taxable year, then an additional amount equal to the “taxes imposed on the trust” (as defined in § 1.665(d)-1) for such preceding taxable year is likewise deemed distributed under section 661(a)(2). For example, a trust has taxable income of $11,032 (not including any capital gains) and undistributed net income of $8,000 for the taxable year 1954. The taxes imposed on the trust are $3,032. During the taxable year 1955, an accumulation distribution of $8,000 is made to the beneficiary, which is deemed under § 1.666(a)-1 to have been distributed on the last day of 1954. The taxes imposed on the trust for 1954 of $3,032 are also deemed to have been distributed on the last day of 1954 since the 1955 accumulation distribution is not less than the 1954 undistributed net income. Thus, a total of $11,032 will be deemed to have been distributed on the last day of 1954 because of the accumulation distribution of $8,000 made in 1955.
(b) For the purpose of paragraph (a) of this section, the undistributed net income of any preceding taxable year is computed without regard to the accumulation distribution of the taxable year or any taxable year following such taxable year. However, any accumulation distribution of taxable years intervening between such preceding taxable year and the taxable year are taken into account. See paragraph (d) of § 1.666(a)-1 and paragraphs (f)(5) and (g)(1) of § 1.668(b)-2.
§ 1.666(c)-1 Pro rata portion of taxes deemed distributed.
(a) If an accumulation distribution is deemed under § 1.666(a)-1 to be distributed on the last day of a preceding taxable year and the amount is less than the undistributed net income for such preceding taxable year, then an additional amount is likewise deemed distributed under section 661(a)(2). The additional amount is equal to the taxes imposed on the trust, as defined in § 1.665(d)-1, for such preceding taxable year, multiplied by the fraction of which the numerator is the amount of the accumulation distribution and the denominator is the undistributed net income for such preceding taxable year. See paragraph (b) of example 1 and paragraphs (c) and (f) of example 2 in § 1.666(c)-2, and paragraph (f)(2) of § 1.668(b)-2 for illustrations of this paragraph.
(b) For the purpose of paragraph (a) of this section, the undistributed net income of any preceding taxable year is computed without regard to the accumulation distribution of the taxable year or any taxable year following the taxable year. However, accumulation distributions of any taxable years intervening between such preceding taxable year and the taxable year are taken into account. See paragraph (d) of § 1.666(a)-1, paragraph (c) of example 1 and paragraphs (e) and (h) of example 2 in § 1.666(c)-2 and paragraph (f)(5)(iii) of § 1.668(b)-2.
§ 1.666(c)-2 Illustration of the provisions of section 666.
The application of the provisions of §§ 1.666(a)-1, 1.666(b)-1, and 1.666(c)-1 may be illustrated by the following examples:
| Year | Undistributed portion of distributable net income | Taxes imposed on the trust | Undistributed net income |
|---|---|---|---|
| 1958 | $12,100 | $3,400 | $8,700 |
| 1957 | 16,100 | 5,200 | 10,900 |
| 1956 | 6,100 | 1,360 | 4,740 |
| 1955 | None | None | None |
| 1954 | 10,100 | 2,640 | 7,460 |
(c) In allocating the accumulation distribution for 1960, the undistributed net income for 1958 will take into account the accumulation distribution for 1959, and the additional amount of taxes imposed on the trust for 1958 deemed distributed. The undistributed net income for 1958 will then be $1,906; and the taxes imposed on the trust for 1958 will then be $458, determined as follows:
| Undistributed portion of distributable net income as of the close of 1958 | $12,100 | |
| Less: | ||
| Accumulation distribution (1959) | $7,000 | |
| Taxes deemed distributed under section 666(c) (7,000/8,700 × $3,400) | 2,736 | |
| 9,736 | ||
| Balance (undistributed portion of distributable net income as of the close of 1959) | 2,364 | |
| Less: Personal exemption | 100 | |
| Balance | 2,264 | |
| Taxes imposed on the trust (income taxes on $2,264) | 458 | |
| Undistributed portion of distributable net income as of the close of 1959 | 2,364 | |
| Less: Income taxes attributable thereto | 458 | |
| Undistributed net income for 1958 as of the close of 1959 | 1,906 | |
| Year | Undistributed net income | Taxes imposed on the trust |
|---|---|---|
| 1959 | None | None |
| 1958 | $1,906 | $458 |
| 1957 | 10,900 | 5,200 |
| 1956 | 4,740 | 1,360 |
| 1955 | None | None |
(b) The undistributed net income of the trust determined under section 665(a) as of the close of 1954, is $12,840, computed as follows:
| Distributable net income | $20,100 |
| Less: Taxes imposed on the trust | 7,260 |
| Undistributed net income as of the close of 1954 | 12,840 |
| Accumulation distribution | $6,420 |
| Taxes deemed distributed (6,420/ 12,840 × $7,260) | 3,630 |
| Total | 10,050 |
| Distributable net income as of the close of 1954 | $20,100 |
| Less: 1955 accumulation distribution and taxes deemed distributed on December 31, 1954 (paragraph (c) of this example) | 10,050 |
| Undistributed portion of the 1954 distributable net income adjusted as of the close of 1955 | 10,050 |
| Less: Personal exemption | 100 |
| Balance | 9,950 |
| Income taxes on $9,950 | 2,623 |
| Undistributed portion of distributable net income as of the close of 1955 | $10,050 |
| Less: Income taxes applicable thereto | 2,623 |
| Undistributed net income determined as of the close of 1955 | 7,427 |
| Accumulation distribution | $6,420 |
| Taxes deemed distributed (6,420/ 7,427 × $2,623) | 2,267 |
| Total | 8,687 |
| Undistributed portion of distributable net income as of the close of 1955 | $10,050 |
| Less: 1956 accumulation distribution and taxes deemed distributed on December 31, 1954 (paragraph (f) of this example) | 8,687 |
| Undistributed portion of distributable net income as of the close of 1956 | 1,363 |
| Less: Personal exemption | 100 |
| Balance | 1,263 |
| Income taxes on $1,263 | 253 |
§ 1.667-1 Denial of refund to trusts.
(a) If an amount is deemed under section 666 to be an amount paid, credited, or required to be distributed on the last day of a preceding taxable year, the trust is not allowed a refund or credit of the amount of “taxes imposed on the trust”, as defined in § 1.665(d)-1, which would not have been payable for the preceding taxable year had the trust in fact made such distribution on the last day of such year. However, such taxes are allowed as a credit under section 668(b) against the tax of the beneficiaries who are treated as having received the distributions in the preceding taxable year. The amount of taxes which may not be refunded or credited to the trust under this paragraph and which are allowed as a credit under section 668(b) against the tax of the beneficiaries, is an amount equal to the excess of:
(1) The taxes imposed on the trust (as defined in section 665(d) and § 1.655(d)-1) for any preceding taxable year (computed without regard to the accumulation distribution for the taxable year) over
(2) The amount of taxes for such preceding taxable year which would be imposed on the undistributed portion of distributable net income of the trust for such preceding taxable year after the application of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code, on account of the accumulation distribution determined for the taxable year.
(b) Paragraph (a) of this section may be illustrated by the following examples:
| Accumulation distribution in 1955 | $5,000 | |
| Taxes deemed distributed under section 666(c) (5,000/8,840 × $6,160) | 3,484 | |
| Total amount deemed distributed out of the undistributed portion of distributable net income | 8,484 | |
| Tax attributable to the undistributed portion of distributable net income ($15,000) before 1955 distribution (see example 1 of this paragraph) | 6,160 | |
| Tax on $11,516 (taxable income of $20,000 minus $8,484, amount deemed distributed) | $3,216 | |
| Tax on $5,000 (capital gains of $5,100, less personal exemption of $100, allocable to corpus) | 1,100 | |
| Tax attributable to undistributed portion of distributable net income after 1955 distribution | 2,116 | |
| Refund disallowed to the trust and credit available to A in 1955 | 4,044 | |
§ 1.667(a)-1A [Reserved]
§ 1.667(b)-1A Authorization of credit to beneficiary for taxes imposed on the trust.
(a) Determination of credit—(1) In general. Section 667(b) allows under certain circumstances a credit (without interest) against the tax imposed by subtitle A of the Code on the beneficiary for the taxable year in which the accumulation distribution is required to be included in income under section 668(a). In the case of an accumulation distribution consisting only of undistributed net income, the amount of such credit is the total of the taxes deemed distributed to such beneficiary under section 666 (b) and (c) as a result of such accumulation distribution for preceding taxable years of the trust on the last day of which such beneficiary was in being, less the amount of such taxes for such preceding taxable years taken into account in reducing the amount of partial tax determined under § 1.668(b)-1A. In the case of an accumulation distribution consisting only of undistributed capital gain, the amount of such credit is the total of the taxes deemed distributed as a result of the accumulation distribution to such beneficiary under section 669 (d) and (e) for preceding taxable years of the trust on the last day of which such beneficiary was in being, less the amount of such taxes for such preceding taxable years taken into account in reducing the amount of partial tax determined under § 1.669(b)-1A. In the case of an accumulation distribution consisting of both undistributed net income and undistributed capital gain, a credit will not be available unless the total taxes deemed distributed to the beneficiary for all preceding taxable years as a result of the accumulation distribution exceeds the beneficiary’s partial tax determined under §§ 1.668(b)-1A and 1.669(b)-1A without reference to the taxes deemed distributed. A credit is not allowed for any taxes deemed distributed as a result of an accumulation distribution to a beneficiary by reason of sections 666 (b) and (c) or sections 669 (d) and (e) for a preceding taxable year of the trust before the beneficiary was born or created. However, if as a result of an accumulation distribution the total taxes deemed distributed under sections 668(a)(2) and 668(a)(3) in preceding taxable years before the beneficiary was born or created exceed the partial taxes attributable to amounts deemed distributed in such years, such excess may be used to offset any liability for partial taxes attributable to amounts deemed distributed as a result of the same accumulation distribution in preceding taxable years after the beneficiary was born or created.
(2) Exact method. In the case of the tax computed under the exact method provided in §§ 1.668(b)-1A(b) and 1.669(b)-1A(b), the credit allowed by this section is computed as follows:
(i) Compute the total taxes deemed distributed under §§ 1.666(b)-1A and 1.666(c)-1A or §§ 1.669(d)-1A and 1.669(e)-1A, whichever are appropriate, for the preceding taxable years of the trust on the last day of which the beneficiary was in being.
(ii) Compute the total of the amounts of tax determined under § 1.668(b)-1A(b)(1) or § 1.669(b)-1A(b) (1), whichever is appropriate, for the prior taxable years of the beneficiary in which he was in being.
(3) Short-cut method. In the case of the tax computed under the short-cut method provided in § 1.668(b)-1A(c) or § 1.669(b)-1A(c), the credit allowed by this section is computed as follows:
(i) Compute the total taxes deemed distributed in all preceding taxable years of the trust under §§ 1.666(b)-1A and 1.666(c)-1A or §§ 1.669(d)-1A and 1.669(e)-1A, whichever are appropriate.
(ii) Compute the beneficiary’s partial tax determined under either § 1.668(b)-1A(c)(1)(v) or § 1.669(b)-1A (c)(1)(v), whichever is appropriate.
(iii) Compute the total taxes deemed distributed under §§ 1.666(b)-1A and 1.666(c)-1A or §§ 1.669(d)-1A and 1.669(e)-1A, which are appropriate, for the preceding taxable years of the trust on the last day of which the beneficiary was in being.
(iv) Multiply the amount by which subdivision (i) of this subparagraph exceeds subdivision (ii) of this subparagraph by a fraction, the numerator of which is the amount determined under subdivision (iii) of this subparagraph and the denominator of which is the amount determined under subdivision (i) of this subparagraph. The result is the allowable credit. The application of this subparagraph may be illustrated by the following example:
(b) Year of credit. The credit to which a beneficiary is entitled under this section is allowed for the taxable year in which the accumulation distribution (to which the credit relates) is required to be included in the income of the beneficiary under section 668(a). Any excess over the total tax liability of the beneficiary for such year is treated as an overpayment of tax by the beneficiary. See section 6401(b) and the regulations thereunder.
§ 1.668(a)-1A Amounts treated as received in prior taxable years; inclusion in gross income.
(a) Section 668(a) provides that the total of the amounts treated under sections 666 and 669 as having been distributed by the trust on the last day of a preceding taxable year of the trust shall be included in the income of the beneficiary or beneficiaries receiving them. The total of such amounts is includable in the income of each beneficiary to the extent the amounts would have been included under section 662 (a)(2) and (b) as if the total had actually been an amount properly paid by the trust under section 661 (a)(2) on the last day of such preceding taxable year. The total is included in the income of the beneficiary for the taxable year of the beneficiary in which such amounts are in fact paid, credited, or required to be distributed unless the taxable year of the beneficiary differs from the taxable year of the trust (see section 662(c) and the regulations thereunder). The character of the amounts treated as received by a beneficiary in prior taxable years, including taxes deemed distributed, in the hands of the beneficiary is determined by the rules set forth in section 662(b) and the regulations thereunder.
(b) Any deduction allowed to the trust in computing distributable net income for a preceding taxable year (such as depreciation, depletion, etc.) is not deemed allocable to a beneficiary because of amounts included in a beneficiary’s gross income under this section since the deduction has already been utilized in reducing the amount included in the beneficiary’s income.
(c) For purposes of applying section 668(a)(3), a trust shall be considered to be other than a “trust which is not required to distribute all of its income currently” for each taxable year prior to the first taxable year beginning after December 31, 1968, and ending after November 30, 1969, in which income is accumulated. Income will not be deemed to have been accumulated for purposes of applying section 668(a)(3) in a year if the trustee makes a determination, as evidenced by a statement on the return, to distribute all of the trust’s income for such year and also makes a good faith determination as to the amount of such income and actually distributed for such year the entire amount so determined. The term “income,” as used in the preceding two sentences, is defined in §§ 1.643(b)-1 and 1.643(b)-2. Since, under such definitions, certain items may be included in distributable net income but are not, under applicable local law, “income” (as, for example, certain extraordinary dividends), a trust that has undistributed net income from such sources might still qualify as a trust that has not accumulated income. Also, for example, if a trust establishes a reserve for depreciation or depletion and applicable local law permits the deduction for such reserve in the computation of “income,” amounts so added to the reserve do not constitute an accumulation of income. If a trust has separate shares, and any share accumulates income, all shares of the trust will be considered to have accumulated income for purposes of section 668(a)(3). Amounts retained by a trust or a portion of a trust that is subject to subpart E (sections 671-678) shall not be considered accumulated income.
(d) See section 1302(a)(2)(B) to the effect that amounts included in the income of a beneficiary of a trust under section 668(a) are not eligible for income averaging.
§ 1.668(a)-2A Allocation among beneficiaries; in general.
The portion of the total amount includible in income under § 1.668(a)-1A which is includible in the income of a particular beneficiary is based upon the ratio determined under the second sentence of section 662(a)(2) for the taxable year (and not for the preceding taxable year). This section may be illustrated by the following example:
(b) For the purposes of determining the amounts includible in the beneficiaries’ gross income for 1975, the trust is deemed to have made the following distributions:
| Amount distributed out of 1975 income (distributable net income) | $10,000 |
| Accumulation distribution deemed distributed by the trust on the last day of 1973 under section 666(a) | 5,000 |
| Taxes imposed on the trust attributable to the undistributed net income deemed distributed under section 666(b) | 1,100 |
(d) B will include in his income for 1975 one-third of each item shown in paragraph (b) of this example, computed in the manner shown in paragraph (c) of this example.
(e) To the extent the total accumulation distribution consists of undistributed net income and undistributed capital gain, A and B shall be treated as receiving a pro rata share of each for the preceding taxable year 1973.
§ 1.668(a)-3A Determination of tax.
In a taxable year in which an amount is included in a beneficiary’s income under § 1.668(a)-1A(a), the tax on the beneficiary for such taxable year is determined only as provided in section 668 and consists of the sum of:
(a) A partial tax computed on (1) the beneficiary’s taxable income reduced by (2) an amount equal to the total amounts includible in his income under § 1.668(a)-1A(a), at the rate and in the manner as if section 668 had not been enacted,
(b) A partial tax determined as provided in § 1.668(b)-1A, and
(c) In the case of a beneficiary of a trust which is not required to distribute all of its income currently, a partial tax determined as provided in § 1.669(b)-1A.
§ 1.668(b)-1A Tax on distribution.
(a) In general. The partial tax imposed on the beneficiary by section 668(a)(2) shall be the lesser of:
(1) The tax computed under paragraph (b) of this section (the “exact” method), or
(2) The tax computed under paragraph (c) of this section (the “short-cut” method),
(b) Computation of partial tax by the exact method. The partial tax referred to in paragraph (a)(1) of this section is computed as follows:
(1) First, compute the tax attributable to the section 666 amounts for each of the preceding taxable years. For purposes of this paragraph, the “section 666 amounts” for a preceding taxable year are the amounts deemed distributed under section 666(a) on the last day of the preceding taxable year, plus the amount of taxes deemed distributed on such day under section 666 (b) or (c). The tax attributable to such amounts in each prior taxable year of the beneficiary is the difference between the tax for such year computed with the inclusion of the section 666 amounts in the beneficiary’s gross income and the tax for such year computed without including them in such gross income. Tax computations for each such year shall reflect a taxpayer’s marital, dependency, exemption, and filing status for such year. To the extent the undistributed net income of a trust deemed distributed in an accumulation distribution includes amounts received as an accumulation distribution from another trust, for purposes of this paragraph they shall be considered as amounts deemed distributed by the trust under section 666(a) on the last day of each of the preceding taxable years in which such amounts were accumulated by such other trust. For example, assume trust Z, a calendar year trust, received in its taxable year 1975 an accumulation distribution from trust Y, a calendar year trust, that included undistributed net income and taxes of trust Y for the taxable years 1972, 1973, and 1974. To the extent an accumulation distribution made by trust Z in its taxable year 1976 includes such undistributed net income and taxes, it shall be considered an accumulation distribution by trust Z in the taxable year 1976 and under section 666(a) will be deemed distributed on the last day of the preceding taxable years 1972, 1973, and 1974.
(2) From the sum of the taxes for the prior taxable years attributable to the section 666 amounts (computed in accordance with subparagraph (1) of this paragraph), subtract so much of the amount of taxes deemed distributed to the beneficiary under §§ 1.666(b)-1A and 1.666(c)-1A as does not exceed such sum. The resulting amount, if any, is the partial tax, computed under the exact method, for the taxable year in which the accumulation distribution is paid, credited, or required to be distributed to the beneficiary.
(3) The provisions of this paragraph may be illustrated by the following example:
(ii) A, the beneficiary, had taxable income and paid income tax in 1971-73 as follows:
| Year | Taxable income | Tax |
|---|---|---|
| 1971 | $10,000 | $2,190 |
| 1972 | 12,000 | 2,830 |
| 1973 | 14,000 | 3,550 |
| 1971 | ||
| Taxable income including section 666 amounts ($10,000 + $5,000 + $935) | $15,935 | |
| Tax on $15,935 | $4,305 | |
| Less: Tax paid by A in 1971 | 2,190 | |
| Tax attributable to 1971 section 666 amounts | 2,115 | |
| 1972 | ||
| Taxable income including section 666 amounts ($12,000 + $4,000 + $715) | $16,715 | |
| Tax on $16,715 | $4,620 | |
| Less: Tax paid by A in 1972 | 2,830 | |
| Tax attributable to 1972 section 666 amounts | 1,790 | |
| 1973 | ||
| Taxable income including section 666 amounts ($14,000 + $6,000 + $1,155) | $21,155 | |
| Tax on $21,155 | $6,624 | |
| Less: Tax paid by A in 1973 | 3,550 | |
| Tax attributable to 1973 section 666 amounts | 3,074 | |
| Total tax attributable to section 666 amounts: | ||
| 1971 | $2,115 | |
| 1972 | 1,790 | |
| 1973 | 3,074 | |
| Total | 6,979 | |
(c) Computation of tax by the short- cut method. (1) The tax referred to in paragraph (a)(2) of this section is computed as follows:
(i) First, determine the number of preceding taxable years of the trust on the last day of which an amount is deemed under section 666(a) to have been distributed. For purposes of the preceding sentence, the preceding taxable years of a trust that has received an accumulation distribution from another trust shall include the taxable years of such other trust in which an amount was deemed distributed in such accumulation distribution. For example, assume trust Z, a calendar year trust, received in its taxable year 1975 an accumulation distribution from trust Y, a calendar year trust, that included undistributed net income of trust Y for the taxable years 1972, 1973, and 1974. To the extent an accumulation distribution made by trust Z in its taxable year 1976 includes such undistributed net income, it shall be considered an accumulation distribution by trust Z in the taxable year 1976 and under section 666(a) will be deemed distributed on the last day of the preceding taxable years 1972, 1973, and 1974. For purposes of this subparagraph, such number of preceding taxable years of the trust shall not include any preceding taxable year of the trust in which the undistributed net income deemed distributed is less than 25 percent of (a) the total amounts deemed under section 666(a) to be undistributed net income from preceding taxable years divided by (b) the number of such preceding taxable years of the trust on the last day of which an amount is deemed under section 666(a) to have been distributed without application of this sentence. For example, assume that an accumulation distribution of $90,000 made to a beneficiary in 1979 is deemed distributed in the amounts of $29,000 in each of the years 1972, 1973, and 1974, and $3,000 in 1975. The number of preceding taxable years on the last day of which an amount was deemed distributed without reference to the second sentence of this subparagraph is four. However, the distribution deemed made in 1975 ($3,000) is less than $5,625, which is 25 percent of (a) the total undistributed net income deemed distributed under section 666(a) ($90,000) divided by (b) the number of such preceding taxable years (4), or $22,500. Therefore, for purposes of this subparagraph the accumulation distribution is deemed distributed in only 3 preceding taxable years (1972, 1973, and 1974).
(ii) Second, divide the amount (representing the accumulation distribution and taxes deemed distributed) required under section 668(a) to be included in the income of the beneficiary for the taxable year by the number of preceding taxable years of the trust on the last day of which an amount is deemed under section 666(a) to have been distributed (determined as provided in subdivision (i) of this subparagraph). The amount determined under this subdivision, including taxes deemed distributed, consists of the same proportion of each class of income as the total of each class of income deemed distributed in the accumulation distribution bears to the total undistributed net income from such preceding taxable years deemed distributed in the accumulation distribution. For example, assume that an amount of $50,000 is deemed distributed under section 666(a) from undistributed net income of 5 preceding taxable years of the trust, and consists of $25,000 of interest, $15,000 of dividends, and $10,000 of net rental income. Taxes attributable to such amounts in the amount of $10,000 are also deemed distributed. The amount determined under this subdivision, $12,000 ($50,000 income plus $10,000 tax divided by 5 years), is deemed to consist of $6,000 in interest, $3,600 in dividends, and $2,400 in net rental income.
(iii) Third, compute the tax of the beneficiary for each of the 3 taxable years immediately preceding the year in which the accumulation distribution is paid, credited, or required to be distributed to him,
(a) With the inclusion in gross income of the beneficiary for each of such 3 years of the amount determined under subdivision (ii) of this subparagraph, and
(b) Without such inclusion.
(iv) Fourth, add the additional taxes resulting from the application of subdivision (iii) of this subparagraph and then divide this amount by 3. For example, if these additional taxes are $4,000, $5,000, and $6,000 for the 3 preceding taxable years, this amount would be $5,000 ($4,000 + $5,000 + $6,000 divided by 3).
(v) Fifth, the resulting amount is then multiplied by the number of preceding taxable years of the trust on the last day of which an amount is deemed under section 666(a) to have been distributed (previously determined under subdivision (i) of this subparagraph). For example, if an amount is deemed distributed for 5 preceding taxable years, the resulting amount would be five times the $5,000 amount.
(vi) Sixth, the resulting amount, less so much of the amount of taxes deemed distributed to the beneficiary under §§ 1.666(b)-1A and 1.666(c)-1A as does not exceed such resulting amount, is the tax under the short-cut method provided in section 668(b)(1)(B).
(2) The computation of the tax by the short-cut method may be illustrated by the following example:
| 1980 | $350 |
| 1979 | 300 |
| 1978 | 250 |
| Total | 900 |
(d) Disallowance of short-cut method. If, in any prior taxable year of the beneficiary in which any part of the accumulation distribution of undistributed net income is deemed to have been distributed under section 666(a) to such beneficiary, any part of prior accumulation distributions of undistributed net income by each of two or more other trusts is deemed under section 666(a) to have been distributed to such beneficiary, then the short-cut method under paragraph (c) of this section may not be used and the partial tax imposed by section 668(a)(2) shall be computed only under the exact method under paragraph (b) of this section. For example, assume that, in 1978, trust X makes an accumulation distribution of undistributed net income to A, who is on the calendar year basis, and part of the accumulation distribution is deemed under section 666(a) to have been distributed on March 31, 1974. In 1977, A had received an accumulation distribution of undistributed net income from both trust Y and trust Z. Part of the accumulation distribution from trust Y was deemed under section 666(a) to have been distributed to A on June 30, 1974, and part of the accumulation distribution from trust Z was deemed under section 666(a) to have been distributed to A on December 31, 1974. Because there were portions of accumulation distributions of undistributed net income from two other trusts deemed distributed within the same prior taxable year of A (1974), the 1978 accumulation distribution from trust X may not be computed under the short-cut method provided in paragraph (c) of this section. Therefore the exact method under paragraph (b) of this section must be used to compute the tax imposed by section 666(a)(2).
§ 1.668(b)-2A Special rules applicable to section 668.
(a) Rule when beneficiary not in existence on the last day of a taxable year. If a beneficiary was not in existence on the last day of a preceding taxable year of the trust with respect to which a distribution is deemed made under section 666(a), it shall be assumed, for purposes of the computations under paragraphs (b) and (c) of § 1.668(b)-1A, that the beneficiary:
(1) Was in existence on such last day,
(2) Was a calendar year taxpayer,
(3) Had no gross income other than the amounts deemed distributed to him from such trust in his calendar year in which such last day occurred and from all other trusts from which amounts are deemed to have been distributed to him in such calendar year,
(4) If an individual, was unmarried and had no dependents,
(5) Had no deductions other than the standard deduction, if applicable, under section 141 for such calendar year, and
(6) Was entitled to the personal exemption under section 151 or 642(b).
(b) Effect of other distributions. The income of the beneficiary, for any of his prior taxable years for which a tax is being recomputed under § 1.668(b)-1A, shall include any amounts of prior accumulation distributions (including prior capital gain distributions) deemed distributed under sections 666 and 669 in such prior taxable year. For purposes of the preceding sentence, a “prior accumulation distribution” is a distribution from the same or another trust which was paid, credited, or required to be distributed in a prior taxable year of the beneficiary. The term “prior accumulation distribution” also includes accumulation distributions of other trusts which were paid, credited, or required to be distributed to the beneficiary in the same taxable year and which the beneficiary has determined under paragraph (c) of this section to treat as having been distributed before the accumulation distribution for which tax is being computed under § 1.668(b)-1A. Any capital gain distribution from the same trust paid, credited, or required to be distributed in the same taxable year of the beneficiary shall not be considered under this paragraph to be a “prior capital gain distribution.”
(c) Multiple distributions in the same taxable year. For purposes of paragraph (b) of this section, accumulation distributions made from more than one trust in the same taxable year of the beneficiary, regardless of when in the taxable year they were actually made, shall be treated as having been made consecutively, in whichever order the beneficiary may determine. However, the beneficiary must treat them as having been made in the same order for the purpose of computing the partial tax on the several accumulation distributions. The beneficiary shall indicate the order he has determined to deem the accumulation distributions to have been received by him on his return for the taxable year. A failure by him so to indicate, however, shall not affect his right to make such determination. The purpose of this rule is to assure that the tax resulting from the later (as so deemed under this paragraph) distribution is computed with the inclusion of the earlier distribution in the taxable base and that the tax resulting from the earlier (as so deemed under this paragraph) distribution is computed with the later distribution excluded from the taxable base.
(d) Examples. The provisions of paragraphs (b) and (c) of this section may be illustrated by the following examples:
§ 1.668(b)-3A Computation of the beneficiary’s income and tax for a prior taxable year.
(a) Basis for computation. (1) The beneficiary’s income and tax paid for any prior taxable year for which a recomputation is involved under either the exact method or the short-cut method shall be determined by reference to the information required to be furnished by him under § 1.668(b)-4A(a). The gross income, related deductions, and taxes paid for a prior taxable year of the beneficiary as finally determined shall be used for computation purposes. The term “as finally determined” has reference to the final status of the gross income, deductions, credits, and taxes of the taxable year after the expiration of the period of limitations or after completion of any court action regarding the tax for the taxable year.
(2) If any computations rely on the beneficiary’s return for a prior taxable year for which the applicable period of limitations on assessment under section 6501 has expired, and such return shows a mathematical error on its face which resulted in the wrong amount of tax being paid for such year, the determination of both the tax for such year computed with the inclusion of the section 666 amount in the beneficiary’s gross income and the tax for such year computed without including such amounts in such gross income shall be based upon the return after the correction of such mathematical errors, and the beneficiary shall be credited for the correct amount of tax that should have been properly paid.
(b) Effect of allocation of undistributed net income on items based on amount of income and with respect to a net operating loss, a charitable contributions carryover, or a capital loss carryover. (1) In computing the tax for any taxable year under either the exact method or the short-cut method, any item which depends upon the amount of gross income, adjusted gross income, or taxable income shall be recomputed to take into consideration the amount of undistributed net income allocated to such year. For example, if $1,000 of undistributed net income is allocated to 1970, adjusted gross income for 1970 is increased from $5,000 to $6,000. The allowable 50 percent charitable deduction under section 170(b)(1)(A) is then increased and the amount of the nondeductible medical expenses under section 213 (3 percent of adjusted gross income) is also increased.
(2) In computing the tax attributable to the undistributed net income deemed distributed to the beneficiary in any of his prior taxable years under either the exact method or the short-cut method, the effect of amounts of undistributed net income on a net operating loss carryback or carryover, a charitable contributions carryover, or a capital loss carryback or carryover, shall be taken into account. In determining the amount of tax attributable to such deemed distribution, a computation shall also be made for any taxable year which is affected by a net operating loss carryback or carryover, by a charitable contributions carryover, or by a capital loss carryback or carryover determined by reference to the taxable year to which amounts are allocated under either method and which carryback or carryover is reduced or increased by such amounts so allocated. The provisions of this subparagraph may be illustrated by the following example:
| Year | Actual income (or loss) | Income after net operating loss carryback (n.o.l.c.b.) |
|---|---|---|
| 1972 | $10,000 | $0 |
| 1973 | 50,000 | 0 |
| 1974 | 50,000 | 10,000 |
| 1975 | (100,000) | 0 |
| Year | Income deemed to have been earned after consideration of n.o.l.c.b., and accumulation distribution |
|---|---|
| 1972 | 0 ($10,000 + $50,000−$60,000 n.o.l.c.b.). |
| 1973 | $10,000 ($50,000−$40,000 balance of n.o.l.c.b.). |
| 1974 | $50,000. |
| 1975 | 0. |
(c) Averaging. A beneficiary who uses the exact method may recompute his tax for a prior taxable year by using income averaging for all of his actual income for that year, plus the amount deemed distributed in that year under section 666, even though he may not have actually used section 1301 to determine his income tax for such taxable year. For purposes of such recomputation, the beneficiary’s income for all other taxable years involved must include any amounts deemed distributed in such years from the current and all prior accumulation distributions. See § 1.668(b)-4A(c)(3) for additional information requirements. The beneficiary may not apply the provisions of this paragraph to a taxable year in which an amount is deemed to be income by reason of § 1.666(d)-1A(b). The accumulation distribution itself is not eligible for income averaging in the years in which it is paid, credited, or required to be distributed. See section 1302 (a)(2)(B) and the regulations thereunder.
§ 1.668(b)-4A Information requirements with respect to beneficiary.
(a) Information to be supplied by beneficiary—(1) In general. The beneficiary must supply the information required by subparagraph (3) of this paragraph for any prior taxable year for which a recomputation is required under either the exact method or the short-cut method. Such information shall be filed with the beneficiary’s return for the year in which the tax under section 668(a)(2) is imposed.
(2) Failure to furnish. If the beneficiary fails to furnish the information required by this paragraph for any prior year involved in the exact method, he may not use such method and the tax computed under paragraph (c) of § 1.668(b)-1A (the short-cut method) shall be deemed to be the amount of partial tax imposed by section 668(a)(2). See, however, paragraph (b) of this section for an exception to this rule where the short-cut method is not permitted. If he cannot furnish the information required for a prior year involved in the short-cut method, such year will be recomputed on the basis of the best information available.
(3) Information required. The beneficiary shall file the following items with his income tax return for the taxable year in which the accumulation distribution is included in income:
(i) A statement showing the gross income, adjustments, deductions, credits, taxes paid, and computations for each of his taxable years for which a computation is required under the method by which he computes his partial tax imposed by section 668(a)(2). Such statement shall include such amounts for the taxable year as adjusted by any events subsequent to such year, such as any adjustment resulting from the determination of a deficiency or an overpayment, or from a court action regarding the tax.
(ii) A copy of the statement required by this subparagraph to be furnished by the beneficiary for any prior taxable year in which an accumulation distribution was received by him which was also deemed distributed in whole or in part in the prior taxable year for which the statement under subdivision (i) of this subparagraph is required.
(iii) A copy of any statements furnished the beneficiary by the trustee (such as schedules E and J of Form 1041, etc.) with regard to the current taxable year or any prior taxable year for which a statement is furnished under subdivision (i) of this subparagraph.
(b) Exception. If by reason of § 1.668(b)-1A(e) the beneficiary may not compute the partial tax on the accumulation distribution under § 1.668(b)-1A(c) (the short-cut method), the provisions of subparagraph (2) of paragraph (a) of this section shall not apply. In such case, if the beneficiary fails to provide the information required by subparagraph (3) of paragraph (a) of this section for any prior taxable year, the district director shall, by utilizing whatever information is available to him (including information supplied by the beneficiary), determine the beneficiary’s income and related expenses for such prior taxable year.
(c) Records to be supplied by the beneficiary—(1) Year when return was filed. If the beneficiary filed an income tax return for a taxable year for which a recomputation is necessary, and the period of limitations on assessment under section 6501 for such year has expired as of the filing of the return for the year in which the accumulation distribution was made, then a copy of such return, plus proof of any changes of liability for such year due to the determination of a deficiency or an overpayment, court action, etc., shall, to the extent they verify the statements required under paragraph (a) of this section, serve as proof of such statements. If the period of limitations on assessment under section 6501 for a prior taxable year has not expired as of the filing of the beneficiary’s return for the year in which the accumulation distribution was received, then the records required by section 6001 to be retained by the beneficiary for such prior taxable year shall serve as the basis of proof of the statements required to be filed under paragraph (a) of this section.
(2) Year for which no return was filed. If the beneficiary did not file a return for a taxable year for which a recomputation is necessary, he shall be deemed to have had in such year, in the absence of proof to the contrary, gross income in the amount equal to the maximum amount of gross income that he could have received without having had to file a return under section 6012 for such year.
(3) Distributions deemed averaged. In order for a beneficiary to use income averaging with respect to a prior taxable year (see § 1.668(b)-3A(c)), he must furnish all the information that would support the computation under section 1301 as if the distribution were actually received and averaged in such prior taxable year, even if a portion of the information relates to years in which no amount was deemed distributed to the beneficiary.
§ 1.668(a)-1 Amounts treated as received in prior taxable years; inclusion in gross income.
(a) Section 668(a) provides that the total of the amounts treated under section 666 as having been distributed by the trust on the last day of a preceding taxable year of the trust shall be included in the gross income of the beneficiary or beneficiaries receiving them. The total of such amounts is includible in the gross income of each beneficiary to the extent the amounts would have been included under section 662 (a)(2) and (b) if the total had actually been paid by the trust on the last day of such preceding taxable year. The total is included in the gross income of the beneficiary for the taxable year of the beneficiary in which such amounts are in fact paid, credited, or required to be distributed unless the taxable year of the beneficiary differs from the taxable year of the trust (see section 662(c) and the regulations thereunder). The character of the amounts treated as received by a beneficiary in prior taxable years, including taxes deemed distributed, in the hands of the beneficiary is determined by the rules set forth in section 662(b) and the regulations thereunder. See paragraphs (h)(1)(ii) and (j)(1)(ii) of § 1.668(b)-2.
(b) The total of the amounts treated under section 666 as having been distributed by the trust on the last day of a preceding taxable year of the trust are included as prescribed in paragraph (a) of this section in the gross income of the beneficiary even though as of that day the beneficiary would not have been entitled to receive them had they actually been distributed on that day.
(c) Any deduction allowed to the trust in computing distributable net income for a preceding taxable year (such as depreciation, depletion, etc.) is not deemed allocable to a beneficiary because of amounts included in a beneficiary’s gross income under this section since the deduction has already been utilized in reducing the amount included in the beneficiary’s income.
§ 1.668(a)-2 Allocation among beneficiaries; in general.
The portion of the total amount includible in gross income under § 1.668 (a)-1 which is includible in the gross income of a particular beneficiary is based upon the ratio determined under the second sentence of section 662(a)(2) for the taxable year (and not for the preceding taxable year). This section may be illustrated by the following example:
(b) For the purposes of determining the amounts includible in the beneficiaries’ gross income for 1955, the trust is deemed to have made the following distributions:
| Amount distributed out of 1955 income (distributable net income) | $10,000 |
| Accumulation distribution deemed distributed by the trust on the last day of 1954 under section 666(a) | 5,000 |
| Taxes imposed on the trust deemed distributed under section 666(b) | 1,100 |
(d) B will include in his gross income for 1955 one-third of each item shown in paragraph (b) of this example, computed in the manner shown in paragraph (c) of this example.
§ 1.668(a)-3 Excluded amounts.
When a trust pays, credits, or is required to distribute to a beneficiary amounts which are excluded under section 665(b) (1), (2), (3), or (4) from the computation of an accumulation distribution, the amount includible under subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code, in the gross income of the beneficiaries pursuant to § 1.668(a)-1 is first allocated to the beneficiaries as provided in § 1.668(a)-2 and, second, the amount allocable to the beneficiary receiving amounts which are excluded under section 665(b) (1), (2), (3), or (4) is reduced by the excluded amounts. This section may be illustrated by the following examples, in which it is assumed the trusts and beneficiaries report on the calendar year basis and the income of the trusts was derived entirely from taxable interest:
(b) Since each beneficiary received one-half of the total amount distributed by the trust, each must include in gross income under section 662(a)(2) one-half ($15,000) of the distributable net income ($30,000) of the trust for 1957.
(c) The excess distribution of $35,000 ($50,000−$15,000) received by B is excluded from the determination of an accumulation distribution under section 665(b)(1) and accordingly is not includible in B’s gross income under section 668(a). Nor is such amount treated as an accumulation distribution for the purpose of determining the amount includible in A’s gross income under section 668(a).
(d) The accumulation distribution of the trust is $35,000, computed as follows:
| Total distribution by the trust | $100,000 | |
| Less: | ||
| Distributable net income for 1957 | $30,000 | |
| Excess distribution to B | 35,000 | |
| 65,000 | ||
| Accumulation distribution to A | 35,000 | |
| 1956 | 1955 | 1954 | Total | |
|---|---|---|---|---|
| Undistributed net income | $12,840 | $12,840 | $9,320 | $35,000 |
| Taxes imposed on the trust | 7,260 | 7,260 | 5,270 | 19,790 |
| Total | 20,100 | 20,100 | 14,590 | 54,790 |
(b) Since B received four-fifths of the total amount ($75,000) distributed by the trust during 1955, he must include in his gross income under section 662(a)(2) four-fifths ($24,000) of the distributable net income ($30,000) of the trust for 1955. A will include in her gross income under section 662(a)(2) one-fifth ($6,000) of the distributable net income ($30,000) of the trust for 1955.
(c) The excess distribution of $36,000 ($60,000−$24,000) received by B is excluded from the determination of an accumulation distribution under section 665(b)(1) and accordingly is not includible in his gross income under section 668(a).
(d) The amount treated as an accumulation distribution for the purpose of determining the amount includible in A’s gross income for 1955 under section 668(a) is $9,000, computed as follows:
| Total distribution by the trust | $75,000 | |
| Less: | ||
| Distributable net income for 1955 | $30,000 | |
| Excess distribution to B | 36,000 | |
| 66,000 | ||
| Amount treated as an accumulation distribution | 9,000 | |
| Accumulation distribution | $9,000 | |
| Taxes imposed on the trust (9,000/ 12,840 × $7,260) | 5,089 | |
| Total | 14,089 | |
§ 1.668(a)-4 Tax attributable to throwback.
(a) The tax attributable to amounts deemed distributed under section 666 is imposed on the beneficiary for the taxable year of the beneficiary in which the accumulation distribution is made unless the taxable year of the beneficiary is different from that of the trust (see section 662(c) and the regulations thereunder). In the case of a trust (other than a foreign trust created by a U.S. person), the tax cannot be greater than the aggregate of the taxes attributable to those amounts had they been included, in accordance with the provisions of section 662 (a)(2) and (b), in the gross income of the beneficiary for the preceding taxable year or years in which they were deemed distributed. In the case of a foreign trust created by a U.S. person, the tax on the beneficiary shall be computed in accordance with the provisions of section 669 and the regulations thereunder. The tax liability of the beneficiary of a trust (other than a foreign trust created by a U.S. person), including the portion of an entire foreign trust which does not constitute a foreign trust created by a U.S. person (see § 1.643(d)-1), for the taxable year is computed in the following manner:
(1) First, compute the amount of tax for the taxable year attributable to the section 666 amounts which are included in the gross income of the beneficiary for the year. The tax attributable to those amounts is the difference between the tax for the taxable year computed with the inclusion of the section 666 amounts in gross income and the tax computed without including them in gross income.
(2) Next, compute the tax attributable to the section 666 amounts for each of the preceding taxable years as if they had been included in gross income for those years. The tax attributable to such amounts in each such preceding taxable year is the difference between the tax for such preceding year computed with the inclusion of the section 666 amounts in gross income and the tax for such year computed without including them in gross income. The tax computation for each preceding year shall reflect the taxpayer’s marital and dependency status for that year.
(3) The total tax for the taxable year is the tax for that year computed without including the section 666 amounts, plus:
(i) The amount of the tax for the taxable year attributable to the section 666 amounts (computed in accordance with subparagraph (1) of this paragraph), or (ii) The sum of the taxes for the preceding taxable years attributable to the section 666 amounts (computed in accordance with subparagraph (2) of this paragraph),
(b) The provisions of paragraph (a) of this section may be illustrated by the following example:
| Tax on $15,000 (taxable income including section 666 amounts) | $4,730 | |
| Tax on $5,000 (taxable income excluding section 666 amounts) | 1,100 | |
| Tax attributable to section 666 amounts | 3,630 | |
| Tax on $16,000 (taxable income including section 666 amounts) | $5,200 | |
| Tax on $10,000 (taxable income excluding section 666 amounts) | 2,640 | |
| Tax attributable to section 666 amounts | 2,560 | |
| Tax on $14,000 (taxable income including section 666 amounts) | $4,260 | |
| Tax on $10,000 (taxable income excluding section 666 amounts) | 2,640 | |
| Tax attributable to section 666 amounts | 1,620 | |
§ 1.668(b)-1 Credit for taxes paid by the trust.
(a) The taxes imposed on a complex trust for a taxable year which would not have been payable by the trust if amounts deemed under section 666 to have been distributed in the year had in fact been distributed in the year are not allowable as a refund to the trust but are allowable as a credit against the tax of the beneficiaries to whom the amounts described in section 666(a) are distributed.
(b) The credit to which a beneficiary is entitled under section 668(b) is allowed for the taxable year in which the accumulation distribution (to which the credit relates) is required to be included in the gross income of the beneficiary. Any excess over the total tax liability of the beneficiary is treated as an overpayment of tax by the beneficiary.
(c) The beneficiary is entitled to a portion of the credit described in paragraph (a) of this section in the ratio which the amount of the accumulation distribution to him bears to the accumulation distributions to all the beneficiaries.
§ 1.668(b)-2 Illustration of the provisions of subpart D.
The provisions of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code, other than provisions relating to a foreign trust created by a U.S. person, may be illustrated by the following example:
| Dividends | Rents | Interest (taxable) | Interest (exempt) | Total | |
|---|---|---|---|---|---|
| 1954 | $15,000 | $20,000 | $10,000 | $5,000 | $50,000 |
| 1955 | 10,000 | 15,000 | 10,000 | 5,000 | 40,000 |
| 1956 | 10,000 | 20,000 | 15,000 | 5,000 | 50,000 |
| 1957 | 10,000 | 15,000 | 15,000 | 5,000 | 45,000 |
(3) The following distributions were made by the trustee to A and B during the taxable years 1954 through 1957:
| A | B | |
|---|---|---|
| 1954 | $25,000 | None |
| 1955 | 20,000 | None |
| 1956 | 25,000 | $45,000 |
| 1957 | 22,500 | 29,550 |
(c) Tax liability of the trust—(1) 1954. (i) The tax liability of the trust for the taxable year 1954 is $13,451, computed as follows:
| Distributable net income under section 643(a) (paragraph (a)(1) of this example) | $50,000 | |
| Less amounts not includible in gross income: | ||
| Tax-exempt interest | $5,000 | |
| Dividend exclusion | 50 | |
| 5,050 | ||
| Distributable net income as adjusted | 44,950 | |
| Add: Capital gains (long-term) | 20,000 | |
| Total | 64,950 | |
| Deductions: | ||
| Distributions to A | $22,475 | |
| Capital gain deduction | $10,000 | |
| Personal exemption | 100 | |
| 32,575 | ||
| Taxable income | 32,375 | |
| Alternative tax | 13,601 | |
| Dividend received credit | 150 | |
| Tax liability | 13,451 | |
(2) 1955. (i) The tax liability of the trust for the taxable year 1955 is $8,189, computed as follows:
| Distributable net income under section 643(a) (paragraph (a)(1) of this example) | $40,000 | |
| Less amounts not includible in gross income: | ||
| Tax-exempt interest | $5,000 | |
| Dividend exclusion | 50 | |
| 5,050 | ||
| Distributable net income as adjusted | 34,950 | |
| Add: Capital gains (long-term) | 10,000 | |
| Total | 44,950 | |
| Deductions: | ||
| Distributions to A | $17,475 | |
| Capital gain deduction | 5,000 | |
| Personal exemption | 100 | |
| 22,575 | ||
| Taxable income | 22,375 | |
| Alternative tax | 8,388 | |
| Dividend received credit | 199 | |
| Tax liability | 8,189 | |
(3) 1956 and 1957. The trust had no tax liability for the taxable years 1956 and 1957 since all of its income was distributed during such years.
(d) Accumulation distributions. (1) Accumulation distributions of $20,000 and $7,050, as defined in section 665(b), were made to B during the years 1956 and 1957, respectively, computed as shown below:
| 1956 | 1957 | |
|---|---|---|
| Distributable net income of the trust as computed under section 643(a) | $50,000 | $45,000 |
| Less. Income currently distributable to A | 25,000 | 22,500 |
| Balance of income | 25,000 | 22,500 |
| Other amounts distributed to B | 45,000 | 29,550 |
| Accumulation distributions to B | 20,000 | 7,050 |
(3) The accumulation distribution for 1956 must first be allocated to the preceding taxable years as provided in section 666. After the application of the provisions of subpart D to the 1956 accumulation distribution and to the undistributed net incomes of the preceding taxable years, a similar allocation must be made of the 1957 accumulation distribution.
(e) Throwback of 1956 accumulation distribution to 1955. The accumulation distribution of $20,000 for 1956 must be allocated to the first preceding taxable year 1955, before allocation is made to the second preceding taxable year 1954.
(1) 1955 Undistributed net income. (i) The undistributed net income of the trust for 1955, determined as of the close of 1955, is $12,885, computed as follows:
| Distributable net income as computed under section 643(a) (paragraph (a)(1) of this example) | $40,000 | |
| Less: | ||
| Distributions to A | $20,000 | |
| Taxes imposed on the trust | 7,115 | |
| 27,115 | ||
| Undistributed net income as of the close of 1955 | 12,885 | |
| Taxable income (paragraph (c)(2)(i) of this example | $22,375 | ||
| Capital gains allocable to corpus | $10,000 | ||
| Less: | |||
| Capital gain deduction | $5,000 | ||
| Personal exemption | 100 | ||
| 5,100 | |||
| Portion of taxable income allocable to corpus | 4,900 | ||
| Balance | 17,475 | ||
| Total taxes paid by the trust | 8,189 | ||
| Taxes on income ($4,900) allocable to corpus | 1,074 | ||
| Taxes imposed on the trust (section 665(c)) | 7,115 | ||
(2) Allocation of 1956 accumulation distribution to the preceding taxable year 1955. The portion of the 1956 accumulation distribution which is deemed under section 666(a) to be distributed to B on the last day of 1955 (the first preceding taxable year) is $12,885, an amount equal to the undistributed net income for 1955. An additional amount equal to the taxes imposed on the trust ($7,115) is, under section 666(b), also deemed to be distributed to B on the last day of 1955. Thus, a total of $20,000 ($12,885 plus $7,115) is deemed to be distributed to B on December 31, 1955, by reason of the allocation of the 1956 accumulation distribution to the first preceding taxable year. See paragraph (h) of this example for the treatment of the amount of $20,000 in the hands of B.
(3) Character of amounts deemed distributed. Inasmuch as one-half of the 1955 distributable net income of the trust as determined under section 643(a) was currently distributable to A and the balance of such income is deemed under section 666 to be distributed to B on December 31, 1955, the distribution to B is deemed to consist of one-half of each item of income entering into the computation of the 1955 distributable net income; that is, dividends of $5,000, rents of $7,500, taxable interest of $5,000, and tax-exempt interest of $2,500.
(4) Credit for taxes paid by the trust. The amount of the taxes for the year 1955 which may not be refunded or credited to the trust under section 667 and which is allowed as a credit against the tax of B for 1956 under section 668(b) is $7,115. See also paragraph (h)(3) of this example.
(5) Effect of application of provisions of subpart D to the year 1955. After the allocation of the 1956 accumulation distribution to the preceding taxable year 1955, the undistributed portion of the distributable net income, the undistributed net income, and the taxes imposed on the trust for 1955 are zero. The portion of the 1956 accumulation distribution which is unabsorbed by the 1955 undistributed net income is $7,115, determined as follows:
| 1956 accumulation distribution (paragraph (d)(1) of this example) | $20,000 | |
| Less: Amount allocable to 1955 | 12,885 | |
| Balance allocable to second preceding taxable year 1954 | 7,115 | |
(1) 1954 Undistributed net income. (i) The undistributed net income of the trust for 1954, determined as of the close of 1954, is $14,155, computed as follows:
| Distributable net income as computed under section 643(a) (paragraph (a)(1) of this example) | $50,000 | |
| Less: | ||
| Distributions to A | $25,000 | |
| Taxes imposed on the trust | 10,845 | |
| 35,845 | ||
| Undistributed net income as of the close of 1954 | 14,155 | |
| Taxable income (paragraph (c)(1)(i) of this example) | $32,375 | ||
| Capital gains allocable to corpus | $20,000 | ||
| Less: | |||
| Capital gain deduction | $10,000 | ||
| Personal exemption | 100 | ||
| 10,100 | |||
| Portion of taxable income allocable to corpus | 9,900 | ||
| Balance | 22,475 | ||
| Total taxes paid by the trust | 13,451 | ||
| Taxes on income ($9,900) allocable to corpus | 2,606 | ||
| Taxes imposed on the trust (section 665(c)) | 10,845 | ||
(2) Allocation of 1956 accumulation distribution to the second preceding taxable year 1954. Since the unabsorbed portion of the 1956 accumulation distribution of $7,115 is less than the 1954 undistributed net income of $14,155, the trust is deemed under section 666(c) to have also distributed an additional amount ($5,451) equal to a pro rata portion (7,115/14,155 × $10,845) of the taxes imposed on the trust for 1954. Thus, a total of $12,566 ($7,115 plus $5,451) is deemed to be distributed to B on December 31, 1954, by reason of the throwback of the 1956 accumulation distribution. See paragraph (h) of this example for the treatment of the amount of $12,566 in the hands of B.
(3) Character of amounts deemed distributed to B. The amount of $12,566 which, under section 666, is deemed to be distributed to B on December 31, 1954, is deemed to be composed of the following items of income of the trust: Dividends, $3,770 (15,000/50,000 × $12,566); rents, $5,026 (20,000/50,000 × $12,566); taxable interest, $2,513 (10,000/50,000 × $12,566); and tax-exempt interest, $1,257 (5,000/50,000 × $12,566). One-half of the dividends of $3,770 is considered as distributed from the dividends received by the trust on or before July 31, 1954, of which $13 (3,770/15,000 × $50) is deemed distributed from the dividends excluded under section 116, and the other half as distributed from the dividends received after July 31, 1954. Thus, of the total of $12,566 deemed distributed to B, $11,296 is considered as made from income included in the gross income of the trust and $1,270 from non-taxable income of the trust.
(4) Credit for taxes paid by the trust. The amount of the taxes for the year 1954 which may not be refunded or credited to the trust under section 667 and which is allowed as a credit against the tax of B for 1956 under section 668(b), because of the allocation of the 1956 accumulation distribution to 1954, is $5,401, computed as follows:
| Taxable income of the trust as of the close of 1954 (paragraph (c)(1) of this example) | $32,375 | |
| Less: Amount deemed distributed to B under section 666 from the taxable income of the trust | 11,296 | |
| Taxable income adjusted as of the close of 1956 | 21,079 | |
| (Taxes on $21,079 (alternative tax) | $8,050 | |
| Taxes on income allocable to corpus (subparagraph (1)(ii) of this paragraph) | $2,606 | |
| Taxes imposed on the trust determined as of the close of 1956 | 5,444 | |
| Taxes imposed on the trust determined as of the close of 1954 | $10,845 | |
| Taxes imposed on the trust determined as of the close of 1956 | 5,444 | |
| Amount of taxes allowed as a credit to B under section 668(b) | 5,401 | |
| Distributable net income (section 643(a)) | $50,000 | |
| Less: | ||
| Amount currently distributable to A | $25,000 | |
| Amount deemed distributed to B under section 666 | 12,566 | |
| ———— | 37,566 | |
| Undistributed portion of distributable net income as of the close of 1956 | 12,434 | |
| Dividends | Rents | Interest (taxable) | Interest (exempt) | Total | |
|---|---|---|---|---|---|
| Trust income | $15,000 | $20,000 | $10,000 | $5,000 | 1 $50,000 |
| Distributions: | |||||
| To A | 7,500 | 10,000 | 5,000 | 2,500 | 2 25,000 |
| To B | 3,770 | 5,026 | 2,513 | 1,257 | 3 12,566 |
| Total | 11,270 | 15,026 | 7,513 | 3,757 | 37,566 |
| Balance | 3,730 | 4,974 | 2,487 | 1,243 | 12,434 |
1 See paragraph (a)(1) of this example.
2 See paragraph (b) of this example.
3 See paragraph (f)(3) of this example.
| Undistributed portion of distributable net income as of the close of 1956 | $12,434 |
| Less: Taxes imposed on the trust determined as of the close of 1956 (subparagraph (4) of this paragraph) | 5,444 |
| Undistributed net income as of the close of 1956 | 6,990 |
(1) Allocation of 1957 accumulation distribution to the preceding taxable year 1954. The portion of the 1957 accumulation distribution which is deemed under section 666(a) to be distributed to B on the last day of 1954 is $6,990, an amount equal to the undistributed net income of the trust for 1954, determined as of the close of 1956. An additional amount equal to the taxes imposed on the trust ($5,444), determined as of the close of 1956, is under section 666(b) also deemed to be distributed to B on the last day of 1954. See paragraph (f) (4) and (5) of this example. Thus, a total of $12,434 ($6,990 plus $5,444) is deemed to be distributed to B on December 31, 1954, by reason of the allocation of the 1957 accumulation distribution to the taxable year 1954. See paragraph (j) of this example for the treatment of the amount of $12,434 in the hands of B.
(2) Character of amounts deemed distributed. Inasmuch as the balance of the 1954 distributable net income of the trust is deemed under section 666 to be distributed to B on December 31, 1954, the distribution is deemed to consist of dividends of $3,730, rents of $4,974, taxable interest of $2,487, and tax-exempt interest of $1,243. See paragraph (f)(5)(ii) of this example.
(3) Credit for taxes paid by the trust. The amount of taxes for the year 1954 which may not be refunded or credited to the trust under section 667 and which is allowed as a credit against the tax of B under section 668(b) is $5,444, the amount of taxes imposed on the trust determined as of the close of 1956. See paragraph (f)(4) of this example.
(4) Effect of application of provisions of subpart D to the year 1954. After the allocation of the 1957 accumulation distribution to the preceding taxable year 1954, the undistributed portion of the distributable net income, the undistributed net income, and the taxes imposed on the trust for 1954 are zero. The balance of $60 ($7,050 less $6,990) of the 1957 accumulation distribution remaining after the allocation of the accumulation distribution to the year 1954, may not be allocated to the year 1953 since that year is not subject to the provisions of the Internal Revenue Code of 1954.
(h) Determination of B’s tax liability; taxable year 1956—(1) Amount of trust income includible in gross income. (i) Of the amount of $45,000 distributed by the trust to B during the taxable year 1956, $25,000 is treated as a distribution out of trust income for that year within the meaning of section 662(a)(2), and $20,000 as an accumulation distribution within the meaning of section 665(b) (see paragraph (d) of this example). However, $12,885 plus taxes of $7,115 is deemed distributed to B on December 31, 1955, and $7,115 plus taxes of $5,451 on December 31, 1954, under section 666 by reason of the accumulation distribution made during 1956, and these amounts are includible in B’s gross income for 1956 to the extent that they would have been includible in his gross income under section 662 (a)(2) and (b) for 1955 and 1954, respectively, had they been distributed on the last day of those years.
(ii) The amounts distributed to B out of trust income for the year 1956, and the amounts deemed distributed out of income for the preceding taxable years 1955 and 1954 have the following character for the purpose of determining the amount includible in B’s gross income for 1956:
| Year | Dividends | Rents | Interest (taxable) | Interest (exempt) | Total |
|---|---|---|---|---|---|
| 1956 | $5,000 | $10,000 | $7,500 | $2,500 | 1 $25,000 |
| 1955 | 5,000 | 7,500 | 5,000 | 2,500 | 2 20,000 |
| 1954 | 3,770 | 5,026 | 2,513 | 1,257 | 3 12,566 |
| Total | 13,770 | 22,526 | 15,013 | 6,257 | 57,566 |
1 See paragraph (d)(2) of this example.
2 See paragraph (e)(3) of this example.
3 See paragraph (f)(3) of this example.
(ii) The computation of the tax for the taxable year 1956 attributable to the section 666 amounts which are included in B’s gross income for such year, as provided in paragraph (a)(1) of § 1.668(a)-4, is as follows:
| (1) Section 666 amounts excluded | (2) Section 666 amounts included | |
|---|---|---|
| Salary | $15,000 | $15,000 |
| Income from trust: | ||
| Dividends ($50 excluded) | 4,950 | 13,720 |
| Rents | 10,000 | 22,526 |
| Taxable interest | 7,500 | 15,013 |
| Total | 37,450 | 66,259 |
| Less: Allowable deductions | 10,600 | 10,600 |
| Taxable income | 26,850 | 55,659 |
| Total tax | 11,267 | 31,064 |
| Less: Dividend received credit | 198 | 475 |
| Tax liability | $11,069 | 30,589 |
| Tax on income from which section 666 amounts are excluded | 11,069 | |
| 1956 tax attributable to section 666 amounts | 19,520 |
| Preceding taxable years | ||
|---|---|---|
| First 1955 | Second 1954 | |
| Taxable income previously reported | $13,400 | $13,400 |
| Section 666 amounts: | ||
| Dividends ($50 excluded) | 4,950 | 3,720 |
| Rents | 7,500 | 5,026 |
| Taxable interest | 5,000 | 2,513 |
| Taxable income as adjusted | 30,850 | 24,659 |
| Total tax | 13,747 | 9,949 |
| Less: Dividend received credit | 198 | 75 |
| Balance of tax | 13,549 | 9,874 |
| Tax liability | 4,002 | 4,002 |
| Tax attributable to section 666 amounts | 9,547 | 5,872 |
(3) Credits against the tax. B is allowed under section 668(b) a credit of $12,516 ($5,401 for 1954 and $7,115 for 1955) against his 1956 tax liability for the taxes paid by the trust for the preceding taxable years and which may not be refunded or credited to the trust under section 667. See paragraphs (e)(4) and (f)(4) of this example.
(i) [Reserved]
(j) Taxable year 1957—(1) Amount of trust income includible in gross income. (i) Of the amount of $29,550 distributed by the trust to B during the taxable year 1957, $22,500 is treated as a distribution out of trust income for that year within the meaning of section 662(a)(2), and $7,050 as an accumulation distribution within the meaning of section 665(b) (see paragraph (d) of this example). However, $6,990 plus taxes of $5,444 is deemed distributed to B on December 31, 1954, under section 666 by reason of the accumulation distribution made during 1957, and that amount is includible in B’s gross income for 1957, to the extent that it would have been includible in his gross income under section 662 (a)(2) and (b) for 1954, had it been distributed on the last day of that year.
(ii) The amounts deemed distributed to B out of trust income for the year 1957 and the preceding taxable year 1954 are deemed to have the following character for the purpose of determining the amount includible in B’s gross income for 1957:
| Year | Dividends | Rents | Interest (taxable) | Interest (exempt) | Total |
|---|---|---|---|---|---|
| 1957 | $5,000 | $7,500 | $7,500 | $2,500 | 1 $22,500 |
| 1954 | 3,730 | 4,974 | 2,487 | 1,243 | 2 12,434 |
| Total | 8,730 | 12,474 | 9,987 | 3,743 | 34,934 |
1 See paragraph (d)(2) of this example.
2 See paragraph (g)(2) of this example.
(ii) The computation of the tax for the taxable year 1957 attributable to the section 666 amounts which are included in B’s gross income for that year, as provided in paragraph (a)(1) of § 1.668(a)-4, is as follows:
| Section 666 amounts excluded | Section 666 amounts included | |
|---|---|---|
| Salary | $15,000 | $15,000 |
| Trust income: | ||
| Dividends ($50 excluded) | 4,950 | 8,680 |
| Rents | 7,500 | 12,474 |
| Taxable interest | 7,500 | 9,987 |
| Total | 34,950 | 46,141 |
| Less: Allowable deductions | 8,100 | 8,100 |
| Taxable income | 26,850 | 38,041 |
| Total tax | 11,267 | 18,388 |
| Less: Dividends received credit | 198 | 275 |
| Tax liability | 11,069 | 18,113 |
| Tax on income from which section 666 amounts are excluded | 11,069 | |
| 1957 tax attributable to section 666 amounts | 7,044 |
| 1954 taxable income as adjusted (paragraph (h)(2)(iii) of this example) | $24,659 | |
| Section 666 amounts: | ||
| Dividends | 3,730 | |
| Rents | 4,974 | |
| Taxable interest | 2,487 | |
| Taxable income as adjusted | 35,850 | |
| Total tax | 16,963 | |
| Less: Dividends received credit | 150 | |
| Balance of tax | 16,813 | |
| Tax liability for 1954 | $4,002 | |
| Tax attributable to 1956 accumulation distribution this example) | 5,872 | |
| 9,874 | ||
| Tax attributable to the section 666 amounts distributed in 1957 | 6,939 | |
(3) Credit against the tax. B is allowed under section 668(b) a credit of $5,444 against his 1957 tax liability for the balance of the taxes paid by the trust for 1954 and which may not be refunded or credited to the trust under section 667. See paragraph (g)(3) of this example.
§ 1.669(a)-1 Limitation on tax.
(a) In general. Section 669 provides that, at the election of a beneficiary who is a U.S. person (as defined in section 7701(a)(30)) and who satisfies the requirements of section 669(b) (that certain information with respect to the operation and accounts of the trust be supplied), the tax attributable to the amounts treated under section 668(a) as having been received by him, from a foreign trust created by a U.S. person, on the last day of a preceding taxable year of the trust shall not be greater than the tax computed under section 669(a)(1)(A) (the computation under this provision will hereinafter be referred to as the “exact throwback” method) or under section 669(a)(1)(B) (the computation under this provision will hereinafter be referred to as the “short-cut throwback” method). This election of the beneficiary with respect to the taxable year of the beneficiary in which the distribution is made shall be made with the district director before the expiration of the period of limitations for assessment provided in section 6501 for such taxable year.
(b) Where no election is made. If the beneficiary does not make the election provided in section 669(a) in the manner required in section 669(b) and § 1.669(b)-2, or furnish the information with respect to the operation and accounts of the foreign trust created by a U.S. person required by section 669(b) and § 1.669(b)-1, the tax on an accumulation distribution treated under section 668(a) as having been received by him from such foreign trust on the last day of a preceding taxable year of the trust shall be computed without reference to section 668 or 669. In such case, the entire accumulation distribution will be included in the gross income of the beneficiary in the year in which it is paid, credited, or required to be distributed, and tax for such year will be computed on the basis of the beneficiary’s total taxable income for the year after taking into account such inclusion in gross income.
(c) Year for which tax is payable. The tax, regardless of the manner in which computed, of the beneficiary which is attributable to an accumulation distribution is imposed on the beneficiary for the taxable year of the beneficiary in which the accumulation distribution is made to him unless the taxable year of the beneficiary is different from that of the trust. See section 662(c) and § 1.662(c)-1.
§ 1.669(a)-2 Rules applicable to section 669 computations.
(a) In general. (1) Section 668(a) provides that the total of the amounts treated under section 666 as having been distributed by the foreign trust created by a U.S. person on the last day of a preceding taxable year of such trust shall be included in the gross income of the beneficiary or the beneficiaries who are U.S. persons receiving them. The total of such amounts is includible in the gross income of each beneficiary to the extent the amount would have been included in his gross income under section 662 (a)(2) and (b) if the total had actually been paid by the trust on the last day of such preceding taxable year. The total is included in the gross income of the beneficiary for the taxable year of the beneficiary in which such amounts are in fact paid, credited, or required to be distributed unless the taxable year of the beneficiary differs from the taxable year of the trust (see section 662(c) and § 1.662(c)-1). The character of the amounts treated as received by a beneficiary in prior taxable years, including taxes deemed distributed, in the hands of the beneficiary is determined by the rules contained in section 662(b) and §§ 1.662(b)-1 and 1.662(b)-2.
(2) The total of the amounts treated under section 666 as having been distributed by the trust on the last day of a preceding taxable year of the trust are included as prescribed in subparagraph (1) of this paragraph in the gross income of the beneficiary even though as of that day the beneficiary would not have been entitled to receive them had they actually been distributed on that day.
(3) Any deduction allowed to the trust in computing distributable net income for a preceding taxable year (such as depreciation, depletion, etc.) is not deemed allocable to a beneficiary because of the amounts included in a beneficiary’s gross income under this section since the deduction has already been utilized in reducing the amount included in the beneficiary’s income.
(b) Allocation among beneficiaries of a foreign trust. Where there is more than one beneficiary the portion of the total amount includible in gross income under paragraph (a) of this section which is includible in the gross income of a beneficiary who is a U.S. person is based upon the ratio determined under the second sentence of section 662(a)(2) for the taxable year in which distributed (and not for the preceding taxable year). This paragraph may be illustrated by the example in § 1.668(a)-2.
(c) Treatment of income taxes paid by the trust—(1) Current distributions. The income taxes imposed by the provisions of section 871 on the income of a foreign trust created by a U.S. person shall be included in the gross income of the beneficiary, who is a U.S. person, for the taxable year in which such income is paid, credited, or required to be distributed to the beneficiary.
(2) Accumulation distribution. (i) If an accumulation distribution is deemed under § 1.666(a)-1 to be distributed on the last day of a preceding taxable year and the amount is not less than the undistributed net income for such preceding taxable year, then an additional amount equal to the taxes imposed on the trust pursuant to the provisions of section 871 for such preceding taxable year is likewise deemed distributed under section 661(a)(2).
(ii) If an accumulation distribution is deemed under § 1.666(a)-1 to be distributed on the last day of a preceding taxable year and the amount is less than the undistributed net income for such preceding taxable year, then an additional amount (representing taxes) is likewise deemed distributed under section 661(a)(2). The additional amount is equal to the taxes imposed on the trust pursuant to the provisions of section 871 for such preceding taxable year, multiplied by the fraction the numerator of which is the amount of the accumulation distribution attributable to such preceding taxable year and the denominator of which is the undistributed net income for such preceding taxable year.
(3) Credits under sections 32 and 668(b). Credit under section 32 is allowable to the beneficiary for income taxes withheld at source under subchapters A and B of chapter 3 and which are deemed distributed to him. Credit under section 668(b) is allowable to the beneficiary for income taxes imposed upon the foreign trust by section 871(b). These credits shall be allowed against the tax of the beneficiary for the taxable year of the beneficiary in which the income is paid, credited, or required to be distributed to him, or in which the accumulation distribution to which such taxes relate is made to him.
(d) Credit for foreign income taxes paid by the trust. To the extent provided in section 901, credit under section 33 is allowable to the beneficiary for the foreign taxes paid or accrued by the trust to a foreign country.
§ 1.669(a)-3 Tax computed by the exact throwback method.
(a) Tax attributable to amounts treated as received in preceding taxable years. If a taxpayer elects to compute the tax, on amounts deemed distributed under section 666, by the exact throwback method provided in section 669(a)(1)(A), the tax liability of the beneficiary for the taxable year in which the accumulation distribution is paid, credited, or required to be distributed is computed as provided in paragraph (b) of this section. The beneficiary may not elect to use the exact throwback method of computing his tax on an accumulation distribution as provided in section 669(a)(1)(A) if he were not alive on the last day of each preceding taxable year of the foreign trust created by a U.S. person with respect to which a distribution is deemed made under section 666(a). Thus, if a portion of an amount received as an accumulation distribution was accumulated by the trust during years before the beneficiary was born, the beneficiary is not permitted to elect the exact throwback method provided in section 669(a)(1)(A). See § 1.669(a)-4 for the computation of the tax on an accumulation distribution by the short-cut throwback method provided in section 669(a)(1)(B) under these circumstances.
(b) Computation of tax. The tax referred to in paragraph (a) of this section is computed as follows:
(1) First, compute the tax attributable to the section 666 amounts for each of the preceding taxable years. To determine the section 666 amounts attributable to each of the preceding taxable years, see § 1.666(a)-1. The tax attributable to such amounts in each such preceding taxable year is the difference between the tax for such preceding taxable year computed with the inclusion of the section 666 amounts in gross income, and the tax for such year computed without including them in gross income. Tax computations for each preceding year shall reflect the taxpayer’s marital and dependency status for that year.
(2) Second, add
(i) The sum of the taxes for the preceding taxable years attributable to the section 666 amounts (computed in accordance with subparagraph (1) of this paragraph), and
(ii) The tax for the taxable year of the beneficiary in which the accumulation distribution is paid, credited, or required to be distributed to him, computed without including the section 666 amounts in gross income.
(c) Effect of prior election. In computing the tax attributable to an accumulation distribution for the taxable year in which such accumulation distribution is paid, credited, or required to be distributed to him, the beneficiary in computing the tax attributable to section 666 amounts for each of the preceding taxable years, must include in his gross income for each such year the section 666 amounts deemed distributed to him in such year resulting from prior accumulation distributions made to him in taxable years prior to the current taxable year. These section 666 amounts resulting from such prior accumulation distributions must be included in the gross income for such preceding taxable year even though the tax on the accumulation distribution of such prior taxable year was computed by the short-cut throwback method provided in section 669(a)(1)(B) and § 1.669(a)-4.
§ 1.669(a)-4 Tax attributable to short-cut throwback method.
(a) Manner of computing tax. If a beneficiary has elected under section 669(a) to compute the tax on the amounts deemed distributed under section 666 by the short-cut throwback method provided in section 669(a)(1)(B), the tax liability of the beneficiary for the taxable year is computed in the following manner:
(1) First, determine the number of preceding taxable years of the trust, on the last day of which an amount is deemed under section 666(a) to have been distributed. In any case where there has been a prior accumulation distribution with respect to which the beneficiary has elected to compute his tax either by the exact throwback method or by the short-cut throwback method, or to which the next to the last sentence of section 668(a) has applied, for purposes of an election to use the short-cut throwback method with respect to a subsequent accumulation distribution, in determining the number of preceding taxable years of the trust with respect to which an amount of the subsequent accumulation distribution is deemed distributed to a beneficiary under section 666(a), there shall be excluded any preceding taxable year during which any part of the prior accumulation distribution was deemed distributed to the beneficiary. For example, assume that an accumulation distribution of $90,000 made to a beneficiary in 1963 is deemed distributed in the amounts of $25,000 in each of the years 1962, 1961, and 1960, and in the amount of $15,000 in 1959, and a subsequent accumulation distribution of $85,000 made to the same beneficiary in 1964 is deemed distributed in the amount of $10,000 during 1959, and $25,000 during each of the years 1958, 1957, and 1956. The accumulation distribution made in 1963 is deemed distributed in 4 preceding taxable years of the trust (1962, 1961, 1960, and 1959). Inasmuch as the year 1959 was a year during which part of the 1963 accumulation distribution was deemed distributed, for purposes of determining the number of preceding taxable years in which the accumulation distribution of $85,000 made in 1964 is deemed distributed, the year 1959 is excluded and the $85,000 accumulation distribution is deemed distributed in three preceding taxable years (1958, 1957, and 1956),
(2) Second, divide the number of preceding taxable years of the trust, on the last day of which an amount is deemed under section 666(a) to have been distributed (determined as provided in subparagraph (1) of this paragraph) into the amount (representing an accumulation distribution made by a foreign trust created by a U.S. person) required to be included under section 669(a) in the gross income of the beneficiary for the taxable year,
(3) Third, compute the tax of the beneficiary for the current taxable year (the year in which the accumulation distribution is paid, credited, or required to be distributed to him) and for each of the 2 taxable years immediately preceding such year,
(i) With the inclusion in gross income of the beneficiary for each of such 3 years of the amount determined under subparagraph (2) of this paragraph, and
(ii) Without such inclusion.
(4) Fourth, add the additional taxes resulting from the application of subparagraph (3) of this paragraph for the taxable year and the 2 taxable years (or the 1 taxable year, where applicable) immediately preceding the year in which the accumulation distribution is paid, credited, or required to be distributed and then divide this amount by three (or two, where applicable). The resulting amount is then multiplied by the number of preceding taxable years of the trust on the last day of which an amount is deemed under section 666(a) to have been distributed (previously determined under subparagraph (1) of this paragraph). The resulting amount is the tax, under the short-cut throwback method provided in section 669(a)(1)(B), which is attributable to the amounts treated under section 668(a) as having been received by the beneficiary from a foreign trust created by a U.S. person on the last day of the preceding taxable year.
(5) Fifth, add the amount determined under subparagraph (4) of this paragraph to the beneficiary’s tax for the taxable year in which the accumulation distribution was paid, credited, or required to be distributed to him, computed without inclusion of the accumulation distribution in gross income for that year. The total is the beneficiary’s income tax for such year.
(b) Credit for tax paid by trust. The income taxes deemed distributed to a beneficiary in the manner described in paragraphs (c) and (d) of § 1.669(a)-2 are included in the beneficiary’s gross income for purposes of the computations required by this section. To the extent provided in § 1.669(a)-2, credits for such taxes are allowable to the beneficiary. In the computations under the short-cut throwback method provided in section 669(a)(1)(B), the rules set forth in section 662(b) and § 1.662(b)-1 shall be applied in determining the character, in the hands of the beneficiary, of the amounts, including taxes includible in the distribution or deemed distributed, treated as received by a beneficiary in prior taxable years. For example, if one-fifth of such amounts represents tax-free income, then one-fifth of the amount determined under paragraph (a)(2) of this section shall be treated as tax-free income.
§ 1.669(b)-1 Information requirements.
The election of a beneficiary who is a U.S. person to apply the limitations on tax provided in section 669(a) shall not be effective unless the beneficiary, at or before the time the election is made, supplies, in a letter addressed to the district director for the internal revenue district in which the taxpayer files his return (or the Director of International Operations where appropriate), or in a statement attached to his return, the following information with respect to the operation and accounts of the foreign trust created by a U.S. person for each of the preceding taxable years, on the last day of which an amount is deemed distributed under section 666(a):
(a) The gross income of the trust: The gross income should be separated to show the amount of each type of income received by the trust and to identify its source. For example, the beneficiary should list separately, by type (dividends, rents, capital gains, taxable interest, exempt interest, etc.) and source (name and country of payor), each item of income included in the gross income of the trust. For this purpose, the gross income of the trust includes gross income from U.S. sources which is exempt from taxation under section 894.
(b) The amount of tax withheld under section 1441 by the United States on income from sources within the United States.
(c) The amount of the tax paid to each foreign country by the trust.
(d) The expenses of the trust attributable to each type of income disclosed in paragraph (b) of this section, and the general expenses of the trust.
(e) The distributions, if any, made by the trust to the beneficiaries (including those who are not U.S. persons). These distributions should be separated into amounts of income required to be distributed currently within the meaning of section 661(a)(1), and any other amounts properly paid, credited, or required to be distributed within the meaning of section 661(a)(2).
(f) Any other information which is necessary for the computation of tax on the accumulation distribution as provided in section 669(a).
(g) If the foreign trust created by a U.S. person is less than the entire foreign trust, the information listed in paragraphs (a) through (f) of this section shall also be furnished with respect to that portion of the entire foreign trust which is not a foreign trust created by a U.S. person.
§ 1.669(b)-2 Manner of exercising election.
(a) By whom election is to be made. Except as otherwise provided in this paragraph, a taxpayer whose tax liability is affected by the election shall make the election provided in section 669(a). In the case of a partnership, or a corporation electing under the provisions of subchapter S, chapter 1 of the Code, the election shall be exercised by the partnership or such corporation.
(b) Time and manner of making election. The election under section 669(a) may be made, or revoked, at any time before the expiration of the period provided in section 6501 for assessment of the tax. If an election is revoked, a new election may be made at any time before the expiration of such period. The election (or a revocation of an election) may be made in a letter addressed to the district director of internal revenue for the district in which the taxpayer files his tax return (or the Director of International Operations where appropriate) or may be made in a statement attached to the return. In any case where all the information described in § 1.669(b)-1 is not furnished at or before the time the beneficiary signifies his intention of making an election and by reason thereof an election has not been made, and subsequent thereto, but before the expiration of the period provided in section 6501 for the assessment of the tax, there is furnished the required information not previously furnished, the election will be considered as made at the time such additional information is furnished.
Unitrust Actuarial Tables Applicable Before June 1, 2023.
§ 1.664-4A Valuation of charitable remainder interests for which the valuation date is before June 1, 2023.
(a) Valuation of charitable remainder interests for which the valuation date is before January 1, 1952. There was no provision for the qualification of a charitable remainder unitrust under section 664 until 1969. See § 20.2031-7A(a) of this chapter (Estate Tax Regulations) for the determination of the present value of a charitable interest for which the valuation date is before January 1, 1952.
(b) Valuation of charitable remainder interests for which the valuation date is after December 31, 1951, and before January 1, 1971. No charitable deduction is allowable for a transfer to a unitrust for which the valuation date is after the effective dates of the Tax Reform Act of 1969 unless the unitrust meets the requirements of section 664. See § 20.2031-7A(b) of this chapter (Estate Tax Regulations) for the determination of the present value of a charitable remainder interest for which the valuation date is after December 31, 1951, and before January 1, 1971.
(c) Valuation of charitable remainder unitrusts having certain payout sequences for transfers for which the valuation date is after December 31, 1970, and before December 1, 1983. For the determination of the present value of a charitable remainder unitrust for which the valuation date is after December 31, 1970, and before December 1, 1983, see § 20.2031-7A(c) of this chapter (Estate Tax Regulations) and former § 1.664-4(d) (as contained in the 26 CFR part 1 edition revised as of April 1, 1994).
(d) Valuation of charitable remainder unitrusts having certain payout sequences for transfers for which the valuation date is after November 30, 1983, and before May 1, 1989—(1) In general. Except as otherwise provided in paragraph (d)(2) of this section, in the case of transfers made after November 30, 1983, for which the valuation date is before May 1, 1989, the present value of a remainder interest that is dependent on a term of years or the termination of the life of one individual is determined under paragraphs (d)(3) through (d)(6) of this section, provided that the amount of the payout as of any payout date during any taxable year of the trust is not larger than the amount that the trust could distribute on such date under § 1.664-3(a)(1)(v) if the taxable year of the trust were to end on such date. The present value of the remainder interest in the trust is determined by computing the adjusted payout rate (as defined in paragraph (d)(3) of this section) and following the procedure outlined in paragraph (d)(4) or (d)(5) of this section, whichever is applicable. The present value of a remainder interest that is dependent on a term of years is computed under paragraph (d)(4) of this section. The present value of a remainder interest that is dependent on the termination of the life of one individual is computed under paragraph (d)(5) of this section. See paragraph (d)(2) of this section for testamentary transfers for which the valuation date is after November 30, 1983, and before August 9, 1984.
(2) Rules for determining the present value for testamentary transfers where the decedent dies after November 30, 1983, and before August 9, 1984. For purposes of section 2055 or 2106, if—
(i) The decedent dies after November 30, 1983, and before August 9, 1984; or
(ii) On December 1, 1983, the decedent was mentally incompetent so that the disposition of the property could not be changed, and the decedent died after November 30, 1983, without regaining competency to dispose of the decedent’s property, or died within 90 days of the date on which the decedent first regained competency, the present value determined under this section of a remainder interest is determined in accordance with paragraph (d)(1) and paragraphs (d)(3) through (d)(6) of this section, or § 1.664-4A(c), at the option of the taxpayer.
(3) Adjusted payout rate. The adjusted payout rate is determined by multiplying the fixed percentage described in paragraph (a)(1)(i)(a) of § 1.664-3 by the figure in column (2) of Table F(1) which describes the payout sequence of the trust opposite the number in column (1) of Table F(1) which corresponds to the number of months by which the valuation date for the first full taxable year of the trust precedes the first payout date for such taxable year. If the governing instrument does not prescribe when the distribution shall be made during the taxable year of the trust, see § 1.664-4(a). In the case of a trust having a payout sequence for which no figures have been provided by Table F (1) and in the case of a trust which determines the fair market value of the trust assets by taking the average of valuations on more than one date during the taxable year, see § 1.664-4(b).
(4) Period is a term of years. If the period described in § 1.664-3(a)(5) is a term of years, the factor which is used in determining the present value of the remainder interest is the factor under the appropriate adjusted payout rate in Table D in § 1.664-4(e)(6) that corresponds to the number of years in the term. If the adjusted payout rate is an amount which is between adjusted payout rates for which factors are provided in Table D, a linear interpolation must be made. The present value of the remainder interest is determined by multiplying the net fair market value (as of the appropriate valuation date) of the property placed in trust by the factor determined under this paragraph (d)(4). For purposes of this section, the term appropriate valuation date means the date on which the property is transferred to the trust by the donor except that, for purposes of section 2055 or 2106, it means the date of death unless the alternate valuation date is elected in accordance with section 2032 and the regulations thereunder in which event it means the alternate valuation date. If the adjusted payout rate is greater than 14 percent, see § 1.664-4(b). The application of this paragraph (d)(4) may be illustrated by the following example:
| Factor at 9.6 percent for 15 years | 0.220053 |
| Factor at 9.8 percent for 15 years | .212862 |
| Difference | .007191 |
| Factor at 9.6 percent for 15 years | 0.220053 |
| Less: X | .006004 |
| Interpolated factor | .214049 |
| Present value of remainder interest = $100,000 × 0.214049 = $21,404.90 |
(5) Period is the life of one individual. If the period described in paragraph (a)(5) of § 1.664-3 is the life of one individual, the factor that is used in determining the present value of the remainder interest is the factor under the appropriate adjusted payout rate in column (2) of Table E in paragraph (d)(6) of this section opposite the number in column (1) that corresponds to the age of the individual whose life measures the period. For purposes of the computations described in this paragraph (b)(5), the age of an individual is to be taken as the age of that individual at the individual’s nearest birthday. If the adjusted payout rate is an amount which is between adjusted payout rates for which factors are provided for in Table E, a linear interpolation must be made. The present value of the remainder interest is determined by multiplying the net fair market value (as of the appropriate valuation date) of the property placed in trust by the factor determined under this paragraph (b)(5). If the adjusted payout rate is greater than 14 percent, see § 1.664-4(b). The application of this paragraph may be illustrated by the following example:
| Factor at 9 percent at age 50 | 0.15472 |
| Factor at 9.2 percent at age 50 | .15003 |
| Difference | .00469 |
| 9.091% − 9% ÷ 0.2% = X ÷ 0.00469 | |
| x = 0.00213 | |
| Factor at 9 percent at age 50 | .15472 |
| Less: X | .00213 |
| Interpolated factor | .15259 |
| Present value of remainder interest = | |
| $100,000 × 0.15259 = $15,259.00 | |
(6) Actuarial tables for transfers for which the valuation date is after November 30, 1983, and before May 1, 1989. Table D in § 1.664-4(e)(6) and the following tables shall be used in the application of the provisions of this section:
Table E
| (1) Age | (2) Adjusted payout rate | ||||
|---|---|---|---|---|---|
| 2.2% | 2.4% | 2.6% | 2.8% | 3.0% | |
| 0 | .23253 | .20635 | .18364 | .16394 | .14683 |
| 1 | .22196 | .19506 | .17170 | .15139 | .13372 |
| 2 | .22597 | .19884 | .17523 | .15468 | .13676 |
| 3 | .23039 | .20304 | .17920 | .15840 | .14024 |
| 4 | .23503 | .20747 | .18340 | .16237 | .14397 |
| 5 | .23988 | .21211 | .18783 | .16656 | .14793 |
| 6 | .24489 | .21693 | .19243 | .17094 | .15207 |
| 7 | .25004 | .22189 | .19718 | .17546 | .15637 |
| 8 | .25534 | .22701 | .20209 | .18016 | .16084 |
| 9 | .26080 | .23230 | .20718 | .18503 | .16549 |
| 10 | .26640 | .23774 | .21243 | .19008 | .17031 |
| 11 | .27217 | .24335 | .21786 | .19530 | .17532 |
| 12 | .27807 | .24911 | .22344 | .20068 | .18049 |
| 13 | .28407 | .25497 | .22913 | .20618 | .18579 |
| 14 | .29013 | .26089 | .23489 | .21175 | .19115 |
| 15 | .29621 | .26684 | .24067 | .21735 | .19655 |
| 16 | .30229 | .27279 | .24647 | .22296 | .20196 |
| 17 | .30838 | .27876 | .25228 | .22859 | .20739 |
| 18 | .31451 | .28477 | .25813 | .23427 | .21287 |
| 19 | .32070 | .29085 | .26407 | .24003 | .21844 |
| 20 | .32699 | .29704 | .27012 | .24591 | .22413 |
| 21 | .33339 | .30335 | .27629 | .25192 | .22996 |
| 22 | .33991 | .30977 | .28259 | .25807 | .23592 |
| 23 | .34655 | .31634 | .28904 | .26437 | .24205 |
| 24 | .35334 | .32306 | .29566 | .27085 | .24836 |
| 25 | .36031 | .32998 | .30248 | .27754 | .25490 |
| 26 | .36746 | .33710 | .30952 | .28446 | .26167 |
| 27 | .37481 | .34443 | .31678 | .29161 | .26869 |
| 28 | .38236 | .35197 | .32427 | .29901 | .27596 |
| 29 | .39006 | .35968 | .33194 | .30660 | .28344 |
| 30 | .39793 | .36757 | .33980 | .31439 | .29113 |
| 31 | .40594 | .37561 | .34783 | .32237 | .29902 |
| 32 | .41410 | .38383 | .35605 | .33054 | .30711 |
| 33 | .42240 | .39220 | .36444 | .33890 | .31541 |
| 34 | .43084 | .40072 | .37299 | .34744 | .32389 |
| 35 | .43942 | .40941 | .38172 | .35617 | .33258 |
| 36 | .44813 | .41824 | .39061 | .36508 | .34146 |
| 37 | .45696 | .42720 | .39966 | .37416 | .35053 |
| 38 | .46591 | .43630 | .40885 | .38339 | .35977 |
| 39 | .47496 | .44552 | .41818 | .39278 | .36917 |
| 40 | .48412 | .45486 | .42765 | .40232 | .37875 |
| 41 | .49338 | .46432 | .43725 | .41201 | .38849 |
| 42 | .50275 | .47391 | .44700 | .42187 | .39840 |
| 43 | .51221 | .48360 | .45686 | .43186 | .40847 |
| 44 | .52175 | .49340 | .46685 | .44199 | .41870 |
| 45 | .53136 | .50327 | .47693 | .45223 | .42905 |
| 46 | .54104 | .51323 | .48712 | .46259 | .43953 |
| 47 | .55077 | .52327 | .49739 | .47305 | .45013 |
| 48 | .56058 | .53339 | .50777 | .48363 | .46087 |
| 49 | .57043 | .54358 | .51823 | .49432 | .47173 |
| 50 | .58035 | .55384 | .52879 | .50510 | .48271 |
| 51 | .59029 | .56415 | .53940 | .51597 | .49379 |
| 52 | .60027 | .57450 | .55008 | .52692 | .50496 |
| 53 | .61026 | .58488 | .56080 | .53793 | .51620 |
| 54 | .62025 | .59528 | .57154 | .54897 | .52750 |
| 55 | .63022 | .60567 | .58230 | .56004 | .53884 |
| 56 | .64018 | .61606 | .59306 | .57113 | .55021 |
| 57 | .65012 | .62644 | .60384 | .58225 | .56163 |
| 58 | .66004 | .63681 | .61461 | .59337 | .57306 |
| 59 | .66993 | .64717 | .62538 | .60452 | .58453 |
| 60 | .67979 | .65751 | .63615 | .61567 | .59602 |
| 61 | .68963 | .66784 | .64692 | .62683 | .60754 |
| 62 | .69944 | .67815 | .65769 | .63801 | .61908 |
| 63 | .70922 | .68844 | .66843 | .64918 | .63063 |
| 64 | .71893 | .69868 | .67915 | .66032 | .64217 |
| 65 | .72859 | .70886 | .68982 | .67144 | .65369 |
| 66 | .73817 | .71897 | .70043 | .68250 | .66517 |
| 67 | .74766 | .72901 | .71096 | .69350 | .67660 |
| 68 | .75706 | .73896 | .72142 | .70443 | .68796 |
| 69 | .76637 | .74882 | .73181 | .71530 | .69928 |
| 70 | .77559 | .75861 | .74212 | .72610 | .71053 |
| 71 | .78475 | .76833 | .75237 | 1.73685 | 1.72176 |
| 72 | .79383 | .77799 | .76257 | .74756 | .73294 |
| 73 | .80279 | .78753 | .77266 | .75816 | .74403 |
| 74 | .81158 | .79689 | .78256 | .76858 | .75494 |
| 75 | .82013 | .80602 | .79223 | .77876 | .76561 |
| 76 | .82844 | .81488 | .80163 | .78867 | .77599 |
| 77 | .83648 | .82347 | .81075 | .79829 | .78609 |
| 78 | .84428 | .83182 | .81961 | .80764 | .79592 |
| 79 | .85187 | .83994 | .82824 | .81677 | .80552 |
| 80 | .85927 | .84787 | .83668 | .82569 | .81491 |
| 81 | .86645 | .85556 | .84487 | .83437 | .82404 |
| 82 | .87336 | .86299 | .85278 | .84275 | .83288 |
| 83 | .88003 | .87014 | .86042 | .85084 | .84142 |
| 84 | .88648 | .87708 | .86782 | .85870 | .84971 |
| 85 | .89273 | .88381 | .87501 | .86633 | .85778 |
| 86 | .89868 | .89021 | .88185 | .87360 | .86547 |
| 87 | .90417 | .89613 | .88818 | .88034 | .87260 |
| 88 | .90923 | .90158 | .89402 | .88655 | .87917 |
| 89 | .91396 | .90668 | .89948 | .89237 | .88533 |
| 90 | .91849 | .91156 | .90471 | .89794 | .89124 |
| 91 | .92278 | .91620 | .90968 | .90324 | .89686 |
| 92 | .92673 | .92046 | .91426 | .90812 | .90204 |
| 93 | .93027 | .92429 | .91837 | .91251 | .90670 |
| 94 | .93341 | .92768 | .92201 | .91639 | .91082 |
| 95 | .93612 | .93062 | .92516 | .91976 | .91440 |
| 96 | .93841 | .93309 | .92782 | .92259 | .91740 |
| 97 | .94044 | .93529 | .93018 | .92512 | .92009 |
| 98 | .94223 | .93723 | .93226 | .92733 | .92244 |
| 99 | .94392 | .93905 | .93421 | .92942 | .92466 |
| 100 | .94559 | .94086 | .93615 | .93149 | .92685 |
| 101 | .94709 | .94248 | .93790 | .93334 | .92882 |
| 102 | .94873 | .94424 | .93979 | .93536 | .93096 |
| 103 | .95077 | .94645 | .94216 | .93789 | .93365 |
| 104 | .95278 | .94862 | .94449 | .94037 | .93628 |
| 105 | .95570 | .95178 | .94787 | .94399 | .94012 |
| 106 | .96017 | .95662 | .95309 | .94957 | .94607 |
| 107 | .96616 | .96313 | .96010 | .95709 | .95408 |
| 108 | .97515 | .97291 | .97067 | .96843 | .96620 |
| 109 | .98900 | .98800 | .98700 | .98600 | .98500 |
Table E
| (1) Years | (2) Adjusted payout rate | ||||
|---|---|---|---|---|---|
| 3.2% | 3.4% | 3.6% | 3.8% | 4.0% | |
| 0 | .13196 | .11901 | .10774 | .09791 | .08933 |
| 1 | .11834 | .10493 | .09324 | .08303 | .07410 |
| 2 | .12113 | .10749 | .09557 | .08514 | .07601 |
| 3 | .12437 | .11050 | .09835 | .08770 | .07837 |
| 4 | .12787 | .11376 | .10138 | .09052 | .08098 |
| 5 | .13159 | .11725 | .10465 | .09357 | .08382 |
| 6 | .13549 | .12092 | .10810 | .09680 | .08684 |
| 7 | .13956 | .12476 | .11171 | .10019 | .09002 |
| 8 | .14380 | .12877 | .11549 | .10376 | .09337 |
| 9 | .14822 | .13296 | .11946 | .10751 | .09691 |
| 10 | .15282 | .13734 | .12361 | .11144 | .10063 |
| 11 | .15761 | .14190 | .12795 | .11556 | .10454 |
| 12 | .16257 | .14663 | .13247 | .11986 | .10863 |
| 13 | .16764 | .15149 | .13711 | .12428 | .12283 |
| 14 | .17279 | .15643 | .14182 | .12878 | .11712 |
| 15 | .17798 | .16140 | .14657 | .13331 | .12143 |
| 16 | .18318 | .16638 | .15133 | .13785 | .12576 |
| 17 | .18840 | .17138 | .15611 | .14241 | .13010 |
| 18 | .19367 | .17643 | .16094 | .14702 | .13449 |
| 19 | .19903 | .18157 | .16586 | .15172 | .13897 |
| 20 | .20452 | .18685 | .17092 | .15655 | .14358 |
| 21 | .21014 | .19226 | .17612 | .16153 | .14833 |
| 22 | .21591 | .19783 | .18146 | .16665 | .15324 |
| 23 | .22185 | .20356 | .18698 | .17195 | .15832 |
| 24 | .22798 | .20949 | .19270 | .17746 | .16361 |
| 25 | .23434 | .21565 | .19866 | .18321 | .16914 |
| 26 | .24094 | .22207 | .20489 | .18922 | .17494 |
| 27 | .24780 | .22875 | .21138 | .19551 | .18102 |
| 28 | .25492 | .23570 | .21814 | .20208 | .18739 |
| 29 | .26226 | .24288 | .22514 | .20889 | .19400 |
| 30 | .26982 | .25029 | .23239 | .21596 | .20088 |
| 31 | .27759 | .25792 | .23985 | .22324 | .20798 |
| 32 | .28557 | .26577 | .24755 | .23078 | .21533 |
| 33 | .29377 | .27385 | .25548 | .23855 | .22293 |
| 34 | .30217 | .28214 | .26364 | .24656 | .23077 |
| 35 | .31079 | .29065 | .27203 | .25481 | .23887 |
| 36 | .31961 | .29939 | .28065 | .26330 | .24721 |
| 37 | .32863 | .30833 | .28950 | .27202 | .25579 |
| 38 | .33784 | .31747 | .29855 | .28096 | .26460 |
| 39 | .34722 | .32680 | .30780 | .29011 | .27363 |
| 40 | .35679 | .33633 | .31727 | .29948 | .28290 |
| 41 | .36654 | .34606 | .32693 | .30908 | .29239 |
| 42 | .37648 | .35599 | .33683 | .31890 | .30213 |
| 43 | .38659 | .36610 | .34691 | .32894 | .31209 |
| 44 | .39687 | .37640 | .35720 | .33918 | .32227 |
| 45 | .40728 | .38685 | .36765 | .34961 | .33265 |
| 46 | .41785 | .39746 | .37828 | .36023 | .34323 |
| 47 | .42856 | .40823 | .38908 | .37103 | .35400 |
| 48 | .43941 | .41917 | .40006 | .38202 | .36499 |
| 49 | .45040 | .43025 | .41121 | .39320 | .37617 |
| 50 | .46153 | .44149 | .42252 | .40457 | .38756 |
| 51 | .47277 | .45286 | .43398 | .41609 | .39911 |
| 52 | .48412 | .46435 | .44558 | .42776 | .41084 |
| 53 | .49556 | .47595 | .45731 | .43958 | .42272 |
| 54 | .50707 | .48763 | .46913 | .45151 | .43473 |
| 55 | .51864 | .49939 | .48104 | .46354 | .44685 |
| 56 | .53026 | .51121 | .49303 | .47567 | .45908 |
| 57 | .54192 | .52310 | .50510 | .48789 | .47143 |
| 58 | .55363 | .53503 | .51723 | .50019 | .48387 |
| 59 | .56538 | .54703 | .52945 | .51258 | .49642 |
| 60 | .57717 | .55909 | .54173 | .52506 | .50906 |
| 61 | .58901 | .57120 | .55408 | .53763 | .52181 |
| 62 | .60087 | .58336 | .56650 | .55028 | .53466 |
| 63 | .61277 | .59556 | .57898 | .56300 | .54760 |
| 64 | .62467 | .60778 | .59149 | .57577 | .56060 |
| 65 | .63655 | .62000 | .60402 | .58857 | .57365 |
| 66 | .64842 | .63221 | .61654 | .60139 | .58672 |
| 67 | .66023 | .64439 | .62905 | .61420 | .59980 |
| 68 | .67200 | .65653 | .64154 | .62699 | .61289 |
| 69 | .68373 | .66865 | .65400 | .63978 | .62598 |
| 70 | .69541 | .68072 | .66645 | .65257 | .63908 |
| 71 | .70708 | .69279 | .67890 | .66538 | .65222 |
| 72 | .71870 | .70484 | .69134 | .67819 | .66538 |
| 73 | .73025 | .71682 | .70372 | .69095 | .67850 |
| 74 | .74163 | .72863 | .71595 | .70356 | .69147 |
| 75 | .75275 | .74019 | .72792 | .71593 | .70421 |
| 76 | .76360 | .75147 | .73962 | .72802 | .71667 |
| 77 | .77415 | .76246 | .75102 | .73981 | .72883 |
| 78 | .78443 | .77318 | .76214 | .75133 | .74073 |
| 79 | .79448 | .78365 | .77303 | .76261 | .75238 |
| 80 | .80432 | .79392 | .78371 | .77369 | .76384 |
| 81 | .81390 | .80393 | .79413 | .78450 | .77504 |
| 82 | .82317 | .81362 | .80423 | .79499 | .78590 |
| 83 | .83214 | .82301 | .81402 | .80517 | .79645 |
| 84 | .84086 | .83214 | .82355 | .81508 | .80674 |
| 85 | .84935 | .84104 | .83284 | .82476 | .81679 |
| 86 | .85745 | .84953 | .84172 | .83401 | .82640 |
| 87 | .86496 | .85741 | .84996 | .84260 | .83533 |
| 88 | .87189 | .86468 | .85757 | .85054 | .84359 |
| 89 | .87838 | .87150 | .86471 | .85799 | .85135 |
| 90 | .88461 | .87806 | .87157 | .86516 | .85881 |
| 91 | .89055 | .88430 | .87812 | .87200 | .86594 |
| 92 | .89602 | .89006 | .88416 | .87831 | .87252 |
| 93 | .90094 | .89524 | .88959 | .88400 | .87846 |
| 94 | .90530 | .89983 | .89441 | .88904 | .88372 |
| 95 | .90908 | .90381 | .89359 | .89341 | .88828 |
| 96 | .91226 | .90716 | .90211 | .89709 | .89212 |
| 97 | .91510 | .91015 | .90525 | .90038 | .89555 |
| 98 | .91759 | .91277 | .90800 | .90326 | .89855 |
| 99 | .91993 | .91524 | .91058 | .90596 | .90137 |
| 100 | .92225 | .91768 | .91315 | .90865 | .90417 |
| 101 | .92433 | .91987 | .91544 | .91104 | .90667 |
| 102 | .92659 | .92225 | .91793 | .91364 | .90938 |
| 103 | .92943 | .92524 | .92107 | .91692 | .91280 |
| 104 | .93221 | .92816 | .92413 | .92012 | .91614 |
| 105 | .93627 | .93244 | .92863 | .92483 | .92105 |
| 106 | .94257 | .93909 | .93562 | .93217 | .92872 |
| 107 | .95107 | .94808 | .94509 | .94211 | .93914 |
| 108 | .96396 | .96173 | .95950 | .95728 | .95505 |
| 109 | .98400 | .98300 | .98200 | .98100 | .98000 |
Table E
| (1) Age | (2) Adjusted payout rate | ||||
|---|---|---|---|---|---|
| 4.2% | 4.4% | 4.6% | 4.8% | 5.0% | |
| 0 | .08183 | .07527 | .06952 | .06448 | .06005 |
| 1 | .06629 | .05945 | .05344 | .04817 | .04354 |
| 2 | .06801 | .06098 | .05481 | .04939 | .04460 |
| 3 | .07017 | .06297 | .05663 | .05104 | .04611 |
| 4 | .07259 | .06520 | .05868 | .05294 | .04786 |
| 5 | .07523 | .06765 | .06096 | .05505 | .04982 |
| 6 | .07805 | .07029 | .06342 | .05734 | .05195 |
| 7 | .08103 | .07307 | .06603 | .05978 | .05423 |
| 8 | .08418 | .07603 | .06880 | .06238 | .05666 |
| 9 | .08752 | .07917 | .07175 | .06516 | .05928 |
| 10 | .09103 | .08249 | .07488 | .06811 | .06206 |
| 11 | .09473 | .08600 | .07820 | .07125 | .06503 |
| 12 | .09861 | .08968 | .08169 | .07456 | .06817 |
| 13 | .10261 | .09348 | .08530 | .07799 | .07142 |
| 14 | .10669 | .09735 | .08899 | .08148 | .07474 |
| 15 | .11080 | .10126 | .09269 | .08500 | .07808 |
| 16 | .11491 | .10516 | .09640 | .08852 | .08142 |
| 17 | .11903 | .10908 | .10012 | .09204 | .08475 |
| 18 | .12321 | .11304 | .10387 | .09560 | .08812 |
| 19 | .12747 | .11709 | .10771 | .09923 | .09156 |
| 20 | .13186 | .12126 | .11168 | .10300 | .09513 |
| 21 | .13639 | .12558 | .11578 | .10690 | .09883 |
| 22 | .14108 | .13005 | .12004 | .11094 | .10268 |
| 23 | .14594 | .13469 | .12446 | .11516 | .10669 |
| 24 | .15101 | .13954 | .12910 | .11958 | .11091 |
| 25 | .15632 | .14464 | .13398 | .12426 | .11537 |
| 26 | .16191 | .15001 | .13914 | .12920 | .12011 |
| 27 | .16778 | .15567 | .14459 | .13444 | .12514 |
| 28 | .17394 | .16162 | .15032 | .13997 | .13046 |
| 29 | .18035 | .16782 | .15632 | .14575 | .13604 |
| 30 | .18702 | .17429 | .16259 | .15181 | .14189 |
| 31 | .19393 | .18100 | .16909 | .15811 | .14799 |
| 32 | .20109 | .18797 | .17586 | .16468 | .15436 |
| 33 | .20851 | .19520 | .18290 | .17152 | .16100 |
| 34 | .21618 | .20268 | .19018 | .17861 | .16789 |
| 35 | .22411 | .21043 | .19775 | .18599 | .17508 |
| 36 | .23228 | .21844 | .20558 | .19363 | .18253 |
| 37 | .24071 | .22670 | .21367 | .20154 | .19026 |
| 38 | .24938 | .23521 | .22201 | .20971 | .19825 |
| 39 | .25827 | .24396 | .23060 | .21814 | .20650 |
| 40 | .26741 | .25295 | .23945 | .22682 | .21502 |
| 41 | .27679 | .26220 | .24855 | .23577 | .22381 |
| 42 | .28642 | .27172 | .25793 | .24501 | .23289 |
| 43 | .29629 | .28147 | .26756 | .25450 | .24224 |
| 44 | .30639 | .29147 | .27745 | .26426 | .25186 |
| 45 | .31669 | .30169 | .28756 | .27426 | .26173 |
| 46 | .32722 | .31213 | .29791 | .28450 | .27185 |
| 47 | .33795 | .32280 | .30849 | .29498 | .28222 |
| 48 | .34890 | .33370 | .31932 | .30573 | .29287 |
| 49 | .36007 | .34482 | .33039 | .31672 | .30377 |
| 50 | .37144 | .35617 | .34170 | .32797 | .31494 |
| 51 | .38301 | .36773 | .35322 | .33944 | .32635 |
| 52 | .39476 | .37948 | .36495 | .35113 | .33799 |
| 53 | .40668 | .39141 | .37688 | .36304 | .34986 |
| 54 | .41874 | .40350 | .38897 | .37512 | .36191 |
| 55 | .43093 | .41574 | .40123 | .38739 | .37416 |
| 56 | .44324 | .42811 | .41364 | .39980 | .38657 |
| 57 | .45568 | .44062 | .42620 | .41240 | .39918 |
| 58 | .46823 | .45325 | .43890 | .42514 | .41194 |
| 59 | .48091 | .46603 | .45175 | .43805 | .42489 |
| 60 | .49370 | .47893 | .46475 | .45112 | .43802 |
| 61 | .50661 | .49198 | .47790 | .46436 | .45133 |
| 62 | .51963 | .50515 | .49120 | .47776 | .46481 |
| 63 | .53275 | .51844 | .50463 | .49131 | .47846 |
| 64 | .54596 | .53182 | .51817 | .50498 | .49225 |
| 65 | .55922 | .54528 | .53180 | .51877 | .50616 |
| 66 | .57253 | .55880 | .54551 | .53264 | .52018 |
| 67 | .58586 | .57235 | .55926 | .54657 | .53427 |
| 68 | .59921 | .58594 | .57306 | .56057 | .54845 |
| 69 | .61258 | .59956 | .58692 | .57463 | .56270 |
| 70 | .62597 | .61322 | .60082 | .58877 | .57704 |
| 71 | .63941 | .62695 | .61481 | .60300 | .59149 |
| 72 | .65289 | .64073 | .62887 | .61731 | .60605 |
| 73 | .66635 | .65449 | .64293 | .63165 | .62064 |
| 74 | .67976 | .66814 | .65688 | .64588 | .63514 |
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