Charitable Remainder Annuity Trust - One Life

Book page posted in on 7 September 2010
audience: | last updated: 16 April 2014
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A. Input Assumptions
Date of transfer September 1, 2014
Fair market value of property transferred $1,000,000.00
Nearest age on the date of the gift for Beneficiary 1 is 65
Annual annuity rate 5%
Payment frequency Quarterly
Is payment at beginning or end of payment period End
IRC Sec. 7520(a) election to use 7/2014 discount rate of 2.2%
The mortality table is based on the census taken in 2000
B. Calculation of Present Value of Remainder Interest (for Number of Lives)
1. Fair market value of property transferred $1,000,000.00
2. Annual annuity rate 5%
3. Annuity amount payable on an annual basis $50,000.00
4. Factor for present worth of an annuity (based on Table S) 14.0064
5. Line 3 annuity amount times Line 4 factor $700,320.00
6. Adjustment factor for payment frequency (from Table K) 1.0082
7. Adjusted annuity value (Line 5 * Line 6) $706,062.62
8. Amount of first annuity payment if payment is made at beginning of period for a non-term annuity trust (otherwise 0)
$0.00
9. Present value of annuity interest (Line 7 + Line 8) $706,062.62
10. Minimum value of annuity interest (lesser of Line 1 and Line 9) $706,062.62
11. Present value of remainder interest = the tax deduction (Line 1 - Line 10) $293,937.38
C. Calculation of Tax Deduction for Charitable Remainder Annuity Trusts
Fair market value of property transferred $1,000,000.00
Present value of remainder interest in annuity trust factor as a percent 29.39%
Present value of remainder interest = the tax deduction (Line 1 * Line 2) $293,937.38
10% remainder interest test Passed
Probability that the annuitant will survive to the exhaustion of the fund 15.95%
5% probability test Failed

NOTE: This calculation is provided for educational purposes only. The type of assets transferred, the actual date of the gift, and other factors may have a material effect on the amount or use of your deduction. You are advised to seek the advice of your tax advisors before implementing a gift of this type.

Calculations provided by Planned Giving Design Center, LLC, Copyright 2014 PhilanthroTec, Inc.

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