Charitable Remainder Annuity Trust - One Life

Book page posted in on 7 September 2010
audience: | last updated: 16 April 2014

Prepared for: enter donor name

A. Input Assumptions
Date of transfer June 19, 2018
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 4/2018 discount rate of 7.2%
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) 9.0393
5. Line 3 annuity amount times Line 4 factor $451,965.00
6. Adjustment factor for payment frequency (from Table K) 1.0266
7. Adjusted annuity value (Line 5 * Line 6) $463,987.27
8. Amount of first annuity payment if payment is made at beginning of period for a non-term annuity trust (otherwise 0)
9. Present value of annuity interest (Line 7 + Line 8) $463,987.27
10. Minimum value of annuity interest (lesser of Line 1 and Line 9) $463,987.27
11. Present value of remainder interest = the tax deduction (Line 1 - Line 10) $536,012.73
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 53.6%
Present value of remainder interest = the tax deduction (Line 1 * Line 2) $536,012.73
10% remainder interest test Passed
Probability that the annuitant will survive to the exhaustion of the fund 0%
5% probability test Passed

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 2018

7520 Rates: June 3.4% May 3.2% April 3.2%

Already a member?

Learn, Share, Gain Insight, Connect, Advance

Join Today For Free!

Join the PGDC community and…

  • Learn through thousands of pages of content, newsletters and forums
  • Share by commenting on and rating content, answering questions in the forums, and writing
  • Gain insight into other disciplines in the field
  • Connect – Interact – Grow
  • Opt-in to Include your profile in our searchable national directory. By default, your identity is protected

…Market yourself to a growing industry