Prepared for: Donor name
| A. Input Assumptions | |||
|---|---|---|---|
| Date of transfer | May 31, 2023 | ||
| Fair market value of property transferred | $100,000.00 | ||
| Nearest age on the date of the gift for Beneficiary 1 is | 88 | ||
| Nearest age on the date of the gift for Beneficiary 2 is | 88 | ||
| Date of first payment | December 30, 2015 | ||
| Annuity starting date (payment period before 1st payment) | September 30, 2015 | ||
| Annual annuity rate for immediate annuity | 6.7% | ||
| Payment frequency | Quarterly | ||
| Prorate first payment or Full first payment? | Prorate | ||
| Deferred annuity interest adjustment factor | 1.0425 | ||
| Annual annuity rate adjusted for deferral | 7% | ||
| IRC Sec. 7520(a) election to use 4/2023 discount rate of | 5% | ||
| The mortality table is based on the census taken in | 2000 | ||
| B. Present Value of Remainder Interest - Two Life Deferred | |||
|---|---|---|---|
| 1st Annuitant |
2nd Annuitant |
||
| 1. | Age nearest to annuity starting date | 81 | 81 |
| 2. | Age nearest to date of transfer | 88 | 88 |
| 3. | Value of Dx from IRS Pub. 1457, Table H based on | ||
| (a) Line 1 age | 916.4959 | 916.4959 | |
| (b) Line 2 age | 335.46 | 335.46 | |
| 4. | Line 3(a) divided by Line 3(b) | 2.732057 | 2.732057 |
| 5. | Value of Lx from IRS mortality table based on | ||
| (a) Line 1 age | 47694 | 47694 | |
| (b) Line 2 age | 24564 | 24564 | |
| 6. | Line 5(a) divided by Line 5(b) | 1.941622 | 1.941622 |
| 7. | Unadjusted joint life deferred discount factor (Line 4 above * Line 6 in other column) | 5.304622 | 5.304622 |
| 8. | Unadjusted value of $1 of single life annuity from Pub. 1457, Table S based on Line 1 age | 5.9862 | 5.9862 |
| 9. | Adjustment factor based on payment frequency from Pub. 1457, Table K | 1.0186 | 1.0186 |
| 10. | Adjusted value of $1 of single life annuity (Line 8 * Line 9) | 6.0975 | 6.0975 |
| 11. | Value of $1 of deferred single life annuity (Line 4 * Line 10) | 16.6587 | 16.6587 |
| 12. | Factor from Table R(2) (for remainder interest) | 0.60415 | |
| 13. | 1.00000 minus Line 12 (factor for life estate) | 0.39585 | |
| 14. | Unadjusted value for $1 of joint and survivor annuity (Line 13 divided by AFR = factor for annuity) | 7.917 | |
| 15. | Adjusted value of $1 of joint and survivor annuity (Line 9 * Line 14) | 8.0643 | |
| 16. | Adjusted value of $1 of joint life annuity (Line 10 (1st) + line 10 (2nd) - Line 15) | 4.1307 | |
| 17. | Sum of Line 7 for first and second annuitant | 10.609244 | |
| 18. | Deferred discount factor (1/2 of Line 17) | 5.304622 | |
| 19. | Value of $1 of deferred joint life annuity (Line 16 * Line 18) | 21.9118 | |
| 20. | Value of $1 of deferred annuity (Line 11 (1st) + Line 11 (2nd) - Line 19 | 11.4056 | |
| 21. | Annual annuity rate for immediate annuity | 6.7% | |
| 22. | Deferred annuity interest adjustment factor | 1.0425 | |
| 23. | Deferred annuity rate (Line 21 * Line 22) | 7% | |
| 24. | Net fair market value paid for annuity | $100,000.00 | |
| 25. | Annuity amount payable on an annual basis | $7,000.00 | |
| 26. | Present value of annuity (Line 20 * Line 25) | $79,839.20 | |
| 27. | Minimum value of annuity (lesser of Line 24 and Line 26) | $79,839.20 | |
| 28. | Present value of remainder interest (Line 24 - Line 27) the Income tax deduction | $20,160.80 | |
Depending on the type of asset you contribute, a portion of your payment may be taxable to you as a combination of ordinary income, long-term capital gain, and a tax-free return of principal. This report has been calculated assuming a contribution of cash. Each of your next 7.9 years payments of $7,000.00 will contain $4,927.72 of tax-free income and $2,072.28 of ordinary income. All income will be ordinary after 7.9 years.
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.
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