Prepared for: Donor name
A. Input Assumptions | |
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Date of transfer | January 18, 2021 |
Fair market value of property transferred | $1,000,000.00 |
The term income interest of the trust will last | 20 years |
Unitrust payout rate | 5% |
Payment frequency | Quarterly |
Is payment at beginning or end of payment period | End |
Number of months between the valuation date and the first payout rate for the first full taxable year of the trust | 3 |
IRC Sec. 7520(a) election to use 11/2020 discount rate of | 0.4% |
The mortality table is based on the census taken in | 2000 |
B. Calculation of Present Value of Remainder Interest Factor: (Interpolation of Table U Factor for Term Certain) | ||
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1. | Factor for Table F based on the payment period, the number of months between the valuation date and the first payment date, and the discount rate | -1 |
2. | Adjusted payout rate (Table F factor * payout rate) | -0.05% |
3. | The nearest usable payout rate less than the Line 2 rate | -0.048% |
4. | Line 2 minus Line 3 | -0.002% |
5. | Line 4 divided by .20 percent | -1 |
6. | Factor from Table U at the Line 3 rate | -1 |
7. | Factor from Table U at the rate .20 percent higher than the Line 3 rate | -1 |
8. | Line 6 minus Line 7 | 0 |
9. | Line 8 times Line 5 (Interpolation adjustment) | 0 |
10. | Present value of remainder interest factor (Line 6 - Line 9) | -1 |
C. Calculation of Income Tax Deduction Allowed for Grantor Trust | ||
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1. | Fair market value of property transferred | $1,000,000.00 |
2. | Present value of remainder interest in unitrust factor (from Section B) | -1 |
3. | Present value of remainder interest - non-deductible remainder (Line 1 * Line 2) | $-1,000,000.00 |
4. | Present value of unitrust interest (Line 1 - Line 3) | $2,000,000.00 |
5. | Percent of property that will revert to grantor (Line 3 / Line 1) | -1% |
6. | Is income tax deduction allowed? (Line 5 > 5%) | No |
7. | Income tax deduction | $0.00 |
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.