Prepared for: Donor name
| A. Input Assumptions | |
|---|---|
| Date of transfer | September 22, 2023 |
| 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 7/2023 discount rate of | 4.6% |
| The mortality table is based on the census taken in | 2010 |
| B. Calculation of Present Value of Remainder Interest Factor: (Interpolation of Table U Factor for Term Certain) | ||
|---|---|---|
| 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 | 0.97236 |
| 2. | Adjusted payout rate (Table F factor * payout rate) | 4.86% |
| 3. | The nearest usable payout rate less than the Line 2 rate | 4.8% |
| 4. | Line 2 minus Line 3 | 0.06% |
| 5. | Line 4 divided by .20 percent | 0.309 |
| 6. | Factor from Table U at the Line 3 rate | 0.373886 |
| 7. | Factor from Table U at the rate .20 percent higher than the Line 3 rate | 0.358486 |
| 8. | Line 6 minus Line 7 | 0.0154 |
| 9. | Line 8 times Line 5 (Interpolation adjustment) | 0.004759 |
| 10. | Present value of remainder interest factor (Line 6 - Line 9) | 0.369127 |
| C. Calculation of Income Tax Deduction Allowed for Grantor Trust | ||
|---|---|---|
| 1. | Fair market value of property transferred | $1,000,000.00 |
| 2. | Present value of remainder interest in unitrust factor (from Section B) | 0.369127 |
| 3. | Present value of remainder interest - non-deductible remainder (Line 1 * Line 2) | $369,127.00 |
| 4. | Present value of unitrust interest (Line 1 - Line 3) | $630,873.00 |
| 5. | Percent of property that will revert to grantor (Line 3 / Line 1) | 36.91% |
| 6. | Is income tax deduction allowed? (Line 5 > 5%) | Yes |
| 7. | Income tax deduction | $630,873.00 |
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.
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