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CFR > Title 26 - Internal Revenue > CHAPTER I—INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY > SUBCHAPTER A—INCOME TAX (Parts 1–19) > PART 1—INCOME TAXES > 1.664-4A—Valuation of charitable remainder interests for which the valuation date is before May 1, 2009.

CFR

1.664-4A—Valuation of charitable remainder interests for which the valuation date is before May 1, 2009.

(a) Valuation of charitable remainder interests for which the valuation date is before January 1, 1952. There was no provision for the qualification of a charitable remainder unitrust under section 664 until 1969. See § 20.2031-7A(a) of this chapter (Estate Tax Regulations) for the determination of the present value of a charitable interest for which the valuation date is before January 1, 1952.
(b) Valuation of charitable remainder interests for which the valuation date is after December 31, 1951, and before January 1, 1971. No charitable deduction is allowable for a transfer to a unitrust for which the valuation date is after the effective dates of the Tax Reform Act of 1969 unless the unitrust meets the requirements of section 664. See § 20.2031-7A(b) of this chapter (Estate Tax Regulations) for the determination of the present value of a charitable remainder interest for which the valuation date is after December 31, 1951, and before January 1, 1971.
(c) Valuation of charitable remainder unitrusts having certain payout sequences for transfers for which the valuation date For the determination of the present value of a charitable remainder unitrust for which the valuation date is after December 31, 1970, and before December 1, 1983, see § 20.2031-7A(c) of this chapter (Estate Tax Regulations) and former § 1.664-4(d) (as contained in the 26 CFR part 1 edition revised as of April 1, 1994).
(d) Valuation of charitable remainder unitrusts having certain payout sequences for transfers for which the valuation date is after November 30, 1983, and before May 1, 1989— (1) In general. Except as otherwise provided in paragraph (d)(2) of this section, in the case of transfers made after November 30, 1983, for which the valuation date is before May 1, 1989, the present value of a remainder interest that is dependent on a term of years or the termination of the life of one individual is determined under paragraphs (d)(3) through (d)(6) of this section, provided that the amount of the payout as of any payout date during any taxable year of the trust is not larger than the amount that the trust could distribute on such date under § 1.664-3(a)(1)(v) if the taxable year of the trust were to end on such date. The present value of the remainder interest in the trust is determined by computing the adjusted payout rate (as defined in paragraph (d)(3) of this section) and following the procedure outlined in paragraph (d)(4) or (d)(5) of this section, whichever is applicable. The present value of a remainder interest that is dependent on a term of years is computed under paragraph (d)(4) of this section. The present value of a remainder interest that is dependent on the termination of the life of one individual is computed under paragraph (d)(5) of this section. See paragraph (d)(2) of this section for testamentary transfers for which the valuation date is after November 30, 1983, and before August 9, 1984.
(2) Rules for determining the present value for testamentary transfers where the decedent dies after November 30, 1983, and before August 9, 1984. For purposes of section 2055 or 2106, if—
(i) The decedent dies after November 30, 1983, and before August 9, 1984; or
(ii) On December 1, 1983, the decedent was mentally incompetent so that the disposition of the property could not be changed, and the decedent died after November 30, 1983, without regaining competency to dispose of the decedent's property, or died within 90 days of the date on which the decedent first regained competency, the present value determined under this section of a remainder interest is determined in accordance with paragraph (d)(1) and paragraphs (d)(3) through (d)(6) of this section, or § 1.664-4A(c), at the option of the taxpayer.
(3) Adjusted payout rate. The adjusted payout rate is determined by multiplying the fixed percentage described in paragraph (a)(1)(i)(a) of § 1.664-3 by the figure in column (2) of Table F(1) which describes the payout sequence of the trust opposite the number in column (1) of Table F(1) which corresponds to the number of months by which the valuation date for the first full taxable year of the trust precedes the first payout date for such taxable year. If the governing instrument does not prescribe when the distribution shall be made during the taxable year of the trust, see § 1.664-4(a). In the case of a trust having a payout sequence for which no figures have been provided by Table F (1) and in the case of a trust which determines the fair market value of the trust assets by taking the average of valuations on more than one date during the taxable year, see § 1.664-4(b).
(4) Period is a term of years. If the period described in § 1.664-3(a)(5) is a term of years, the factor which is used in determining the present value of the remainder interest is the factor under the appropriate adjusted payout rate in Table D in § 1.664-4(e)(6) that corresponds to the number of years in the term. If the adjusted payout rate is an amount which is between adjusted payout rates for which factors are provided in Table D, a linear interpolation must be made. The present value of the remainder interest is determined by multiplying the net fair market value (as of the appropriate valuation date) of the property placed in trust by the factor determined under this paragraph (d)(4). For purposes of this section, the term appropriate valuation date means the date on which the property is transferred to the trust by the donor except that, for purposes of section 2055 or 2106, it means the date of death unless the alternate valuation date is elected in accordance with section 2032 and the regulations thereunder in which event it means the alternate valuation date. If the adjusted payout rate is greater than 14 percent, see § 1.664-4(b). The application of this paragraph (d)(4) may be illustrated by the following example:

Code of Federal Regulations

Example. D transfers $100,000 to a charitable remainder unitrust on January 1, 1985. The trust instrument requires that the trust pay to D semiannually (on June 30 and December 31) 10 percent of the fair market value of the trust assets as of June 30th for a term of 15 years. The adjusted payout rate is 9.767 percent (10%×0.976731). The present value of the remainder interest is $21,404.90, computed as follows:
Factor at 9.6 percent for 15 years 0.220053
Factor at 9.8 percent for 15 years .212862
Difference .007191
[Please see PDF for Formula: EC14NO91.134 ] 9.767% − 9.6 ÷ 0.2% == ÷ .007191 X === .006004
Factor at 9.6 percent for 15 years 0.220053
Less: X .006004
Interpolated factor .214049
Present value of remainder interest===$100,000×0.214049===$21,404.90
(5) Period is the life of one individual. If the period described in paragraph (a)(5) of § 1.664-3 is the life of one individual, the factor that is used in determining the present value of the remainder interest is the factor under the appropriate adjusted payout rate in column (2) of Table E in paragraph (d)(6) of this section opposite the number in column (1) that corresponds to the age of the individual whose life measures the period. For purposes of the computations described in this paragraph (b)(5), the age of an individual is to be taken as the age of that individual at the individual's nearest birthday. If the adjusted payout rate is an amount which is between adjusted payout rates for which factors are provided for in Table E, a linear interpolation must be made. The present value of the remainder interest is determined by multiplying the net fair market value (as of the appropriate valuation date) of the property placed in trust by the factor determined under this paragraph (b)(5). If the adjusted payout rate is greater than 14 percent, see § 1.664-4(b). The application of this paragraph may be illustrated by the following example:

Code of Federal Regulations

Example. A, who will be 50 years old on April 15, 1985, transfers $100,000 to a charitable remainder unitrust on January 1, 1985. The trust instrument requires that the trust pay to A at the end of each taxable year of the trust 10 percent of the fair market value of the trust assets as of the beginning of each taxable year of the trust. The adjusted payout rate is 9.091 percent (10 percent×.909091). The present value of the remainder interest is $15,259.00 computed as follows:
Factor at 9 percent at age 50 0.15472
Factor at 9.2 percent at age 50 .15003
Difference .00469
9.091%−9%÷0.2%=X÷0.00469
x=0.00213
Factor at 9 percent at age 50 .15472
Less: X .00213
Interpolated factor .15259
Present value of remainder interest=
$100,000×0.15259=$15,259.00
(6) Actuarial tables for transfers for which the valuation date is after November 30, 1983, and before May 1, 1989. Table D in § 1.664-4(e)(6) and the following tables shall be used in the application of the provisions of this section:
Table E
Table E—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Unitrust Having the Adjusted Payout Rate Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
(1) Age (2) Adjusted payout rate
2.2% 2.4% 2.6% 2.8% 3.0%
0 .23253 .20635 .18364 .16394 .14683
1 .22196 .19506 .17170 .15139 .13372
2 .22597 .19884 .17523 .15468 .13676
3 .23039 .20304 .17920 .15840 .14024
4 .23503 .20747 .18340 .16237 .14397
5 .23988 .21211 .18783 .16656 .14793
6 .24489 .21693 .19243 .17094 .15207
7 .25004 .22189 .19718 .17546 .15637
8 .25534 .22701 .20209 .18016 .16084
9 .26080 .23230 .20718 .18503 .16549
10 .26640 .23774 .21243 .19008 .17031
11 .27217 .24335 .21786 .19530 .17532
12 .27807 .24911 .22344 .20068 .18049
13 .28407 .25497 .22913 .20618 .18579
14 .29013 .26089 .23489 .21175 .19115
15 .29621 .26684 .24067 .21735 .19655
16 .30229 .27279 .24647 .22296 .20196
17 .30838 .27876 .25228 .22859 .20739
18 .31451 .28477 .25813 .23427 .21287
19 .32070 .29085 .26407 .24003 .21844
20 .32699 .29704 .27012 .24591 .22413
21 .33339 .30335 .27629 .25192 .22996
22 .33991 .30977 .28259 .25807 .23592
23 .34655 .31634 .28904 .26437 .24205
Code of Federal Regulations 271
24 .35334 .32306 .29566 .27085 .24836
25 .36031 .32998 .30248 .27754 .25490
26 .36746 .33710 .30952 .28446 .26167
27 .37481 .34443 .31678 .29161 .26869
28 .38236 .35197 .32427 .29901 .27596
29 .39006 .35968 .33194 .30660 .28344
30 .39793 .36757 .33980 .31439 .29113
31 .40594 .37561 .34783 .32237 .29902
32 .41410 .38383 .35605 .33054 .30711
33 .42240 .39220 .36444 .33890 .31541
34 .43084 .40072 .37299 .34744 .32389
35 .43942 .40941 .38172 .35617 .33258
36 .44813 .41824 .39061 .36508 .34146
37 .45696 .42720 .39966 .37416 .35053
38 .46591 .43630 .40885 .38339 .35977
39 .47496 .44552 .41818 .39278 .36917
40 .48412 .45486 .42765 .40232 .37875
41 .49338 .46432 .43725 .41201 .38849
42 .50275 .47391 .44700 .42187 .39840
43 .51221 .48360 .45686 .43186 .40847
44 .52175 .49340 .46685 .44199 .41870
45 .53136 .50327 .47693 .45223 .42905
46 .54104 .51323 .48712 .46259 .43953
47 .55077 .52327 .49739 .47305 .45013
48 .56058 .53339 .50777 .48363 .46087
49 .57043 .54358 .51823 .49432 .47173
50 .58035 .55384 .52879 .50510 .48271
51 .59029 .56415 .53940 .51597 .49379
52 .60027 .57450 .55008 .52692 .50496
53 .61026 .58488 .56080 .53793 .51620
54 .62025 .59528 .57154 .54897 .52750
55 .63022 .60567 .58230 .56004 .53884
56 .64018 .61606 .59306 .57113 .55021
57 .65012 .62644 .60384 .58225 .56163
58 .66004 .63681 .61461 .59337 .57306
59 .66993 .64717 .62538 .60452 .58453
60 .67979 .65751 .63615 .61567 .59602
61 .68963 .66784 .64692 .62683 .60754
62 .69944 .67815 .65769 .63801 .61908
63 .70922 .68844 .66843 .64918 .63063
64 .71893 .69868 .67915 .66032 .64217
65 .72859 .70886 .68982 .67144 .65369
66 .73817 .71897 .70043 .68250 .66517
67 .74766 .72901 .71096 .69350 .67660
68 .75706 .73896 .72142 .70443 .68796
69 .76637 .74882 .73181 .71530 .69928
70 .77559 .75861 .74212 .72610 .71053
71 .78475 .76833 .75237 1.73685 1.72176
72 .79383 .77799 .76257 .74756 .73294
73 .80279 .78753 .77266 .75816 .74403
74 .81158 .79689 .78256 .76858 .75494
75 .82013 .80602 .79223 .77876 .76561
76 .82844 .81488 .80163 .78867 .77599
77 .83648 .82347 .81075 .79829 .78609
78 .84428 .83182 .81961 .80764 .79592
79 .85187 .83994 .82824 .81677 .80552
80 .85927 .84787 .83668 .82569 .81491
81 .86645 .85556 .84487 .83437 .82404
82 .87336 .86299 .85278 .84275 .83288
83 .88003 .87014 .86042 .85084 .84142
84 .88648 .87708 .86782 .85870 .84971
85 .89273 .88381 .87501 .86633 .85778
86 .89868 .89021 .88185 .87360 .86547
87 .90417 .89613 .88818 .88034 .87260
88 .90923 .90158 .89402 .88655 .87917
89 .91396 .90668 .89948 .89237 .88533
90 .91849 .91156 .90471 .89794 .89124
91 .92278 .91620 .90968 .90324 .89686
92 .92673 .92046 .91426 .90812 .90204
93 .93027 .92429 .91837 .91251 .90670
94 .93341 .92768 .92201 .91639 .91082
95 .93612 .93062 .92516 .91976 .91440
96 .93841 .93309 .92782 .92259 .91740
97 .94044 .93529 .93018 .92512 .92009
98 .94223 .93723 .93226 .92733 .92244
99 .94392 .93905 .93421 .92942 .92466
100 .94559 .94086 .93615 .93149 .92685
101 .94709 .94248 .93790 .93334 .92882
102 .94873 .94424 .93979 .93536 .93096
103 .95077 .94645 .94216 .93789 .93365
104 .95278 .94862 .94449 .94037 .93628
105 .95570 .95178 .94787 .94399 .94012
106 .96017 .95662 .95309 .94957 .94607
107 .96616 .96313 .96010 .95709 .95408
108 .97515 .97291 .97067 .96843 .96620
109 .98900 .98800 .98700 .98600 .98500
Table E <
Tips
Table E—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Unitrust Having the Adjusted Payout Rate Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
(1) Years (2) Adjusted payout rate
3.2% 3.4% 3.6% 3.8% 4.0%
0 .13196 .11901 .10774 .09791 .08933
1 .11834 .10493 .09324 .08303 .07410
2 .12113 .10749 .09557 .08514 .07601
3 .12437 .11050 .09835 .08770 .07837
4 .12787 .11376 .10138 .09052 .08098
5 .13159 .11725 .10465 .09357 .08382
6 .13549 .12092 .10810 .09680 .08684
7 .13956 .12476 .11171 .10019 .09002
8 .14380 .12877 .11549 .10376 .09337
9 .14822 .13296 .11946 .10751 .09691
10 .15282 .13734 .12361 .11144 .10063
11 .15761 .14190 .12795 .11556 .10454
12 .16257 .14663 .13247 .11986 .10863
13 .16764 .15149 .13711 .12428 .12283
14 .17279 .15643 .14182 .12878 .11712
15 .17798 .16140 .14657 .13331 .12143
16 .18318 .16638 .15133 .13785 .12576
17 .18840 .17138 .15611 .14241 .13010
18 .19367 .17643 .16094 .14702 .13449
19 .19903 .18157 .16586 .15172 .13897
20 .20452 .18685 .17092 .15655 .14358
21 .21014 .19226 .17612 .16153 .14833
22 .21591 .19783 .18146 .16665 .15324
23 .22185 .20356 .18698 .17195 .15832
24 .22798 .20949 .19270 .17746 .16361
25 .23434 .21565 .19866 .18321 .16914
26 .24094 .22207 .20489 .18922 .17494
27 .24780 .22875 .21138 .19551 .18102
28 .25492 .23570 .21814 .20208 .18739
29 .26226 .24288 .22514 .20889 .19400
30 .26982 .25029 .23239 .21596 .20088
31 .27759 .25792 .23985 .22324 .20798
32 .28557 .26577 .24755 .23078 .21533
Code of Federal Regulations 272
33 .29377 .27385 .25548 .23855 .22293
34 .30217 .28214 .26364 .24656 .23077
35 .31079 .29065 .27203 .25481 .23887
36 .31961 .29939 .28065 .26330 .24721
37 .32863 .30833 .28950 .27202 .25579
38 .33784 .31747 .29855 .28096 .26460
39 .34722 .32680 .30780 .29011 .27363
40 .35679 .33633 .31727