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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 > 1.664-4T—Calculation of the fair market value of the remainder interest in a charitable remainder unitrust (temporary).

CFR

1.664-4T—Calculation of the fair market value of the remainder interest in a charitable remainder unitrust (temporary).

(a) [Reserved] For further guidance, see § 1.664-4(a).
(1) Life contingencies determined as to each life involved, from the values of lx set forth in Table 2000CM contained in § 20.2031-7T(d)(7) in the case of transfers for which the valuation date is on or after May 1, 2009; or from Table 90CM contained in § 20.2031-7A(f)(4) in the case of transfer for which the valuation date is after April 30, 1999, and before May 1, 2009. See § 20.2031-7A(a) through (e), whichever is applicable, for transfers for which the valuation date is before May 1, 1999; (a)(2) through (c) [Reserved] For further guidance, see § 1.664-4(a)(2) through (c).
(d) Valuation. The fair market value of a remainder interest in a charitable remainder unitrust (as described in § 1.664-3) for transfers for which the valuation date is on or after May 1, 2009, is its present value determined under paragraph (e) of this section. The fair market value of a remainder interest in a charitable remainder unitrust (as described in § 1.664-3) for transfers for which the valuation date is before May 1, 2009, is its present value determined under the following sections:
Valuation dates Applicable regulations
After Before
01-01-52 1.664-4A(a).
12-31-51 01-01-71 1.664-4A(b).
12-31-70 12-01-83 1.664-4A(c).
11-30-83 05-01-89 1.664-4A(d).
04-30-89 05-01-99 1.664-4A(e).
04-30-99 05-01-09 1.664-4A(f).
(e) Valuation of charitable remainder unitrusts having certain payout sequences for transfers for which the valuation date is on or after May 1, 2009— (1) In general. Except as otherwise provided in paragraph (e)(2) of this section, in the case of transfers for which the valuation date is on or after May 1, 2009, the present value of a remainder interest is determined under paragraphs (e)(3) through (e)(7) 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. See, however, § 1.7520-3(b) (relating to exceptions to the use of the prescribed tables under certain circumstances).
(2) Transitional rules for valuation of charitable remainder unitrusts. (i) For purposes of sections 2055, 2106, or 2624, if on May 1, 2009, the decedent was mentally incompetent so that the disposition of the property could not be changed, and the decedent died on or after May 1, 2009, without having regained competency to dispose of the decedent's property, or the decedent died within 90 days of the date that the decedent first regained competency on or after May 1, 2009, the present value of a remainder interest under this section is determined as if the valuation date with respect to the decedent's gross estate is either before or after May 1, 2009, at the option of the decedent's executor.
(ii) For purposes of sections 170, 2055, 2106, 2522, or 2624, in the case of transfers to a charitable remainder unitrust for which the valuation date is on or after May 1, 2009, and before July 1, 2009, the present value of a remainder interest based on one or more measuring lives is determined under this section by use of the section 7520 interest rate for the month in which the valuation date occurs (see §§ 1.7520-1(b) and 1.7520-2(a)(2)) and the appropriate actuarial tables under either paragraph (e)(7) of this section or § 1.664-4A(f)(6), at the option of the donor or the decedent's executor, as the case may be.
(iii) For purposes of paragraphs (e)(2)(i) and (e)(2)(ii) of this section, where the donor or decedent's executor is given the option to use the appropriate actuarial tables under either paragraph (e)(7) of this section or § 1.664-4A(f)(6), the donor or decedent's executor must use the same actuarial table with respect to each individual transaction and with respect to all transfers occurring on the valuation date (for example, gift and income tax charitable deductions with respect to the same transfer must be determined based on the same tables, and all assets includible in the gross estate and/or estate tax deductions claimed must be valued based on the same tables).
(3) and (4) [Reserved] For further guidance, see § 1.664-4(e)(3) and (e)(4).
(5) Period is the life of one individual. (i) If the period described in § 1.664-3(a)(5) is the life of one individual, the factor that is used in determining the present value of the remainder interest for transfers for which the valuation date is on or after May 1, 2009, is the factor in Table U(1) in paragraph (e)(7) of this section under the appropriate adjusted payout. For purposes of the computations described in this paragraph (e)(5), the age of an individual is the age of that individual at the individual's nearest birthday. If the adjusted payout rate is an amount that is between adjusted payout rates for which factors are provided in the appropriate table, 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 valuation date as determined in § 1.664-4(e)(4)) of the property placed in trust by the factor determined under this paragraph (e)(5). If the adjusted payout rate is between 4.2 and 14 percent, see paragraph (e)(7) of this section. If the adjusted payout rate is below 4.2 percent or greater than 14 percent, see § 1.664-4(b).
(ii) The application of paragraph (e)(5)(i) of this section may be illustrated by the following example:

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Example. A, who is 44 years and 11 months old, transfers $100,000 to a charitable remainder unitrust on January 1st. The trust instrument requires that the trust pay to A semiannually (on June 30 and December 31) 8 percent of the fair market value of the trust assets as of January 1st during A's life. The section 7520 rate for January is 6.6 percent. Under Table F(6.6) in § 1.664-4(e)(6) , the appropriate adjustment factor is .953317 for semiannual payments payable at the end of the semiannual period. The adjusted payout rate is 7.627% (8% × .953317). Based on the remainder factors in Table U(1) in this section, the present value of the remainder interest is $11,075.00, computed as follows:
Factor at 7.6 percent at age 45 .11141
Factor at 7.8 percent at age 45 .10653
Difference .00488
Interpolation adjustment:
[Please see PDF for Formula: ER07MY09.023 ]
Factor at 7.6 percent at age 45 .11141
Less: Interpolation adjustment .00066
Interpolated Factor .11075
Present value of remainder interest:
($100,000 × .11075) $11,075.00
(6) [Reserved] For further guidance, see § 1.664-4(e)(6).
(7) Actuarial Table U(1) for transfers for which the valuation date is on or after May 1, 2009. For transfers for which the valuation date is on or after May 1, 2009, the present value of a charitable remainder unitrust interest that is dependent on the termination of a life interest is determined by using the section 7520 rate, Table U(1) in this paragraph (e)(7) and Table F(4.2) through (14.0) in § 1.664-4(e)(6). See, however, § 1.7520-3(b) (relating to exceptions to the use of prescribed tables under certain circumstances). Many actuarial factors not contained in the following tables are contained in Internal Revenue Service Publication 1458, “Actuarial Valuations Version 3B” (2009). This publication will be available beginning May 1, 2009, at no charge, electronically via the IRS Internet site at http://www.irs.gov.

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(f) Effective/applicability date. This section applies on or after May 1, 2009.
(g) Expiration date. This section expires on or before May 1, 2012.

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[T.D. 9448, 74 FR 21465, May 7, 2009]
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