Prepared for: Donor name
A. Input Assumptions | |
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Date of transfer | February 4, 2023 |
Fair market value of property transferred | $1,000,000.00 |
The term income interest of the trust will last | 20 years |
Annual annuity rate | 5% |
Payment frequency | Quarterly |
Is payment at beginning or end of payment period | End |
The discount rate (effective 2/2023) is | 4.6% |
The mortality table is based on the census taken in | 2000 |
B. Calculation of Income Tax Deduction for Grantor Trust | ||
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1. | Fair market value of property transferred | $1,000,000.00 |
2. | Annual annuity rate | 5% |
3. | Annuity amount payable on an annual basis | $50,000.00 |
4. | Factor for present worth of an annuity (based on Table B) | 12.896 |
5. | Line 3 annuity amount times Line 4 factor | $644,800.00 |
6. | Adjustment factor for payment frequency (from Table K) | 1.0171 |
7. | Present value of annuity interest (Line 5 * Line 6) | $655,826.08 |
8. | Value of annuity interest (lesser of Line 1 and Line 7) | $655,826.08 |
9. | Present value of remainder interest = non deductible remainder (Line 1 - Line 8) | $344,173.92 |
10. | Percent of property that will revert to the grantor | 34.42% |
11. | Is income tax deduction allowed? (Is Line 10 > 15%) | Yes |
12. | Income tax deduction | $655,826.08 |
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