**T.D. 9448 (May 1, 2009)**

[4830-01-p]

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1, 20, and 25

[Treasury Decision 9448]

RIN 1545-BH96; RIN 1545-BI56

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final and temporary regulations.

SUMMARY: This document contains regulations relating to the use of actuarial
tables in valuing annuities, interests for life or terms of years, and remainder
or reversionary interests. These regulations will affect the valuation of inter
vivos and testamentary transfers of interests dependent on one or more measuring
lives. These regulations are necessary because section 7520(c)(3) directs the
Secretary to update the actuarial tables to reflect the most recent mortality
experience available. The text of the temporary regulations also serves as the
text of the proposed regulations set forth in the notice of proposed rulemaking
on this subject elsewhere in this issue of the **Federal Register**.

DATES: __Effective Date__: These regulations are effective on May 1, 2009.

__Applicability Date__: These regulations apply on May 1, 2009.

FOR FURTHER INFORMATION CONTACT: Mayer R. Samuels, (202) 622-3090 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

**Background**

This document contains amendments to the regulations revising certain tables used for the valuation of partial interests in property under section 7520 of the Internal Revenue Code of 1986 (Code) to reflect the most recent mortality experience available.

__In General__

Section 7520, effective for transfers for which the valuation date is after April 30, 1989, provides generally that the value of an annuity, an interest for life or a term of years, and a remainder or reversionary interest is to be determined under tables published by the Secretary by using an interest rate (rounded to the nearest two-tenths of one percent) equal to 120 percent of the Federal midterm rate in effect under section 1274(d)(1) for the month in which the valuation date falls. Section 7520(c)(3) directed the Secretary to issue tables not later than December 31, 1989, utilizing the then most recent mortality experience. Thereafter, the Secretary is directed to revise these tables not less frequently than once each 10 years to take into account the most recent mortality experience available as of the time of the revision.

These temporary regulations, REG-107845-08, incorporate revised Table S (Single Life Remainder Factors) and Table U(1) (Unitrust Single Life Remainder Factors), effective for transfers for which the valuation date is on or after May 1, 2009, based on data compiled from the 2000 census as set forth in Life Table 2000CM, and make conforming amendments to various sections to reflect the revised tables. At the same time, in the portions of these regulations that are final regulations, REG-105643-09, the current tables, effective for transfers for which the valuation date is after April 30, 1999, and before May 1, 2009, are moved to sections containing actuarial material for historical reference. Table B, Table D, Tables F(4.2) through F(14.0), Table J, and Table K, which are not based on mortality experience, are not changed. Internal Revenue Service Publications 1457 "Actuarial Valuations Version 3A" (forthcoming 2009), 1458 "Actuarial Valuations Version 3B" (forthcoming 2009), and 1459 "Actuarial Valuations Version 3C" (forthcoming 2009) will contain a complete set of actuarial tables that include factors not contained in the temporary regulations (for example, annuity and life interest factors). These publications will be available beginning May 1, 2009, at no charge, electronically via the IRS Internet site at www.irs.gov.

The following chart summarizes the applicable interest rates and the citations to textual materials and tables for the various periods covered under the current regulations:

` Cross Reference to Regulation Sections`

` Valuation Interest Regulation`

` Period Rate Section
Table`

` Section 642:`

These regulations are applicable in the case of annuities, interests for life or terms of years, and remainder or reversionary interests valued as of a date on or after May 1, 2009.

__Transitional Rules__

The regulations provide certain transitional rules intended to alleviate any adverse consequences resulting from the proposed regulatory change. For gift tax purposes, if the date of a transfer is on or after May 1, 2009, but before July 1, 2009, the donor may choose to determine the value of the gift (and/or any applicable charitable deduction) under tables based on either Life Table 90CM or Table 2000CM. Similarly, for estate tax purposes, if the decedent dies on or after May 1, 2009, but before July 1, 2009, the value of any interest (and/or any applicable charitable deduction) may be determined in the discretion of the decedent's executor under tables based on either Life Table 90CM or Table 2000CM. However, the section 7520 interest rate to be utilized is the appropriate rate for the month in which the valuation date occurs, subject to the following special rule for certain charitable transfers. Specifically, in accordance with this transitional rule and the rules contained in §§ 1.7520-2(a)(2), 20.7520-2(a)(2) and 25.7520-2(a)(2), in cases involving a charitable deduction, if the valuation date occurs on or after May 1, 2009, and before July 1, 2009, and the executor or donor elects under section 7520(a) to use the section 7520 interest rate for March 2009 or April 2009, then the mortality experience contained in 90CM must be used. If the executor or donor uses the section 7520 interest rate for May 2009 or for June 2009, then the tables based on either Table 90CM or Table 2000CM may be used. However, if the valuation date occurs after June 30, 2009, the executor or donor must use the new mortality experience contained in Table 2000CM even if the use of a prior month's interest rate is elected under section 7520(a).

In addition, for estate tax purposes, the estate of a mentally incompetent decedent may elect to value the property interest included in the gross estate either under the mortality table and interest rate in effect at the time the decedent became mentally incompetent or under the mortality table and interest rate in effect on the decedent's date of death if the decedent was under a mental incapacity that existed on May 1, 2009, and continued uninterrupted until the decedent's death, or the decedent died within 90 days after regaining competency on or after May 1, 2009.

**Special Analyses**

It has been determined that this Treasury decision is not a significant regulatory action as defined in EO 12866. Therefore, a regulatory assessment is not required. For applicability of the Regulatory Flexibility Act please refer to the cross-referenced notice of proposed rulemaking published elsewhere in this Federal Register. Pursuant to section 7805(f) of the Internal Revenue Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

**Drafting Information**

The principal author of these regulations is Mayer R. Samuels, Office of the Associate Chief Counsel (Passthroughs and Special Industries), IRS. However, other personnel from the IRS and Treasury Department participated in their development.

**List of Subjects**

__26 CFR Part 1__

Income taxes, Reporting and recordkeeping requirements.

__26 CFR Part 20__

Estate taxes, Reporting and recordkeeping requirements.

__26 CFR Part 25__

Gift taxes, Reporting and recordkeeping requirements.

**Adoption of Amendments to the Regulations**

Accordingly, 26 CFR parts 1, 20, and 25 are amended as follows:

PART 1 -- INCOME TAXES

Paragraph 1. The authority citation for part 1 is amended by adding entries in numerical order to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Section 1.170A-12T also issued under 26 U.S.C. 170(f)(4).

Section 1.642(c)-6T also issued under 26 U.S.C. 642(c)(5).

Section 1.664-4T also issued under 26 U.S.C. 664(a).

Section 1.7520-1T also issued under 26 U.S.C. 7520(c)(2).

Par. 2. Sections 1.170A-12 is amended by revising paragraphs (b)(2) and (b)(3) and adding paragraph (f) to read as follows:

__§ 1.170A-12 Valuation of a remainder interest in real property for
contributions made after July 31, 1969__.

* * * * *

(b)(2) and (b)(3) [Reserved]. For further guidance, see §§ 1.170A-12T(b)(2) and (b)(3).

* * * * *

(f) __Effective/applicability date__. This section applies to
contributions made after July 31, 1969.

Par. 3. Section 1.170A-12T is added to read as follows:

__§ 1.170A-12T Valuation of a remainder interest in real property for
contributions made after July 31, 1969 (temporary)__.

(a) through (b)(1) [Reserved]. For further guidance see § 1.170A-12(a) through (b)(1).

(b)(2) __Computation of depreciation factor__. If the valuation of the
remainder interest in depreciable property is dependent upon the continuation of
one life, a special factor must be used. The factor determined under this
paragraph (b)(2) is carried to the fifth decimal place. The special factor is to
be computed on the basis of the interest rate and life contingencies prescribed
in § 20.2031-7T (or for periods before May 1, 2009, § 20.2031-7A) and on the
assumption that the property depreciates on a straight-line basis over its
estimated useful life. For transfers for which the valuation date is on or after
May 1, 2009, special factors for determining the present value of a remainder
interest following one life and an example describing the computation are
contained in Internal Revenue Service Publication 1459, "Actuarial Valuations
Version 3C" (2009). This publication will be available beginning May 1, 2009, at
no charge, electronically via the IRS Internet site at www.irs.gov. For
transfers for which the valuation date is after April 30, 1999, and before May
1, 2009, special factors for determining the present value of a remainder
interest following one life and an example describing the computation are
contained in Internal Revenue Service Publication 1459, "Actuarial Values, Book
Gimel," (7-99). For transfers for which the valuation date is after April 30,
1989, and before May 1, 1999, special factors for determining the present value
of a remainder interest following one life and an example describing the
computation are contained in Internal Revenue Service Publication 1459,
"Actuarial Values, Gamma Volume," (8-89). These publications are no longer
available for purchase from the Superintendent of Documents, United States
Government Printing Office. However, they may be obtained by requesting a copy
from: CC:PA:LPD:PR (IRS Publication 1459), Room 5205, Internal Revenue Service,
P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. See, however, §
1.7520-3(b) (relating to exceptions to the use of prescribed tables under
certain circumstances). Otherwise, in the case of the valuation of a remainder
interest following one life, the special factor may be obtained through use of
the following formula:

Where:

n=the estimated number of years of useful life,

i=the applicable interest rate under section 7520 of the Internal Revenue Code,

v=1 divided by the sum of 1 plus the applicable interest rate under section 7520 of the Internal Revenue Code,

x=the age of the life tenant, and

lx=number of persons living at age x as set forth in Table 2000CM of § 20.2031-7T (or, for periods before May 1, 2009, the tables set forth under § 20.2031-7A).

(3) The following example illustrates the provisions of this paragraph (b):__Example__.
A, who is 62, donates to Y University a remainder interest in a personal
residence, consisting of a house and land, subject to a reserved life estate in
A. At the time of the gift, the land has a value of $30,000 and the house has a
value of $100,000 with an estimated useful life of 45 years, at the end of which
period the value of the house is expected to be $20,000. The portion of the
property considered to be depreciable is $80,000 (the value of the house
($100,000) less its expected value at the end of 45 years ($20,000)). The
portion of the property considered to be nondepreciable is $50,000 (the value of
the land at the time of the gift ($30,000) plus the expected value of the house
at the end of 45 years ($20,000)). At the time of the gift, the interest rate
prescribed under section 7520 is 8.4 percent. Based on an interest rate of 8.4
percent, the remainder factor for $1.00 prescribed in § 20.2031-7T(d) for a
person age 62 is 0.26534. The value of the nondepreciable remainder interest is
$13,267.00 (0.26534 times $50,000). The value of the depreciable remainder
interest is $15,053.60 (0.18817, computed under the formula described in
paragraph (b)(2) of this section, times $80,000). Therefore, the value of the
remainder interest is $28,320.60.

(c) through (e) [Reserved]. For further guidance see § 1.170A-12(c) through (e).

(f) __Effective/applicability date__. Paragraphs (b)(2) and (b)(3) apply
to all contributions made on or after May 1, 2009.

(g) __Expiration date__. Paragraphs (b)(2) and (b)(3) expire on or before
May 1, 2012.

Par. 4. Section 1.642(c)-6 is amended as follows:

1. Paragraph (d) is removed.

2. Paragraph (e) is redesignated as paragraph (f) of § 1.642(c)-6A.

3. New paragraphs (d) and (e) are added.

4. Paragraph (f) is revised.

The revisions and addition read as follows:

__§ 1.642(c)-6 Valuation of a remainder interest in property transferred to
a pooled income fund__.

* * * * *

(d) and (e) [Reserved]. For further guidance, see § 1.642(c)-6T(d) and (e).

(f) __Effective/applicability dates__. This section applies after April
30, 1999, and before May 1, 2009.

Par. 5. Section 1.642(c)-6T is added to read as follows:

__§ 1.642(c)-6T Valuation of a remainder interest in property transferred to
a pooled income fund (temporary)__.

(a) through (c) [Reserved]. For further guidance, see § 1.642(c)-6(a) through (c).

(d) __Valuation__. The present value of the remainder interest in property
transferred to a pooled income fund on or after May 1, 2009, is determined under
paragraph (e) of this section. The present value of the remainder interest in
property transferred to a pooled income fund for which the valuation date is
before May 1, 2009, is determined under the following sections:

` Valuation Dates`

` Applicable`

` After Before Regulations`

` -- 01-01-52 1.642(c)-6A(a)`

` 12-31-51 01-01-71 1.642(c)-6A(b)`

` 12-31-70 12-01-83 1.642(c)-6A(c)`

` 11-30-83 05-01-89 1.642(c)-6A(d)`

` 04-30-89 05-01-99 1.642(c)-6A(e)`

` 04-30-99 05/01/09 1.642(c)-6A(f)`

(e) __Present value of the remainder interest in the case of transfers to
pooled income funds for which the valuation date is on or after May 1, 2009__
-- (1) __In general__. In the case of transfers to pooled income funds for
which the valuation date is on or after May 1, 2009, the present value of a
remainder interest is determined under this section. See, however, § 1.7520-3(b)
(relating to exceptions to the use of prescribed tables under certain
circumstances). The present value of a remainder interest that is dependent on
the termination of the life of one individual is computed by the use of Table S
in paragraph (e)(6) of this section. For purposes of the computations under this
section, the age of an individual is the age at the individual's nearest
birthday.

(2) __Transitional rules for valuation of transfers to pooled income funds__.
(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 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 pooled income fund for which the valuation date is on or after May 1, 2009, and before July 1, 2009, the present value of the remainder interest under this section is determined 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)(6) of this section or § 1.642(c)-6A(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)(6) of this section or § 1.642(c)-6A(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) __Present value of a remainder interest__. The present value of a
remainder interest in property transferred to a pooled income fund is computed
on the basis of --

(i) Life contingencies determined from the values of __lx__ that are set
forth in Table 2000CM in § 20.2031-7T(d)(7) (see § 20.2031-7A for certain prior
periods); and

(ii) Discount at a rate of interest, compounded annually, equal to the highest yearly rate of return of the pooled income fund for the 3 taxable years immediately preceding its taxable year in which the transfer of property to the fund is made. For purposes of this paragraph (e), the yearly rate of return of a pooled income fund is determined as provided in § 1.642(c)-6(c) unless the highest rate of return is deemed to be the rate described in paragraph (e)(4) of this section for funds in existence less than 3 taxable years. For purposes of this paragraph (e)(3)(ii), the first taxable year of a pooled income fund is considered a taxable year even though the taxable year consists of less than 12 months. However, appropriate adjustments must be made to annualize the rate of return earned by the fund for that period. Where it appears from the facts and circumstances that the highest yearly rate of return of the fund for the 3 taxable years immediately preceding the taxable year in which the transfer of property is made has been purposely manipulated to be substantially less than the rate of return that would otherwise be reasonably anticipated with the purpose of obtaining an excessive charitable deduction, that rate of return may not be used. In that case, the highest yearly rate of return of the fund is determined by treating the fund as a pooled income fund that has been in existence for less than 3 preceding taxable years.

(4) __Pooled income funds in existence less than 3 taxable years__. If a
pooled income fund has been in existence less than 3 taxable years immediately
preceding the taxable year in which the transfer is made to the fund and the
transfer to the fund is made after April 30, 1989, the highest rate of return is
deemed to be the interest rate (rounded to the nearest two-tenths of one
percent) that is 1 percent less than the highest annual average of the monthly
section 7520 rates for the 3 calendar years immediately preceding the calendar
year in which the transfer to the pooled income fund is made. The deemed rate of
return for transfers to new pooled income funds is recomputed each calendar year
using the monthly section 7520 rates for the 3-year period immediately preceding
the calendar year in which each transfer to the fund is made until the fund has
been in existence for 3 taxable years and can compute its highest rate of return
for the 3 taxable years immediately preceding the taxable year in which the
transfer of property to the fund is made in accordance with the rules set forth
in the first sentence of paragraph (e)(3)(ii) of this section.

(5) __Computation of value of remainder interest__. (i) The factor that is
used in determining the present value of a remainder interest that is dependent
on the termination of the life of one individual is the factor from Table S in
paragraph (e)(6) of this section under the appropriate yearly rate of return
opposite the number that corresponds to the age of the individual upon whose
life the value of the remainder interest is based (See § 1.642(c)-6A for certain
prior periods). The tables in paragraph (e)(6) of this section include factors
for yearly rates of return from 0.2 to 14 percent. Many actuarial factors not
contained in the tables in paragraph (e)(6) of this section are contained in
Table S in Internal Revenue Service Publication 1457, "Actuarial Valuations
Version 3A" (2009). This publication will be available beginning May 1, 2009, at
no charge, electronically via the IRS Internet site at www.irs.gov. For other
situations, see § 1.642(c)-6(b). If the yearly rate of return is a percentage
that is between the yearly rates of return for which factors are provided, a
linear interpolation must be made. The present value of the remainder interest
is determined by multiplying the fair market value of the property on the
valuation date by the appropriate remainder factor.

(ii) This paragraph (e)(5) may be illustrated by the following example:

__Example__. A, who is 54 years and 8 months, transfers $100,000 to a
pooled income fund, and retains a life income interest in the property. The
highest yearly rate of return earned by the fund for its 3 preceding taxable
years is 9.47 percent. In Table S, the remainder factor opposite 55 years under
9.4 percent is .16192 and under 9.6 percent is .15755. The present value of the
remainder interest is $16,039.00, computed as follows:

` Factor at 9.4 percent for age 55 .16192`

` Factor at 9.6 percent for age 55 .15755`

` Difference .00437`

` Interpolation adjustment:`

` 9.47% - 9.4% = x`

` ______________ ________`

` 0.2% .00437`

` x = .00153`

` Factor at 9.4 percent for age 55 .16192`

` Less: Interpolation adjustment .00153`

` Interpolated factor .16039`

` Present value of remainder interest:`

` ($100,000 X .16039) $16,039.00`

(6) __Actuarial tables__. In the case of transfers for which the valuation
date is on or after May 1, 2009, the present value of a remainder interest
dependent on the termination of one life in the case of a transfer to a pooled
income fund is determined by use of the following Table S:

`
Table S`

(f)

(g) __Expiration date__. This section expires on or before May 1, 2012.

Par. 6. The undesignated center heading immediately preceding § 1.642(c)-6A is revised to read as follows:

Pooled Income Fund Actuarial Tables

Applicable Before May 1, 2009

Par. 7. Section 1.642(c)-6A is amended by:

1. Revising the section heading.

2. Amending newly-designated paragraph (f) as follows:

a. Paragraph (f) heading is revised.

b. Paragraphs (f)(1), (f)(2), (f)(3), (f)(4), and (f)(5) are revised.

c. The introductory text in paragraph (f)(6) and the heading preceding Table S is are revised.

d. Paragraph (f)(7) is added.

The revisions and addition read as follows:

__§ 1.642(c)-6A Valuation of charitable remainder interests for which the
valuation date is before May 1, 2009.__

* * * * *

(f) __Present value of the remainder interest in the case of transfers to
pooled income funds for which the valuation date is after April 30, 1999, and
before May 1, 2009__ -- (1) __In general__. In the case of transfers to
pooled income funds for which the valuation date is after April 30, 1999, and
before May 1, 2009, the present value of a remainder interest is determined
under this section. See, however, § 1.7520-3(b) (relating to exceptions to the
use of prescribed tables under certain circumstances). The present value of a
remainder interest that is dependent on the termination of the life of one
individual is computed by the use of Table S in paragraph (f)(6) of this
section. For purposes of the computations under this section, the age of an
individual is the age at the individual's nearest birthday.

(2) __Transitional rules for valuation of transfers to pooled income funds__.
(i) For purposes of sections 2055, 2106, or 2624, if on May 1, 1999, the
decedent was mentally incompetent so that the disposition of the property could
not be changed, and the decedent died after April 30, 1999, 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 after
April 30, 1999, the present value of a remainder interest is determined as if
the valuation date with respect to the decedent's gross estate is either before
May 1, 1999, or after April 30, 1999, 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 pooled income fund for which the valuation date is after April 30, 1999, and before July 1, 1999, the present value of the remainder interest under this section is determined 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)(5) or (f)(6) of this section, at the option of the donor or the decedent's executor, as the case may be.

(iii) For purposes of paragraphs (f)(2)(i) and (f)(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)(5) or (f)(6) of this section, 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) __Present value of a remainder interest__. The present value of a
remainder interest in property transferred to a pooled income fund is computed
on the basis of --

(i) Life contingencies determined from the values of __lx__ that are set
forth in Table 90CM in § 20.2031-7A(f)(4); and

(ii) Discount at a rate of interest, compounded annually, equal to the highest yearly rate of return of the pooled income fund for the 3 taxable years immediately preceding its taxable year in which the transfer of property to the fund is made. The provisions of § 1.642(c)-6(c) apply for determining the yearly rate of return. However, where the taxable year is less than 12 months, the provisions of § 1.642(c)-6T(e)(3)(ii) apply for the determining the yearly rate of return.

(4) __Pooled income funds in existence less than 3 taxable years__. The
provisions of § 1.642(c)-6T(e)(4) apply for determining the highest yearly rate
of return when the pooled income fund has been in existence less than three
taxable years.

(5) __Computation of value of remainder interest__. The factor that is
used in determining the present value of a remainder interest that is dependent
on the termination of the life of one individual is the factor from Table S in
paragraph (f)(6) of this section under the appropriate yearly rate of return
opposite the number that corresponds to the age of the individual upon whose
life the value of the remainder interest is based. Table S in paragraph (f)(6)
of this section includes factors for yearly rates of return from 4.2 to 14
percent. Many actuarial factors not contained in Table S in paragraph (f)(6) of
this section are contained in Table S in Internal Revenue Service Publication
1457, "Actuarial Values, Book Aleph," (7-99). Publication 1457 is no longer
available for purchase from the Superintendent of Documents, United States
Government Printing Office. However, pertinent factors in this publication may
be obtained by a written request to: CC:PA:LPD:PR (IRS Publication 1457), Room
5205, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington,
DC 20044. For other situations, see § 1.642(c)-6(b). If the yearly rate of
return is a percentage that is between the yearly rates of return for which
factors are provided, a linear interpolation must be made. The present value of
the remainder interest is determined by multiplying the fair market value of the
property on the valuation date by the appropriate remainder factor. For an
example of a computation of the present value of a remainder interest requiring
a linear interpolation adjustment, see § 1.642(c)-6T(e)(5).

(6) __Actuarial tables__. In the case of transfers for which the valuation
date is after April 30, 1999, and before May 1, 2009, the present value of a
remainder interest dependent on the termination of one life in the case of a
transfer to a pooled income fund is determined by use of the following tables:

TABLE S. -- BASED ON LIFE TABLE 90CM SINGLE LIFE REMAINDER FACTORS

[Applicable After April 30, 1999, and Before May 1, 2009]

* * * * *

(7) __Effective/applicability dates__. Paragraphs (f)(1) through (f)(6)
apply after April 30, 1999, and before May 1, 2009.

Par. 8. Section 1.664-2 is amended by revising paragraph (c) and adding paragraph (e) to read as follows:

__§ 1.664-2 Charitable remainder annuity trust__.

* * * * *

(c) __Calculation of the fair market value of the remainder interest of a
charitable remainder annuity trust__. For purposes of sections 170, 2055,
2106, and 2522, the fair market value of the remainder interest of a charitable
remainder annuity trust (as described in this section) is the net fair market
value (as of the appropriate valuation date) of the property placed in trust
less the present value of the annuity. For purposes of this section, valuation
date means, in general, the date on which the property is transferred to the
trust by the donor regardless of when the trust is created. In the case of
transfers to a charitable remainder annuity trust for which the valuation date
is after April 30, 1999, if an election is made under section 7520 and §
1.7520-2(b) to compute the present value of the charitable interest by use of
the interest rate component for either of the 2 months preceding the month in
which the transfer is made, the month so elected is the valuation date for
purposes of determining the interest rate and mortality tables. For purposes of
section 2055 or 2106, the valuation date is the date of death unless the
alternate valuation date is elected in accordance with section 2032 in which
event, and within the limitations set forth in section 2032 and the regulations
thereunder, the valuation date is the alternate valuation date. If the
decedent's estate elects the alternate valuation date under section 2032 and
also elects, under section 7520 and § 1.7520-2(b), to use the interest rate
component for one of the 2 months preceding the alternate valuation date, the
month so elected is the valuation date for purposes of determining the interest
rate and mortality tables. The present value of an annuity is computed under §
20.2031-7T(d) for transfers for which the valuation date is on or after May 1,
2009, or under § 20.2031-7A(a) through (f), whichever is applicable, for
transfers for which the valuation date is before May 1, 2009. See, however, §
1.7520-3(b) (relating to exceptions to the use of prescribed tables under
certain circumstances).

* * * * *

(e) __Effective/applicability date__. Paragraph (c)(1) applies after April
30, 1989.

Par. 9. Section 1.664-4 is amended as follows:

1. Paragraph (a)(1) is revised.

2. Paragraph (d) is removed.

3. The heading for paragraph (e) is redesignated as the heading for § 1.664-4A(f).

4. Paragraphs (e)(1), (e)(2), (e)(5), and (e)(7) are redesignated as § 1.664-4A(f)(1), (f)(2), (f)(5) and (f)(6), respectively.

5. New paragraphs (d), (e)(1), (e)(2), and (e)(5) are added.

6. The heading and introductory text of paragraph (e)(6), preceding Table D, is revised.

7. New paragraph (e)(7) is added.

8. Paragraph (f) is revised.

The additions and revision read as follows:

__§ 1.664-4 Calculation of the fair market value of the remainder interest
in a charitable remainder unitrust__.

(a) * * *

(1) [Reserved]. For further guidance, see § 1.664-4T(a)(1).

* * * * *

(d) through (e)(2) [Reserved]. For further guidance, see § 1.664-4T(d) through (e)(2).

* * * * *

(5) [Reserved]. For further guidance, see § 1.664-4T(e)(5).

(6) __Actuarial Table D and F (4.2 through 14.0) for transfers for which the
valuation date is after April 30, 1989__. For transfers for which the
valuation date is after April 30, 1989, the present value of a charitable
remainder unitrust interest that is dependent upon a term of years is determined
by using the section 7520 rate and the tables in this paragraph (e)(6). For
transfers for which the valuation date is on or after May 1, 2009, where the
present value of a charitable remainder unitrust interest is dependent on the
termination of a life interest , see § 1.664-4T(e)(5). 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 www.irs.gov.

* * * * *

(7) [Reserved]. For further guidance, see § 1.664-4T(e)(7).

(f) __Effective/applicability dates__. This section applies after April
30, 1999, and before May 1, 2009.

Par. 10. Section 1.664-4T is added to read as follows:

__§ 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`

` After Before Regulations`

` -- 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:

__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% X .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:`

` 7.627% - 7.6% = x`

` _____________ _______`

` 0.2% .00488`

` x = .00066`

` Factor at 7.6 percent at age 45 .11141`

` Less: Interpolation adjustment .00066`

` Interpolated Factor .11075`

` Present value of remainder interest:`

` ($100,000 X .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 www.irs.gov.

` Table U(1) --
Unitrust Single Life Remainder Factors`

(f)

(g) __Expiration date__. This section expires on or before May 1, 2012.

Par. 11. The undesignated center heading immediately preceding § 1.664-4A is revised to read as follows:

Unitrust Actuarial Tables Applicable Before May 1, 2009

Par. 12. Section 1.664-4A is amended as follows:

1. The section heading is revised.

2. The heading of newly-designated paragraph (f) is revised.

3. Newly-designated paragraphs (f)(1) and (f)(2) are revised.

4. New paragraphs (f)(3) and (f)(4) are added.

5. Newly-designated paragraph (f)(5) is revised.

6. In newly-designated paragraph (f)(6), the heading and the first paragraph are revised.

7. The heading of Table U(1) is revised.

8. Paragraph (f)(7) is added.

The additions and revisions read as follows:

§ __1.664-4A Valuation of charitable remainder interests for which the
valuation date is before May 1, 2009__.

* * * * *

(f) __Valuation of charitable remainder unitrusts having certain payout
sequences for transfers for which the valuation date is after April 30, 1999,
and before May 1, 2009__ -- (1) __In general__. Except as otherwise
provided in paragraph (f)(2) of this section, in the case of transfers for which
the valuation date is after April 30, 1999, and before May 1, 2009, the present
value of a remainder interest is determined under paragraphs (f)(3) through
(f)(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. 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, 1999, the
decedent was mentally incompetent so that the disposition of the property could
not be changed, and the decedent died after April 30, 1999, 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 after
April 30, 1999, 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 May 1, 1999, or after April 30, 1999, 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 after April 30, 1999, and before July 1, 1999, 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)(6) or (f)(6) of this section, at the option of the donor or the decedent's executor, as the case may be. (iii) For purposes of paragraphs (f)(2)(i) and (f)(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)(6) or (f)(6) of this section, 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) __Adjusted payout rate__. For transfers for which the valuation date
is after April 30, 1999, and before May 1, 2009, the adjusted payout rate is
determined by using the appropriate Table F, contained in § 1.664-4(e)(6), for
the section 7520 interest rate applicable to the transfer. If the interest rate
is between 4.2 and 14 percent, see § 1.664-4(e)(6). If the interest rate is
below 4.2 percent or greater than 14 percent, see § 1.664-4(b). See § 1.664-4(e)
for rules applicable in determining the adjusted payout rate.

(4) __Period is a term of years__. If the period described in §
1.664-3(a)(5) is a term of years, the factor that is used in determining the
present value of the remainder interest for transfers for which the valuation
date is after April 30, 1999, and before May 1, 2009, is the factor under the
appropriate adjusted payout rate in Table D in § 1.664-4(e)(6) corresponding to
the number of years in the term. If the adjusted payout rate is an amount that
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. Generally, for purposes of this section, the valuation date is,
in the case of an inter vivos transfer, the date on which the property is
transferred to the trust by the donor, and, in the case of a testamentary
transfer under sections 2055, 2106, or 2624, the valuation date is the date of
death. See § 1.664-4(e)(4) for additional rules regarding the valuation date.
See § 1.664-4(e)(4) for an example that illustrates the application of this
paragraph (f)(4).

(5) __Period is the life of one individual__. 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 after April 30, 1999, and before May 1, 2009, is the
factor in Table U(1) in paragraph (f)(6) of this section under the appropriate
adjusted payout. For purposes of the computations described in this paragraph
(f)(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 rules provided in §
1.664-4T(e)(5) apply for determining the present value of the remainder
interest. See § 1.664-4T(e)(5) for an example illustrating the application of
this paragraph (f)(5) (using current actuarial tables).

(6) __Actuarial Table U(1) for transfers for which the valuation date is
after April 30, 1999, and before May 1, 2009__. For transfers for which the
valuation date is after April 30, 1999, and before 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 (f)(6), and Tables F(4.2) through F(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 Values, Book Beth," (7-1999). Publication 1458 is
no longer available for purchase from the Superintendent of Documents, United
States Government Printing Office. However, pertinent factors in this
publication may be obtained by a written request to: CC:PA:LPD:PR (IRS
Publication 1458), Room 5205, Internal Revenue Service, P.O.Box 7604, Ben
Franklin Station, Washington, DC 20044.

TABLE U(1). -- BASED ON LIFE TABLE 90CM UNITRUST SINGLE LIFE

REMAINDER FACTORS

[Applicable After April 30, 1999, and Before May 1, 2009]

* * * * *

(7) __Effective/applicability dates__. Paragraphs (f)(1) through (f)(6)
apply after April 30, 1999, and before May 1, 2009.

Par. 13. Section 1.7520-1 is amended by:

1. Revising the section heading.

2. Revising paragraphs (a)(1) and (a)(2).

3. Removing the last two sentences of paragraph (b)(2) and adding a new sentence at the end of the paragraph.

4. Revising paragraph (c)(1).

5. Revising the heading and introductory text of paragraph (c)(2).

6. Revising paragraph (d).

The revisions and additions read as follows:

§ __1.7520-1 Valuation of annuities, unitrust interests, interests for life
or terms of years, and remainder or reversionary interests prior to May 1, 2009__.

(a) __General actuarial valuations__. (1) Except as otherwise provided in
this section and in § 1.7520-3 (relating to exceptions to the use of prescribed
tables under certain circumstances), in the case of certain transactions after
April 30, 1989, subject to income tax, the fair market value of annuities,
interests for life or for a term of years (including unitrust interests),
remainders, and reversions is their present value determined under this section.
For periods prior to May 1, 2009, see § 20.2031-7A for the computation of the
value of annuities, unitrust interests, life estates, terms for years,
remainders, and reversions, other than interests described in paragraphs (a)(2)
and (a)(3) of this section.

(2) For a transfer to a pooled income fund prior to May 1, 2009, see § 1.642(c)-6A with respect to the valuation of the remainder interest.

* * * * *

(b) * * *

(2) * * * For transactions with valuation dates after April 30, 1989, and before May 1, 2009, the mortality component tables are contained in § 20.2031-7A.

(c) * * *

(1) [Reserved]. For further guidance, see § 1.7520-1T(c)(1).

(2) __Internal Revenue Service publications containing tables with interest
rates between 2.2 and 22 percent for valuation dates after April 30, 1999, and
before May 1, 2009__. The following publications are no longer available for
purchase from the Superintendent of Documents, United States Government Printing
Office; however, they may be obtained from CC:PA:LPD:PR, Room 5205, Internal
Revenue Service, P.O.Box 7604, Ben Franklin Station, Washington, DC 20044:

* * * * *

(d) __Effective/applicability dates__. This section applies after April
30, 1989, and before May 1, 2009.

Par. 14. Section 1.7520-1T is added to read as follows:

§ __1.7520-1T Valuation of annuities, unitrust interests, interests for life
or terms of years, and remainder or reversionary interests on or after May 1,
2009 (temporary)__.

(a) __General actuarial valuations__. (1) Except as otherwise provided in
this section and in § 1.7520-3 (relating to exceptions to the use of prescribed
tables under certain circumstances), in the case of certain transactions after
April 30, 1989, subject to income tax, the fair market value of annuities,
interests for life or for a term of years (including unitrust interests),
remainders, and reversions is their present value determined under this section.
See § 20.2031-7T(d) (and, for certain prior periods, § 20.2031-7A) for the
computation of the value of annuities, unitrust interests, life estates, terms
for years, remainders, and reversions, other than interests described in
paragraphs (a)(2) and (a)(3) of this section.

(2) For a transfer to a pooled income fund on or after May 1, 2009, see § 1.642(c)-6T(e) (or, for certain prior periods, § 1.642(c)-6A) with respect to the valuation of the remainder interest.

(3) [Reserved]. For further guidance, see § 1.7520-1(a)(3).

(b)(1) [Reserved]. For further guidance, see § 1.7520-1(b)(1).

(2) __Mortality component__. The mortality component reflects the
mortality data most recently available from the United States census. As new
mortality data becomes available after each decennial census, the mortality
component described in this section will be revised periodically and the revised
mortality component tables will be published in the regulations at that time.
For transactions with valuation dates on or after May 1, 2009, the mortality
component table (Table 2000CM) is contained in § 20.2031-7T(d)(7). See §
20.2031-7A for mortality component tables applicable to transactions for which
the valuation date falls before May 1, 2009.

(c) [Reserved]. For further guidance, see § 1.7520-1(c).

(1) __Regulation sections containing tables with interest rates between 0.2
and 14 percent for valuation dates on or after May 1, 2009__. Section
1.642(c)-6T(e)(6) contains Table S used for determining the present value of a
single life remainder interest in a pooled income fund as defined in §
1.642(c)-5. See § 1.642(c)-6A for actuarial factors for one life applicable to
valuation dates before May 1, 2009. Section 1.664-4(e)(6) contains Table F
(payout factors) and Table D (actuarial factors used in determining the present
value of a remainder interest postponed for a term of years). Section
1.664-4T(e)(7) contains Table U(1) (unitrust single life remainder factors).
These tables are used in determining the present value of a remainder interest
in a charitable remainder unitrust as defined in § 1.664-3. See § 1.664-4A for
unitrust single life remainder factors applicable to valuation dates before May
1, 2009. Section 20.2031-7(d)(6) contains Table B (actuarial factors used in
determining the present value of an interest for a term of years), Table K
(annuity end-of-interval adjustment factors), and Table J (term certain annuity
beginning-of-interval adjustment factors). Section 20.2031-7T(d)(7) contains
Table S (single life remainder factors), and Table 2000CM (mortality
components). These tables are used in determining the present value of
annuities, life estates, remainders, and reversions. See § 20.2031-7A for single
life remainder factors for one life and mortality components applicable to
valuation dates before May 1, 2009.

(2) __Internal Revenue Service publications containing tables with interest
rates between 0.2 and 22 percent for valuation dates on or after May 1, 2009__.
The following documents are available beginning May 1, 2009, at no charge,
electronically via the IRS Internet site at www.irs.gov:

(i) Internal Revenue Service Publication 1457, "Actuarial Valuations Version 3A" (2009). This publication includes tables of valuation factors, as well as examples that show how to compute other valuation factors, for determining the present value of annuities, life estates, terms of years, remainders, and reversions, measured by one or two lives. These factors may also be used in the valuation of interests in a charitable remainder annuity trust as defined in § 1.664-2 and a pooled income fund as defined in § 1.642(c)-5.

(ii) Internal Revenue Service Publication 1458, "Actuarial Valuations Version 3B" (2009). This publication includes term certain tables and tables of one and two life valuation factors for determining the present value of remainder interests in a charitable remainder unitrust as defined in § 1.664-3.

(iii) Internal Revenue Service Publication 1459, "Actuarial Valuations Version 3C" (2009). This publication includes tables for computing depreciation adjustment factors. See § 1.170A-12T.

(d) __Effective/applicability date__. This section applies on or after May
1, 2009.

(e) __Expiration date__. This section expires on or before May 1, 2012.

PART 20 -- ESTATE TAX; ESTATES OF DECEDENTS DYING AFTER AUGUST 16, 1954

Par. 15. The authority citation for part 20 is amended by adding entries in numerical order to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Section 20.2031-7T also issued under 26 U.S.C. 7520(c)(2).

Section 20.7520-1T also issued under 26 U.S.C. 7520(c)(2). * * *

Par. 16. Section 20.2031-0 is revised to read as follows:

§ __20.2031-0 Table of contents__.

This section lists the section headings and undesignated center headings that appear in the regulations under section 2031.

§ 20.2031-1 Definition of gross estate; valuation of property.

§ 20.2031-2 Valuation of stocks and bonds.

§ 20.2031-3 Valuation of interests in businesses.

§ 20.2031-4 Valuation of notes.

§ 20.2031-5 Valuation of cash on hand or on deposit.

§ 20.2031-6 Valuation of household and personal effects.

§ 20.2031-7 Valuation of annuities, interests for life or term of years, and remainder or reversionary interests.

§ 20.2031-7T Valuation of annuities, interests for life or term of years, and remainder or reversionary interests (temporary).

§ 20.2031-8 Valuation of certain life insurance and annuity contracts; valuation of shares in an open-end investment company.

§ 20.2031-9 Valuation of other property.

Actuarial Tables Applicable Before May 1, 2009.

§ 20.2031-7A Valuation of annuities, interests for life or term of years, and remainder or reversionary interests for estates of decedents for which the valuation date of the gross estate is before May 1, 2009.

Par. 17. Section 20.2031-7 is amended as follows:

1. Revising paragraphs (c), (d)(1), (d)(2), (d)(3), (d)(4), (d)(5), and (e).

2. Redesignating paragraph (d)(7) as paragraph (f)(4) of § 20.2031-7A.

3. Adding new paragraph (d)(7).

The revisions and additions read as follows:

__§ 20.2031-7 Valuation of annuities, interests for life or term of years,
and remainder or reversionary interests__.

* * * * *

(c) through (d)(5) [Reserved]. For further guidance, see § 20.2031-7T(c) through (d)(5).

* * * * *

(7) [Reserved]. For further guidance, see § 20.2031-7T(d)(7).

(e) __Effective/applicability dates__. This section applies after April
30, 1999, and before May 1, 2009.

Par. 18. Section 20.2031-7T is added to read as follows:

__§ 20.2031-7T Valuation of annuities, interests for life or term of years,
and remainder or reversionary interests (temporary)__.

(a) through (b) [Reserved]. For further information see § 20.2031-7(a) through (b).

(c) __Actuarial valuations__. The present value of annuities, life
estates, terms of years, remainders, and reversions for estates of decedents for
which the valuation date of the gross estate is on or after May 1, 2009, is
determined under paragraph (d) of this section. The present value of annuities,
life estates, terms of years, remainders, and reversions for estates of
decedents for which the valuation date of the gross estate is before May 1,
2009, is determined under the following sections:

` Valuation Date`

` Applicable`

` After Before Regulations`

` -- 01-01-52 20.2031-7A(a)`

` 12-31-51 01-01-71 20.2031-7A(b)`

` 12-31-70 12-01-83 20.2031-7A(c)`

` 11-30-83 05-01-89 20.2031-7A(d)`

` 04-30-89 05-01-99 20.2031-7A(e)`

` 04-30-99 05-01-09 20.2031-7A(f)`

(d) __Actuarial valuations on or after May 1, 2009__ -- (1) __In general__.
Except as otherwise provided in paragraph (b) of this section and § 20.7520-3(b)
(pertaining to certain limitations on the use of prescribed tables), if the
valuation date for the gross estate of the decedent is on or after May 1, 2009,
the fair market value of annuities, life estates, terms of years, remainders,
and reversionary interests is the present value determined by use of standard or
special section 7520 actuarial factors. These factors are derived by using the
appropriate section 7520 interest rate and, if applicable, the mortality
component for the valuation date of the interest that is being valued. For
purposes of the computations described in this section, the age of an individual
is the age of that individual at the individual's nearest birthday. See §§
20.7520-1 through 20.7520-4.

(2) __Specific interests__ -- (i) __Charitable remainder trusts__. The
fair market value of a remainder interest in a pooled income fund, as defined in
§ 1.642(c)-5, is its value determined under § 1.642(c)-6T(e). The fair market
value of a remainder interest in a charitable remainder annuity trust, as
defined in § 1.664-2(a), is the present value determined under § 1.664-2(c). The
fair market value of a remainder interest in a charitable remainder unitrust, as
defined in § 1.664-3, is its present value determined under § 1.664-4T(e). The
fair market value of a life interest or term of years in a charitable remainder
unitrust is the fair market value of the property as of the date of valuation
less the fair market value of the remainder interest on that date determined
under § 1.664-4T(e)(4) and (5).

(ii) __Ordinary remainder and reversionary interests__. If the interest to
be valued is to take effect after a definite number of years or after the death
of one individual, the present value of the interest is computed by multiplying
the value of the property by the appropriate remainder interest actuarial factor
(that corresponds to the applicable section 7520 interest rate and remainder
interest period) in Table B (for a term certain) or the appropriate Table S (for
one measuring life), as the case may be. Table B is contained in §
20.2031-7(d)(6) and Table S (for one measuring life when the valuation date is
on or after May 1, 2009) is contained in paragraph (d)(7) of this section and in
Internal Revenue Service Publication 1457. See § 20.2031-7A containing Table S
for valuation of interests before May 1, 2009. For information about obtaining
actuarial factors for other types of remainder interests, see paragraph (d)(4)
of this section.

(iii) __Ordinary term-of-years and life interests__. If the interest to be
valued is the right of a person to receive the income of certain property, or to
use certain non-income-producing property, for a term of years or for the life
of one individual, the present value of the interest is computed by multiplying
the value of the property by the appropriate term-of-years or life interest
actuarial factor (that corresponds to the applicable section 7520 interest rate
and term-of-years or life interest period). Internal Revenue Service Publication
1457 includes actuarial factors for a remainder interest after a term of years
in Table B and after the life of one individual in Table S (for one measuring
life when the valuation date is on or after May 1, 2009). However, term-of-years
and life interest actuarial factors are not included in Table B in §
20.2031-7(d)(6) or Table S in paragraph (d)(7) of this section (or in §
20.2031-7A). If Internal Revenue Service Publication 1457 (or any other reliable
source of term-of-years and life interest actuarial factors) is not conveniently
available, an actuarial factor for the interest may be derived mathematically.
This actuarial factor may be derived by subtracting the correlative remainder
factor (that corresponds to the applicable section 7520 interest rate and the
term of years or the life) in Table B (for a term of years) in § 20.2031-7(d)(6)
or in Table S (for the life of one individual) in paragraph (d)(7) of this
section, as the case may be, from 1.000000. For information about obtaining
actuarial factors for other types of term-of-years and life interests, see
paragraph (d)(4) of this section.

(iv) __Annuities__. (A) If the interest to be valued is the right of a
person to receive an annuity that is payable at the end of each year for a term
of years or for the life of one individual, the present value of the interest is
computed by multiplying the aggregate amount payable annually by the appropriate
annuity actuarial factor (that corresponds to the applicable section 7520
interest rate and annuity period). Internal Revenue Publication 1457 includes
actuarial factors for a remainder interest in Table B (after an annuity payable
for a term of years) and in Table S (after an annuity payable for the life of
one individual when the valuation date is on or after May 1, 2009). However,
annuity actuarial factors are not included in Table B in § 20.2031-7(d)(6) or
Table S in paragraph (d)(7) of this section (or in § 20.2031-7A). If Internal
Revenue Service Publication 1457 (or any other reliable source of annuity
actuarial factors) is not conveniently available, a required annuity factor for
a term of years or for one life may be mathematically derived. This annuity
factor may be derived by subtracting the applicable remainder factor (that
corresponds to the applicable section 7520 interest rate and annuity period) in
Table B (in the case of a term-of-years annuity) in § 20.2031-7(d)(6) or in
Table S (in the case of a one-life annuity when the valuation date is on or
after May 1, 2009) in paragraph (d)(7) of this section, as the case may be, from
1.000000 and then dividing the result by the applicable section 7520 interest
rate expressed as a decimal number.

(B) If the annuity is payable at the end of semiannual, quarterly, monthly, or weekly periods, the product obtained by multiplying the annuity factor by the aggregate amount payable annually is then multiplied by the applicable adjustment factor as contained in Table K in § 20.2031-7(d)(6) for payments made at the end of the specified periods. The provisions of this paragraph (d)(2)(iv)(B) are illustrated by the following example:

__Example__. At the time of the decedent's death, the survivor/annuitant,
age 72, is entitled to receive an annuity of $15,000 a year for life payable in
equal monthly installments at the end of each period. The section 7520 rate for
the month in which the decedent died is 5.6 percent. Under Table S in paragraph
(d)(7) of this section, the remainder factor at 5.6 percent for an individual
aged 72 is .53243. By converting the remainder factor to an annuity factor, as
described above, the annuity factor at 5.6 percent for an individual aged 72 is
8.3495 (1.00000 minus .53243, divided by .056). Under Table K in §
20.2031-7(d)(6), the adjustment factor under the column for payments made at the
end of each monthly period at the rate of 5.6 percent is 1.0254. The aggregate
annual amount, $15,000, is multiplied by the factor 8.3495 and the product
multiplied by 1.0254. The present value of the annuity at the date of the
decedent's death is, therefore, $128,423.66 ($15,000 x 8.3495 x 1.0254).

(C) If an annuity is payable at the beginning of annual, semiannual, quarterly, monthly, or weekly periods for a term of years, the value of the annuity is computed by multiplying the aggregate amount payable annually by the annuity factor described in paragraph (d)(2)(iv)(A) of this section; and the product so obtained is then multiplied by the adjustment factor in Table J in § 20.2031-7(d)(6) at the appropriate interest rate component for payments made at the beginning of specified periods. If an annuity is payable at the beginning of annual, semiannual, quarterly, monthly, or weekly periods for one or more lives, the value of the annuity is the sum of the first payment plus the present value of a similar annuity, the first payment of which is not to be made until the end of the payment period, determined as provided in this paragraph (d)(2)(iv).

(v) __Annuity and unitrust interests for a term of years or until the prior
death of an individual__. See § 25.2512-5T(d)(2)(v) for examples explaining
how to compute the present value of an annuity or unitrust interest that is
payable until the earlier of the lapse of a specific number of years or the
death of an individual.

(3) __Transitional rule__. (i) If a decedent dies on or after May 1, 2009,
and if on May 1, 2009, the decedent was mentally incompetent so that the
disposition of the decedent's property could not be changed, and the decedent
dies without having regained competency to dispose of the decedent's property or
dies within 90 days of the date on which the decedent first regains competency,
the fair market value of annuities, life estates, terms for years, remainders,
and reversions included in the gross estate of the decedent is their present
value determined either under this section or under the corresponding section
applicable at the time the decedent became mentally incompetent, at the option
of the decedent's executor. For examples, see § 20.2031-7A(d).

(ii) If a decedent dies on or after May 1, 2009, and before July 1, 2009, the fair market value of annuities, life estates, remainders, and reversions based on one or more measuring lives included in the gross estate of the decedent is their present value determined under this section by use of the section 7520 interest rate for the month in which the valuation date occurs (see §§ 20.7520-1(b) and 20.7520-2(a)(2)) and the appropriate actuarial tables under either paragraph (d)(7) of this section or § 20.2031-7A(f)(4), at the option of the decedent's executor.

(iii) For purposes of paragraphs (d)(3)(i) and (d)(3)(ii) of this section, where the decedent's executor is given the option to use the appropriate actuarial tables under either paragraph (d)(7) of this section or § 20.2031-7A(f)(4), the 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).

(4) __Publications and actuarial computations by the Internal Revenue
Service__. Many standard actuarial factors not included in § 20.2031-7(d)(6)
or in paragraph (d)(7) of this section are included in Internal Revenue Service
Publication 1457, "Actuarial Valuations Version 3A" (2009). Publication 1457
also includes examples that illustrate how to compute many special factors for
more unusual situations. This publication will be available beginning May 1,
2009, at no charge, electronically via the Internal Revenue Service Internet
site at www.irs.gov. If a special factor is required in the case of an actual
decedent, the Internal Revenue Service may furnish the factor to the executor
upon a request for a ruling. The request for a ruling must be accompanied by a
recitation of the facts including a statement of the date of birth for each
measuring life, the date of the decedent's death, any other applicable dates,
and a copy of the will, trust, or other relevant documents. A request for a
ruling must comply with the instructions for requesting a ruling published
periodically in the Internal Revenue Bulletin (see §§ 601.201 and 601.601(d)(2)(ii)(__b__))
and include payment of the required user fee.

(5) __Examples__. The provisions of this section are illustrated by the
following examples:

__Example 1__. __Remainder payable at an individual's death__. The
decedent, or the decedent's estate, was entitled to receive certain property
worth $50,000 upon the death of A, to whom the income was bequeathed for life.
At the time of the decedent's death, A was 47 years and 5 months old. In the
month in which the decedent died, the section 7520 rate was 6.2 percent. Under
Table S in paragraph (d)(7) of this section, the remainder factor at 6.2 percent
for determining the present value of the remainder interest due at the death of
a person aged 47, the number of years nearest A's actual age at the decedent's
death, is .18672. The present value of the remainder interest at the date of the
decedent's death is, therefore, $9,336.00 ($50,000 X .18672).

__Example 2. Income payable for an individual's life__. A's parent
bequeathed an income interest in property to A for life, with the remainder
interest passing to B at A's death. At the time of the parent's death, the value
of the property was $50,000 and A was 30 years and 10 months old. The section
7520 rate at the time of the parent's death was 6.2 percent. Under Table S in
paragraph (d)(7) of this section, the remainder factor at 6.2 percent for
determining the present value of the remainder interest due at the death of a
person aged 31, the number of years closest to A's age at the decedent's death,
is .08697. Converting this remainder factor to an income factor, as described in
paragraph (d)(2)(iii) of this section, the factor for determining the present
value of an income interest for the life of a person aged 31 is .91303. The
present value of A's interest at the time of the parent's death is, therefore,
$45,651.50 ($50,000 X .91303).

__Example 3. Annuity payable for an individual's life__. A purchased an
annuity for the benefit of both A and B. Under the terms of the annuity
contract, at A's death, a survivor annuity of $10,000 per year payable in equal
semiannual installments made at the end of each interval is payable to B for
life. At A's death, B was 45 years and 7 months old. Also, at A's death, the
section 7520 rate was 4.8 percent. Under Table S in paragraph (d)(7) of this
section, the factor at 4.8 percent for determining the present value of the
remainder interest at the death of a person age 46 (the number of years nearest
B's actual age) is .24774. By converting the factor to an annuity factor, as
described in paragraph (d)(2)(iv)(A) of this section, the factor for the present
value of an annuity payable until the death of a person age 46 is 15.6721
(1.00000 minus .24774, divided by .048). The adjustment factor from Table K in §
20.2031-7(d)(6) at an interest rate of 4.8 percent for semiannual annuity
payments made at the end of the period is 1.0119. The present value of the
annuity at the date of A's death is, therefore, $158,585.98 ($10,000 X 15.6721 X
1.0119).

__Example 4__. __Annuity payable for a term of years.__ The decedent,
or the decedent's estate, was entitled to receive an annuity of $10,000 per year
payable in equal quarterly installments at the end of each quarter throughout a
term certain. At the time of the decedent's death, the section 7520 rate was 9.8
percent. A quarterly payment had just been made prior to the decedent's death
and payments were to continue for 5 more years. Under Table B in §
20.2031-7(d)(6) for the interest rate of 9.8 percent, the factor for the present
value of a remainder interest due after a term of 5 years is .626597. Converting
the factor to an annuity factor, as described in paragraph (d)(2)(iv)(A) of this
section, the factor for the present value of an annuity for a term of 5 years is
3.8102 (1.00000 minus .626597, divided by .098). The adjustment factor from
Table K in § 20.2031-7(d)(6) at an interest rate of 9.8 percent for quarterly
annuity payments made at the end of the period is 1.0360. The present value of
the annuity is, therefore, $39,473.67 ($10,000 X 3.8102 X 1.0360).

(6) [Reserved]. For further guidance, see § 20.2031-7(d)(6).

(7) __Actuarial Table S and Table 2000CM where the valuation date is on or
after May 1, 2009__. Except as provided in § 20.7520-2(b) (pertaining to
certain limitations on the use of prescribed tables), for determination of the
present value of an interest that is dependent on the termination of a life
interest, Table 2000CM and Table S (single life remainder factors applicable
where the valuation date is on or after May 1, 2009) contained in this paragraph
(d)(7) and Table J and Table K contained in § 20.2031-7(d)(6), must be used in
the application of the provisions of this section when the section 7520 interest
rate component is between 0.2 and 14 percent.

`
Table S`

(e)

(f) __Expiration date__. This section expires on or before May 1, 2012.

Par. 19. The undesignated center heading immediately preceding § 20.2031-7A is revised to read as follows:

Actuarial Tables Applicable Before May 1, 2009

Par. 20. Section 20.2031-7A is amended by:

1. Revising the section heading.

2. Adding paragraphs (f)(1), (f)(2), and (f)(3).

3. In newly-designated paragraph (f)(4), the heading and introductory text paragraph is revised.

4. The heading of Table S in newly-designated paragraph (f)(4) is revised.

5. The heading of Table 90CM in newly-designated paragraph (f)(4) is revised.

6. Paragraph (f)(5) is added.

The revisions and additions read as follows:

__§ 20.2031-7A Valuation of annuities, interests for life or term of years,
and remainder or reversionary interests for estates of decedents for which the
valuation date of the gross estate is before May 1, 2009__.

* * * * *

(f) __Valuation of annuities, interests for life or term of years, and
remainder or reversionary interests for estates of decedents for which the
valuation date of the gross estate is after April 30,1999, and before May 1,
2009__ -- (1) __In general__. Except as otherwise provided in §
20.2031-7(b) and § 20.7520-3(b) (pertaining to certain limitations on the use of
prescribed tables), if the valuation date for the gross estate of the decedent
is after April 30, 1999, and before May 1, 2009, the fair market value of
annuities, life estates, terms of years, remainders, and reversionary interests
is the present value of the interests determined by use of standard or special
section 7520 actuarial factors and the valuation methodology described in §
20.2031-7T(d). These factors are derived by using the appropriate section 7520
interest rate and, if applicable, the mortality component for the valuation date
of the interest that is being valued. See §§ 20.7520-1 through 20.7520-4. See
paragraph (f)(4) of this section for determination of the appropriate table for
use in valuing these interests.

(2) __Transitional rule__. (i) If a decedent dies after April 30, 1999,
and if on May 1, 1999, the decedent was mentally incompetent so that the
disposition of the decedent's property could not be changed, and the decedent
dies without having regained competency to dispose of the decedent's property or
dies within 90 days of the date on which the decedent first regains competency,
the fair market value of annuities, life estates, terms for years, remainders,
and reversions included in the gross estate of the decedent is their present
value determined either under this section or under the corresponding section
applicable at the time the decedent became mentally incompetent, at the option
of the decedent's executor. For example, see paragraph (d) of this section.

(ii) If a decedent dies after April 30, 1999, and before July 1, 1999, the fair market value of annuities, life estates, remainders, and reversions based on one or more measuring lives included in the gross estate of the decedent is their present value determined under this section by use of the section 7520 interest rate for the month in which the valuation date occurs (see §§ 20.7520-1(b) and 20.7520-2(a)(2)) and the appropriate actuarial tables under either paragraph (e)(4) or paragraph (f)(4) of this section, at the option of the decedent's executor.

(iii) For purposes of paragraphs (f)(2)(i) and (f)(2)(ii) of this section, where the decedent's executor is given the option to use the appropriate actuarial tables under either paragraph (e)(4) or paragraph (f)(4) of this section, the 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) __Publications and actuarial computations by the Internal Revenue
Service__. Many standard actuarial factors not included in paragraph (f)(4) of
this section or in § 20.2031-7(d)(6) are included in Internal Revenue Service
Publication 1457, "Actuarial Values, Book Aleph," (7-99). Publication 1457 also
includes examples that illustrate how to compute many special factors for more
unusual situations. Publication 1457 is no longer available for purchase from
the Superintendent of Documents, United States Government Printing Office.
However, pertinent factors in this publication may be obtained from:
CC:PA:LPD:PR (IRS Publication 1457), Room 5205, Internal Revenue Service,
P.O.Box 7604, Ben Franklin Station, Washington, DC 20044. If a special factor is
required in the case of an actual decedent, the Internal Revenue Service may
furnish the factor to the executor upon a request for a ruling. The request for
a ruling must be accompanied by a recitation of the facts including a statement
of the date of birth for each measuring life, the date of the decedent's death,
any other applicable dates, and a copy of the will, trust, or other relevant
documents. A request for a ruling must comply with the instructions for
requesting a ruling published periodically in the Internal Revenue Bulletin (see
§§ 601.201 and 601.601(d)(2)(ii)(__b__)) and include payment of the required
user fee.

(4) __Actuarial tables__. Except as provided in § 20.7520-3(b) (pertaining
to certain limitations on the use of prescribed tables), Life Table 90CM and
Table S (Single life remainder factors applicable where the valuation date is
after April 30, 1999, and before May 1, 2009), contained in this paragraph
(f)(4), and Table B, Table J, and Table K set forth in § 20.2031-7(d)(6) must be
used in the application of the provisions of this section when the section 7520
interest rate component is between 4.2 and 14 percent. Table S and Table 90CM
are as follows:

Table S. -- Based on Life on Life Table 90CM Single Life Remainder Factors

[Applicable After April 30, 1999, and Before May 1, 2009]

* * * * *

Table 90 CM.-Applicable After April 30, 1999, and Before May 1, 2009

* * * * *

(5) __Effective/applicability dates__. Paragraphs (f)(1) through (f)(4)
apply after April 30, 1999, and before May 1, 2009.

Par. 21. Section 20.2032-1 is amended by revising paragraph (f)(1) as follows:

__§ 20.2032-1 Alternate Valuation__.

* * * * *

(f) * * *

(1) [Reserved]. For further guidance, see § 20.2032-1T(f)(1).

* * * * *

Par. 22. Section 20.2032-1T is added to read as follows:

__§ 20.2032-1T Alternate Valuation (temporary)__.

(a) through (e) [Reserved]. For further guidance, see § 20.2032-1(a) through (e).

(f) [Reserved]. For further guidance, see § 20.2032-1(f).

(1) __Life estates, remainders, and similar interests__. The values of
life estates, remainders, and similar interests are to be obtained by applying
the methods prescribed in § 20.2031-7, using (i) the age of each person, the
duration of whose life may affect the value of the interest, as of the date of
the decedent's death, and (ii) the value of the property as of the alternate
valuation date. For example, assume that the decedent, or the decedent's estate,
was entitled to receive certain property worth $50,000 upon the death of A, who
was entitled to the income for life. At the time of the decedent's death, on or
after May 1, 2009, A was 47 years and 5 months old. In the month in which the
decedent died, the section 7520 rate was 6.2 percent. The value of the
decedent's remainder interest at the date of the decedent's death would, as
illustrated in __Example 1__ of § 20.2031-7T(d)(5), be $9,336.00 ($50,000 x
.18672). If, because of economic conditions, the property declined in value and
was worth only $40,000 on the date that was 6 months after the date of the
decedent's death, the value of the remainder interest would be $7,468.80
($40,000 X .18672), even though A would be 48 years old on the alternate
valuation date.

(f)(2) through (g) [Reserved]. For further guidance, see § 20.2032-1(f)(2) through (g).

(h) __Effective/applicability date__. Paragraph (f)(1) applies on or after
May 1, 2009.

(i) __Expiration date__. Paragraph (f)(1) expires on or before May 1,
2012.

Par. 23. Section 20.2055-2 is amended by revising the heading in paragraph (e)(3) and revising the text in paragraphs (e)(3)(iii) and (f)(4) to read as follows:

__§ 20.2055-2 Transfers not exclusively for charitable purposes__.

* * * * *

(e) * * *

(3) __Effective/applicability date__. * * *

(iii) [Reserved]. For further guidance, see § 20.2055-2T(e)(3)(iii).

* * * * *

(f) * * *

(4) [Reserved]. For further guidance, see § 20.2055-2T(f)(4).

* * * * *

Par. 24. Section 20.2055-2T is added to read as follows:

__§ 20.2055-2T Transfers not exclusively for charitable purposes (temporary)__.

(a) through (e)(3)(ii). [Reserved]. For further guidance see § 20.2055-2(a) through (e)(3)(ii).

(e)(3)(iii) The rule in paragraphs (e)(2)(vi)(a) and (e)(2)(vii)(a) of this section that guaranteed annuity interests or unitrust interests, respectively, may be payable for a specified term of years or for the life or lives of only certain individuals is generally effective in the case of transfers pursuant to wills and revocable trusts when the decedent dies on or after April 4, 2000. Two exceptions from the application of this rule in paragraphs (e)(2)(vi)(a) and (e)(2)(vii)(a) of this section are provided in the case of transfers pursuant to a will or revocable trust executed on or before April 4, 2000. One exception is for a decedent who dies on or before July 5, 2001, without having republished the will (or amended the trust) by codicil or otherwise. The other exception is for a decedent who was on April 4, 2000, under a mental disability that prevented a change in the disposition of the decedent's property, and who either does not regain competence to dispose of such property before the date of death, or dies prior to the later of 90 days after the date on which the decedent first regains competence, or July 5, 2001, without having republished the will (or amended the trust) by codicil or otherwise. If a guaranteed annuity interest or unitrust interest created pursuant to a will or revocable trust when the decedent dies on or after April 4, 2000, uses an individual other than one permitted in paragraphs (e)(2)(vi)(a) and (vii)(a) of this section, and the interest does not qualify for this transitional relief, the interest may be reformed into a lead interest payable for a specified term of years. The term of years is determined by taking the factor for valuing the annuity or unitrust interest for the named individual measuring life and identifying the term of years (rounded up to the next whole year) that corresponds to the equivalent term of years factor for an annuity or unitrust interest. For example, in the case of an annuity interest payable for the life of an individual age 40 at the time of the transfer on or after May 1, 2009, assuming an interest rate of 7.4 percent under section 7520, the annuity factor from column 1 of Table S(7.4), contained in IRS Publication 1457, Actuarial Valuations Version 3A, for the life of an individual age 40 is 12.1519 (1.00000 minus .10076, divided by .074). Based on Table B(7.4), contained in Publication 1457, Actuarial Valuations Version 3A, the factor 12.1519 corresponds to a term of years between 32 and 33 years. Accordingly, the annuity interest must be reformed into an interest payable for a term of 33 years. A judicial reformation must be commenced prior to the later of July 5, 2001, or the date prescribed by section 2055(e)(3)(C)(iii). Any judicial reformation must be completed within a reasonable time after it is commenced. A non-judicial reformation is permitted if effective under state law, provided it is completed by the date on which a judicial reformation must be commenced. In the alternative, if a court, in a proceeding that is commenced on or before July 5, 2001, declares any transfer made pursuant to a will or revocable trust where the decedent dies on or after April 4, 2000, and on or before March 6, 2001, null and void ab initio, the Internal Revenue Service will treat such transfers in a manner similar to that described in section 2055(e)(3)(J).

(e)(4) through (f)(3). [Reserved]. For further guidance see § 20.2055-2(e)(4) through (f)(3).

(f)(4) __Other decedents__. The present value of an interest not described
in paragraph (f)(2) of this section is to be determined under § 20.2031-7T(d) in
the case of decedents where the valuation date of the gross estate is on or
after May 1, 2009, or under § 20.2031-7A in the case of decedents where the
valuation date of the gross estate is before May 1, 2009.

(f)(5) [Reserved]. For further guidance see § 20.2055-2(f)(5).

(f)(6) __Effective/applicability date__. Paragraphs (e)(3)(iii) and (f)(4)
apply on or after May 1, 2009.

(f)(7) __Expiration date__. Paragraphs (e)(3)(iii) and (f)(4) expire on or
before May 1, 2012.

Par. 25. Section 20.2056A-4 is amended by revising paragraph (c)(4)(ii)(B)
and __Example 4__ of paragraph (d). The revisions reads as follows:

__§ 20.2056A-4 Procedures for conforming marital trusts and nontrust marital
transfers to the requirements of a qualified domestic trust__.

* * * * *

(c) * * *

(4) * * *

(ii) * * *

(B) [Reserved]. For further guidance, see § 20.2056A-4T(c)(4)(ii)(B).

(d) * * *

__Example 4__. [Reserved]. For further guidance, see § 20.2056A-4T(d) __
Example 4__.

Par. 26. Section 20.2056A-4T is added to read as follows:

__§ 20.2056A-4T Procedures for conforming marital trusts and nontrust
marital transfers to the requirements of a qualified domestic trust (temporary)__.

(a) through (c)(4)(ii)(A). [Reserved]. For further guidance see § 20.2056A-4(a) through (c)(4)(ii)(A).

(c)(4)(ii)(B) The total present value of the annuity or other payment is the present value of the nonassignable annuity or other payment as of the date of the decedent's death, determined in accordance with the interest rates and mortality data prescribed by section 7520. The expected annuity term is the number of years that would be required for the scheduled payments to exhaust a hypothetical fund equal to the present value of the scheduled payments. This is determined by first dividing the total present value of the payments by the annual payment. From the quotient so obtained, the expected annuity term is derived by identifying the term of years that corresponds to the annuity factor equal to the quotient. This is determined by using column 1 of Table B, for the applicable interest rate, contained in Publication 1457, Actuarial Valuations Version 3A. A copy of this publication is available beginning May 1, 2009, at no charge, electronically via the IRS Internet site at www.irs.gov. If the quotient obtained falls between two terms, the longer term is used.

(c)(5) through (c)(7). [Reserved]. For further guidance see § 20.2056A-4(c)(5) through (c)(7).

(d) __Examples 1__ through __3__. [Reserved]. For further guidance see
§ 20.2056A-4(d) __Examples 1__ through __3__.

__Example 4__. __Computation of corpus portion of annuity payment__. (i)
At the time of D's death on or after May 1, 2009, D is a participant in an
employees' pension plan described in section 401(a). On D's death, D's spouse S,
a resident of the United States, becomes entitled to receive a survivor's
annuity of $72,000 per year, payable monthly, for life. At the time of D's
death, S is age 60. Assume that under section 7520, the appropriate discount
rate to be used for valuing annuities in the case of this decedent is 6.0
percent. The annuity factor at 6.0 percent for a person age 60 is 11.0625
(1.0000 minus .33625, divided by .06). The adjustment factor at 6.0 percent in
Table K for monthly payments is 1.0272. Accordingly, the right to receive
$72,000 per year on a monthly basis is equal to the right to receive $73,958.40
($72,000 x 1.0272) on an annual basis.

(ii) The corpus portion of each annuity payment received by S is determined as follows. The first step is to determine the annuity factor for the number of years that would be required to exhaust a hypothetical fund that has a present value and a payout corresponding to S 's interest in the payments under the plan, determined as follows:

(A) Present value of S 's annuity: $73,958.40 x 11.0625 = $818,164.80.

(B) Annuity Factor for Expected Annuity Term: $818,164.80 / $73,958.40 = 11.0625

(iii) The second step is to determine the number of years that would be required for S 's annuity to exhaust a hypothetical fund of $818,164.80. The term certain annuity factor of 11.0625 falls between the annuity factors for 18 and 19 years in a 6.0 percent term certain annuity table (Column 1 of Table B, Publication 1457 Actuarial Valuations Version 3A, which may be obtained on the IRS Internet site). Accordingly, the expected annuity term is 19 years.

(iv) The third step is to determine the corpus amount by dividing the expected term of 19 years into the present value of the hypothetical fund as follows:

Corpus amount of annual payment: $818,164.80/19 = $43,061.31

(v) In the fourth step, the corpus portion of each annuity payment is
determined by dividing the corpus amount of each annual payment by the annual
annuity payment (adjusted for payments more frequently than annually as in (i)
of this __Example 4__) as follows:

Corpus portion of each annuity payment: $43,061.31/$73,958.40 = .58

(vi) Accordingly, 58 percent of each payment to S is deemed to be a distribution of corpus. A marital deduction is allowed for $818,164.80, the present value of the annuity as of D's date of death, if either: S agrees to roll over the corpus portion of each payment to a QDOT and the executor files the Information Statement described in paragraph (c)(5) of this section and the Roll Over Agreement described in paragraph (c)(7) of this section; or S agrees to pay the tax due on the corpus portion of each payment and the executor files the Information Statement described in paragraph (c)(5) of this section and the Payment Agreement described in paragraph (c)(6) of this section.

__Example 5__. [Reserved]. For further guidance see § 20.2056A-4(d) __
Example 5__.

(e) __Effective/applicability date__. Paragraph (c)(4)(ii)(B) and __
Example 4__ in paragraph (d) of this section are applicable with respect to
decedents dying on or after May 1, 2009.

(f) __Expiration date__. Paragraph (c)(4)(ii)(B) and __Example 4__ in
paragraph (d) of this section expire on or before May 1, 2012.

Par. 27. Section 20.7520-1 is amended by:

1. Revising the section heading.

2. Revising the second sentence of paragraph (a)(1) and revising paragraph (a)(2).

3. Removing the last two sentences of paragraph (b)(2) and adding a new sentence at the end of the paragraph.

4. Revising paragraphs (c)(1), (c)(2), and (d).

The revisions and additions read as follows:

__§ 20.7520-1 Valuation of annuities, unitrust interests, interests for life
or terms of years, and remainder or reversionary interests prior to May 1, 2009__.

* * * * *

(a) * * *(1) * * * For periods prior to May 1, 2009, see § 20.2031-7A for the computation of the value of annuities, unitrust interests, life estates, terms for years, remainders, and reversions, other than interests described in paragraphs (a)(2) and (a)(3) of this section.

(2) For a transfer to a pooled income fund prior to May 1, 2009, see § 1.642(c)-6A (Income Tax Regulations) with respect to the valuation of the remainder interest.

* * * * *

(b) * * *

(2) * * * For decedents' estates with valuation dates after April 30, 1989, and before May 1, 2009, the mortality component tables are contained in § 20.2031-7A.

(c) * * *

(1) [Reserved]. For further guidance, see § 20.7520-1T(c)(1).

(2) __Internal Revenue Service publications containing tables with interest
rates between 2.2 and 22 percent for valuation dates after April 30, 1999, and
before May 1, 2009__. The following publications are no longer available for
purchase from the Superintendent of Documents, United States Government Printing
Office; however, they may be obtained from CC:PA:LPD:PR, Room 5205, Internal
Revenue Service, P.O.Box 7604, Ben Franklin Station, Washington, DC 20044:

* * * * *

(d) __Effective/applicability dates__. This section applies after April
30, 1989, and before May 1, 2009.

Par. 28. Section 20.7520-1T is added to read as follows:

__§ 20.7520-1T Valuation of annuities, unitrust interests, interests for
life or terms of years, and remainder or reversionary interests on or after May
1, 2009 (temporary)__.

(a) __General actuarial valuations__. (1) Except as otherwise provided in
this section and in § 20.7520-3 (relating to exceptions to the use of prescribed
tables under certain circumstances), in the case of estates of decedents with
valuation dates after April 30, 1989, the fair market value of annuities,
interests for life or for a term of years (including unitrust interests),
remainders, and reversions is their present value determined under this section.
See § 20.2031-7T(d) (and, for certain prior periods, § 20.2031-7A) for the
computation of the value of annuities, unitrust interests, life estates, terms
for years, remainders, and reversions, other than interests described in
paragraphs (a)(2) and (a)(3) of this section.

(2) In the case of a transfer to a pooled income fund with a valuation date on or after May 1, 2009, see § 1.642(c)-6T(e), Income Tax Regulations, (or, for certain prior periods, § 1.642(c)-6A) with respect to the valuation of the remainder interest.

(3) [Reserved]. For further guidance, see § 20.7520-1(a)(3).

(b)(1) [Reserved]. For further guidance, see § 20.7520-1(b)(1).

(2) __Mortality component__. The mortality component reflects the
mortality data most recently available from the United States census. As new
mortality data becomes available after each decennial census, the mortality
component described in this section will be revised periodically and the revised
mortality component tables will be published in the regulations at that time.
For decedent's estates with valuation dates on or after May 1, 2009, the
mortality component table (Table 2000CM) is contained in § 20.2031-7T(d)(7). See
§ 20.2031-7A for mortality component tables applicable to decedent's estates
with valuation dates before May 1, 2009.

(c) [Reserved]. For further guidance, see § 20.7520-1(c).

(1) __Regulation sections containing tables with interest rates between 0.2
and 14 percent for valuation dates on or after May 1, 2009__. Section
1.642(c)-6T(e)(6) contains Table S used for determining the present value of a
single life remainder interest in a pooled income fund as defined in §
1.642(c)-5. See § 1.642(c)-6A for single life remainder factors applicable to
valuation dates before May 1, 2009. Section 1.664-4(e)(6) contains Table F
(payout factors) and Table D (actuarial factors used in determining the present
value of a remainder interest postponed for a term of years).
Section1.664-4T(e)(7) contains Table U(1) (unitrust single life remainder
factors). These tables are used in determining the present value of a remainder
interest in a charitable remainder unitrust as defined in § 1.664-3. See §
1.664-4A for unitrust single life remainder factors applicable to valuation
dates before May 1, 2009. Section 20.2031-7(d)(6) contains Table B (actuarial
factors used in determining the present value of an interest for a term of
years), Table K (annuity end-of-interval adjustment factors), and Table J (term
certain annuity beginning-of-interval adjustment factors). Section
20.2031-7T(d)(7) contains Table S (single life remainder factors), and Table
2000CM (mortality components). These tables are used in determining the present
value of annuities, life estates, remainders, and reversions. See § 20.2031-7A
for single life remainder factors applicable to valuation dates before May 1,
2009.

(2) __Internal Revenue Service publications containing tables with interest
rates between 0.2 and 22 percent for valuation dates on or after May 1, 2009__.
The following documents are available beginning May 1, 2009, at no charge,
electronically via the IRS Internet site at www.irs.gov:

(i) Internal Revenue Service Publication 1457, "Actuarial Valuations Version 3A" (2009). This publication includes tables of valuation factors, as well as examples that show how to compute other valuation factors, for determining the present value of annuities, life estates, terms of years, remainders, and reversions, measured by one or two lives. These factors may also be used in the valuation of interests in a charitable remainder annuity trust as defined in § 1.664-2 and a pooled income fund as defined in § 1.642(c)-5.

(ii) Internal Revenue Service Publication 1458, "Actuarial Valuations Version 3B" (2009). This publication includes term certain tables and tables of one and two life valuation factors for determining the present value of remainder interests in a charitable remainder unitrust as defined in § 1.664-3.

(iii) Internal Revenue Service Publication 1459, "Actuarial Valuations Version 3C" (2009). This publication includes tables for computing depreciation adjustment factors. See § 1.170A-12T.

(d) __Effective/applicability date__. This section applies on or after May
1, 2009.

(e) __Expiration date__. This section expires on or before May 1, 2012.

PART 25 -- GIFT TAX; GIFTS MADE AFTER DECEMBER 31, 1954

Par. 29. The authority citation for part 25 is amended by adding entries in numerical order to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Section 25.2512-5T also issued under 26 U.S.C. 7520(c)(2).

Section 25.7520-1T also issued under 26 U.S.C. 7520(c)(2). * * *

Par. 30. Section 25.2512-0 is revised to read as follows:

__§ 25.2512-0 Table of contents__.

This section lists the section headings that appear in the regulations under section 2512.

§ 25.2512-1 Valuation of property; in general.

§ 25.2512-2 Stocks and bonds.

§ 25.2512-3 Valuation of interests in businesses.

§ 25.2512-4 Valuation of notes.

§ 25.2512-5 Valuation of annuities, unitrust interests, interests for life or term of years, and remainder or reversionary interests.

§ 25.2512-5T Valuation of annuities, unitrust interests, interests for life or term of years, and remainder or reversionary interests (temporary).

§ 25.2512-6 Valuation of certain life insurance and annuity contracts; valuation of shares in an open-end investment company.

§ 25.2512-7 Effect of excise tax.

§ 25.2512-8 Transfers for insufficient consideration.

Actuarial Tables Applicable Before May 1, 2009

§ 25.2512-5A Valuation of annuities, unitrust interests, interests for life or term of years, and remainder or reversionary interests transferred before May 1, 2009.

Par. 31. Section 25.2512-5 is amended by revising paragraphs (c), (d), and (e) to read as follows:

The revised provisions read as follows:

__§ 25.2512-5 Valuation of annuities, unitrust interests, interests for life
or term of years, and remainder or reversionary interests__.

* * * * *

(c) and (d) [Reserved]. For further guidance, see § 25.2512-5T(c) and (d).

(e) __Effective/applicability dates__. This section applies after April
30, 1999, and before May 1, 2009.

Par. 32. Section 25.2512-5T is added to read as follows:

__§ 25.2512-5T Valuation of annuities, unitrust interests, interests for
life or term of years, and remainder or reversionary interests (temporary)__.

(a) and (b) [Reserved]. For further guidance, see § 25.2512-5(a) and (b).

(c) __Actuarial valuations__. The present value of annuities, unitrust
interests, life estates, terms of years, remainders, and reversions transferred
by gift on or after May 1, 2009, is determined under paragraph (d) of this
section. The present value of annuities, unitrust interests, life estates, terms
of years, remainders, and reversions transferred by gift before May 1, 2009, is
determined under the following sections:

` Transfers Applicable`

` After Before Regulations`

` - 01-01-52 25.2512-5A(a)`

` 12-31-51 01-01-71 25.2512-5A(b)`

` 12-31-70 12-01-83 25.2512-5A(c)`

` 11-30-83 05-01-89 25.2512-5A(d)`

` 04-30-89 05-01-99 25.2512-5A(e)`

` 04-30-99 05-01-09 25.2512-5A(f)`

(d) __Actuarial valuations on or after May 1, 2009__ -- (1) __In general__.
Except as otherwise provided in paragraph (b) of this section and § 25.7520-3(b)
(relating to exceptions to the use of prescribed tables under certain
circumstances), if the valuation date for the gift is on or after May 1, 2009,
the fair market value of annuities, life estates, terms of years, remainders,
and reversions transferred on or after May 1, 2009, is the present value of such
interests determined under paragraph (d)(2) of this section and by use of
standard or special section 7520 actuarial factors. These factors are derived by
using the appropriate section 7520 interest rate and, if applicable, the
mortality component for the valuation date of the interest that is being valued.
See §§ 25.7520-1 through 25.7520-4. The fair market value of a qualified annuity
interest described in section 2702(b)(1) and a qualified unitrust interest
described in section 2702(b)(2) is the present value of such interests
determined under § 25.7520-1(c).

(2) __Specific interests__. When the donor transfers property in trust or
otherwise and retains an interest therein, generally, the value of the gift is
the value of the property transferred less the value of the donor's retained
interest. However, if the donor transfers property after October 8, 1990, to or
for the benefit of a member of the donor's family, the value of the gift is the
value of the property transferred less the value of the donor's retained
interest as determined under section 2702. If the donor assigns or relinquishes
an annuity, life estate, remainder, or reversion that the donor holds by virtue
of a transfer previously made by the donor or another, the value of the gift is
the value of the interest transferred. However, see section 2519 for a special
rule in the case of the assignment of an income interest by a person who
received the interest from a spouse.

(i) __Charitable remainder trusts__. The fair market value of a remainder
interest in a pooled income fund, as defined in § 1.642(c)-5, is its value
determined under § 1.642(c)-6T(e) (see § 1.642(c)-6A for certain prior periods).
The fair market value of a remainder interest in a charitable remainder annuity
trust, as described in § 1.664-2(a), is its present value determined under §
1.664-2(c). The fair market value of a remainder interest in a charitable
remainder unitrust, as defined in § 1.664-3, is its present value determined
under § 1.664-4T(e). The fair market value of a life interest or term for years
in a charitable remainder unitrust is the fair market value of the property as
of the date of transfer less the fair market value of the remainder interest,
determined under § 1.664-4T(e)(4) and (5).

(ii) __Ordinary remainder and reversionary interests__. If the interest to
be valued is to take effect after a definite number of years or after the death
of one individual, the present value of the interest is computed by multiplying
the value of the property by the appropriate remainder interest actuarial factor
(that corresponds to the applicable section 7520 interest rate and remainder
interest period) in Table B (for a term certain) or the appropriate Table S (for
one measuring life), as the case may be. Table B is contained in §
20.2031-7(d)(6) and Table S (for one measuring life when the valuation date is
on or after May 1, 2009) is included in § 20.2031-7T(d)(7) and Internal Revenue
Service Publication 1457. See § 20.2031-7A containing Table S for valuation of
interests before May 1, 2009. For information about obtaining actuarial factors
for other types of remainder interests, see paragraph (d)(4) of this section.

(iii) __Ordinary term-of-years and life interests__. If the interest to be
valued is the right of a person to receive the income of certain property, or to
use certain nonincome-producing property, for a term of years or for the life of
one individual, the present value of the interest is computed by multiplying the
value of the property by the appropriate term-of-years or life interest
actuarial factor (that corresponds to the applicable section 7520 interest rate
and term-of-years or life interest period). Internal Revenue Service Publication
1457 includes actuarial factors for a remainder interest after a term of years
in Table B and after the life of one individual in Table S (for one measuring
life when the valuation date is on or after May 1, 2009). However, term-of-years
and life interest actuarial factors are not included in Table B in §
20.2031-7(d)(6) or Table S in § 20.2031-7T(d)(7) (or in § 20.2031-7A). If
Internal Revenue Service Publication 1457 (or any other reliable source of
term-of-years and life interest actuarial factors) is not conveniently
available, an actuarial factor for the interest may be derived mathematically.
This actuarial factor may be derived by subtracting the correlative remainder
factor (that corresponds to the applicable section 7520 interest rate) in Table
B (for a term of years) in § 20.2031-7(d)(6) or in Table S (for the life of one
individual) in § 20.2031-7T(d)(7), as the case may be, from 1.000000. For
information about obtaining actuarial factors for other types of term-of-years
and life interests, see paragraph (d)(4) of this section.

(iv) __Annuities__. (A) If the interest to be valued is the right of a
person to receive an annuity that is payable at the end of each year for a term
of years or for the life of one individual, the present value of the interest is
computed by multiplying the aggregate amount payable annually by the appropriate
annuity actuarial factor (that corresponds to the applicable section 7520
interest rate and annuity period). Internal Revenue Service Publication 1457
includes actuarial factors in Table B (for a remainder interest after an annuity
payable for a term of years) and in Table S (for a remainder interest after an
annuity payable for the life of one individual when the valuation date is on or
after May 1, 2009). However, annuity actuarial factors are not included in Table
B in § 20.2031-7(d)(6) or Table S in § 20.2031-7T(d)(7) (or in § 20.2031-7A). If
Internal Revenue Service Publication 1457 (or any other reliable source of
annuity actuarial factors) is not conveniently available, an annuity factor for
a term of years or for one life may be derived mathematically. This annuity
factor may be derived by subtracting the applicable remainder factor (that
corresponds to the applicable section 7520 interest rate and annuity period) in
Table B (in the case of a term-of-years annuity) in § 20.2031-7(d)(6) or in
Table S (in the case of a one-life annuity) in § 20.2031-7T(d)(7), as the case
may be, from 1.000000 and then dividing the result by the applicable section
7520 interest rate expressed as a decimal number. See § 20.2031-7T(d)(2)(iv) for
an example that illustrates the computation of the present value of an annuity.

(B) If the annuity is payable at the end of semiannual, quarterly, monthly, or weekly periods, the product obtained by multiplying the annuity factor by the aggregate amount payable annually is then multiplied by the applicable adjustment factor set forth in Table K in § 20.2031-7(d)(6) at the appropriate interest rate component for payments made at the end of the specified periods. The provisions of this paragraph (d)(2)(iv)(B) are illustrated by the following example:

__Example__. In July of a year after 2008, the donor agreed to pay the
annuitant the sum of $10,000 per year, payable in equal semiannual installments
at the end of each period. The semiannual installments are to be made on each
December 31st and June 30th. The annuity is payable until the annuitant's death.
On the date of the agreement, the annuitant is 68 years and 5 months old. The
donee annuitant's age is treated as 68 for purposes of computing the present
value of the annuity. The section 7520 rate on the date of the agreement is 6.6
percent. Under Table S in § 20.2031-7T(d)(7), the factor at 6.6 percent for
determining the present value of a remainder interest payable at the death of an
individual aged 68 is .42001. Converting the remainder factor to an annuity
factor, as described above, the annuity factor for determining the present value
of an annuity transferred to an individual age 68 is 8.7877 (1.00000 minus
.42001 divided by .066). The adjustment factor from Table K in § 20.2031-7(d)(6)
in the column for payments made at the end of each semiannual period at the rate
of 6.6 percent is 1.0162. The aggregate annual amount of the annuity, $10,000,
is multiplied by the factor 8.7877 and the product is multiplied by 1.0162. The
present value of the donee's annuity is, therefore, $89,300.61 ($10,000 X 8.7877
X 1.0162).

(C) If an annuity is payable at the beginning of annual, semiannual, quarterly, monthly, or weekly periods for a term of years, the value of the annuity is computed by multiplying the aggregate amount payable annually by the annuity factor described in paragraph (d)(2)(iv)(A) of this section; and the product so obtained is then multiplied by the adjustment factor in Table J in § 20.2031-7(d)(6) at the appropriate interest rate component for payments made at the beginning of specified periods. If an annuity is payable at the beginning of annual, semiannual, quarterly, monthly, or weekly periods for one or more lives, the value of the annuity is the sum of the first payment and the present value of a similar annuity, the first payment of which is not to be made until the end of the payment period, determined as provided in paragraph (d)(2)(iv)(B) of this section.

(v) __Annuity and unitrust interests for a term of years or until the prior
death of an individual__ -- (A) __Annuity interests__. The present value of
an annuity interest that is payable until the earlier to occur of the lapse of a
specific number of years or the death of an individual may be computed with
values from the tables in §§ 20.2031-7(d)(6) and 20.2031-7T(d)(7) as described
in the following example:

__Example__. The donor transfers $100,000 into a trust on or after May 1,
2009, and retains the right to receive an annuity from the trust in the amount
of $6,000 per year, payable in equal semiannual installments at the end of each
period. The semiannual installments are to be made on each June 30th and
December 31st. The annuity is payable for 10 years or until the donor's prior
death. At the time of the transfer, the donor is 59 years and 6 months old. The
donor's age is deemed to be 60 for purposes of computing the present value of
the retained annuity. The section 7520 rate for the month in which the transfer
occurred is 5.8 percent. The present value of the donor's retained interest is
$42,575.65, determined as follows:

` TABLE S value at 5.8 percent, age 60
.34656`

` TABLE S value at 5.8 percent, age 70
.49025`

` TABLE 2000CM value at age 70
74794`

` TABLE 2000CM value at age 60
87595`

` TABLE B value at 5.8 percent, 10 years
.569041`

` TABLE K value at 5.8 percent
1.0143`

Factor for donor's retained interest at 5.8 percent:

` (1.00000 - .34656) - (.569041 X (74794/87595) X (1.00000
- .49025)) = 6.9959`

`
__________________________________________________________________`

` .058`

Present value of donor's retained interest:

($6,000 X 6.9959 X 1.0143) $42,575.65

(B) __Unitrust interests__. The present value of a unitrust interest that
is payable until the earlier to occur of the lapse of a specific number of years
or the death of an individual may be computed with values from the tables in §§
1.664-4(e)(6) and 1.664-4T(e)(7) as described in the following example:

__Example__. The donor who, as of the nearest birthday, is 60 years old,
transfers $100,000 to a unitrust on January 1^{st} of a year after 2009.
The trust instrument requires that each year the trust pay to the donor, in
equal semiannual installments on June 30th and December 31st, 6 percent of the
fair market value of the trust assets, valued as of January 1st each year, for
10 years or until the prior death of the donor. The section 7520 rate for the
January in which the transfer occurred 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 5.720 percent (6% X .953317). The present value of the donor's retained
interest is $41,920.00 determined as follows:

` TABLE U(1) value at 5.6 percent, age 60
.33970`

` TABLE U(1) value at 5.6 percent, age 70
.48352`

` TABLE 2000CM value at age 70
74794`

` TABLE 2000CM value at age 60
87595`

` TABLE D value at 5.6 percent, 10 years
.561979`

Factor for donor's retained interest at 5.6 percent:

(1.000000 - .33970) - (.561979 X (74794/87595) X (1.000000 - .48352)) = .41247

` TABLE U(1) value at 5.8 percent, age 60
.32846`

` TABLE U(1) value at 5.8 percent, age 70
.47241`

` TABLE 2000CM value at age 70
74794`

` TABLE 2000CM value at age 60
87595`

` TABLE D value at 5.8 percent, 10 years
.550185`

Factor for donor's retained interest at 5.8 percent:

` (1.000000 - .32846) - (.550185 X (74974/87595) X
(1.000000 - .47241)) = .42369`

`
Difference .01122`

` Interpolation adjustment:`

` 5.720% - 5.6% =
x`

` _______________
_________`

` 0.2%
.01122`

` x = .00673`

` Factor at 5.6 percent, age 60
.41247`

` Plus: Interpolation adjustment
.00673`

` Interpolated Factor
.41920`

` Present value of donor's retained interest:`

` ($100,000 X .41920)
$41,920.00`

(3) __Transitional rule__. If the valuation date of a transfer of property by
gift is on or after May 1, 2009, and before July 1, 2009, the fair market value
of the interest transferred is determined by use of the section 7520 interest
rate for the month in which the valuation date occurs (see §§ 25.7520-1(b) and
25.7520-2(a)(2)) and the appropriate actuarial tables under either §
20.2031-7T(d)(7) or § 20.2031-7A(f)(4), at the option of the donor. However,
with respect to each individual transaction and with respect to all transfers
occurring on the valuation date, the donor must use the same actuarial tables
(for example, gift and income tax charitable deductions with respect to the same
transfer must be determined based on the same tables, and all transfers made on
the same date must be valued based on the same tables).

(4) __Publications and actuarial computations by the Internal Revenue
Service__. Many standard actuarial factors not included in § 20.2031-7(d)(6)
or § 20.2031-7T(d)(7) are included in Internal Revenue Service Publication 1457,
"Actuarial Valuations Version 3A" (2009). Internal Revenue Service Publication
1457 also includes examples that illustrate how to compute many special factors
for more unusual situations. A copy of this publication is available beginning
May 1, 2009, at no charge, electronically via the IRS Internet site at
www.irs.gov. If a special factor is required in the case of a completed gift,
the Internal Revenue Service may furnish the factor to the donor upon a request
for a ruling. The request for a ruling must be accompanied by a recitation of
the facts including a statement of the date of birth for each measuring life,
the date of the gift, any other applicable dates, and a copy of the will, trust,
or other relevant documents. A request for a ruling must comply with the
instructions for requesting a ruling published periodically in the Internal
Revenue Bulletin (see §§ 601.201 and 601.601(d)(2)(ii)(__b__)) and include
payment of the required user fee.

(e) __Effective/applicability date__. This section applies on or after May
1, 2009.

(f) __Expiration date__. This section expires on or before May 1, 2012.

Par. 33. The undesignated center heading immediately preceding § 25.2512-5A is revised to read as follows:

Actuarial Tables Applicable Before May 1, 2009

Par. 34. Section 25.2512-5A is amended by revising the section heading and adding paragraph (f) to read as follows:

__§ 25.2512-5A Valuation of annuities, unitrust interests, interests for
life or term of years, and remainder or reversionary interests transferred
before May 1, 2009__.

* * * * *

(f) __Valuation of annuities, unitrust interests, interests for life or term
of years, and remainder or reversionary interests transferred after April 30,
1999, and before May 1, 2009__ -- (1) __In general__. Except as otherwise
provided in §§ 25.2512-5(b) and 25.7520-3(b) (pertaining to certain limitations
on the use of prescribed tables), if the valuation date of the transferred
interest is after April 30, 1999, and before May 1, 2009, the fair market value
of annuities, unitrust interests, life estates, terms of years, remainders, and
reversions transferred by gift is the present value of the interests determined
by use of standard or special section 7520 actuarial factors and the valuation
methodology described in § 25.2512-5T(d). Sections 20.2031-7(d)(6) and
20.2031-7A(f)(4) and related sections provide tables with standard actuarial
factors and examples that illustrate how to use the tables to compute the
present value of ordinary annuity, life, and remainder interests in property.
These sections also refer to standard and special actuarial factors that may be
necessary to compute the present value of similar interests in more unusual fact
situations. These factors and examples are also generally applicable for gift
tax purposes in computing the values of taxable gifts.

(2) __Transitional rule__. If the valuation date of a transfer of property
by gift is after April 30, 1999, and before July 1, 1999, the fair market value
of the interest transferred is determined by use of the section 7520 interest
rate for the month in which the valuation date occurs (see §§ 25.7520-1(b) and
25.7520-2(a)(2)) and the appropriate actuarial tables under either §
20.2031-7A(e)(4) or § 20.2031-7A(f)(4), at the option of the donor. However,
with respect to each individual transaction and with respect to all transfers
occurring on the valuation date, the donor must use the same actuarial tables
(for example, gift and income tax charitable deductions with respect to the same
transfer must be determined based on the same tables, and all transfers made on
the same date must be valued based on the same tables).

(3) __Publications and actuarial computations by the Internal Revenue
Service__. Many standard actuarial factors not included in §§ 20.2031-7(d)(6)
and 20.2031-7A(f)(4) are included in Internal Revenue Service Publication 1457,
"Actuarial Values, Book Aleph," (7-99). Internal Revenue Service Publication
1457 also includes examples that illustrate how to compute many special factors
for more unusual situations. Publication 1457 is no longer available for
purchase from the Superintendent of Documents, United States Government Printing
Office. However, pertinent factors in this publication may be obtained from:
CC:PA:LPD:PR (IRS Publication 1457), Room 5205, Internal Revenue Service,
P.O.Box 7604, Ben Franklin Station, Washington, DC 20044. If a special factor is
required in the case of a completed gift, the Internal Revenue Service may
furnish the factor to the donor upon a request for a ruling. The request for a
ruling must be accompanied by a recitation of the facts including a statement of
the date of birth for each measuring life, the date of the gift, any other
applicable dates, and a copy of the will, trust, or other relevant documents. A
request for a ruling must comply with the instructions for requesting a ruling
published periodically in the Internal Revenue Bulletin (see §§ 601.201 and
601.601(d)(2)(ii)(__b__)) and include payment of the required user fee.

(4) __Effective/applicability dates__. Paragraphs (f)(1) through (f)(3)
apply after April 30, 1999, and before May 1, 2009.

Par. 35. Section 25.2522(c)-3 is amended by revising paragraph (e) to read as follows:

__§ 25.2522(c)-3 Transfers not exclusively for charitable, etc., purposes in
the case of gifts made after July 31, 1969__.

* * * * *

(e) [Reserved]. For further guidance, see § 25.2522(c)-3T(e).

Par. 36. Section 25.2522(c)-3T is added as follows:

__§ 25.2522(c)-3T Transfers not exclusively for charitable, etc., purposes
in the case of gifts made after July 31, 1969 (temporary)__.

(a) through (d) [Reserved]. For further guidance, see § 25.2522(c)-3(a) through (d).

(e) __Effective/applicability date__. This section applies only to gifts
made after July 31, 1969. In addition, the rule in paragraphs (c)(2)(vi)(a) and
(c)(2)(vii)(a) of this section that guaranteed annuity interests or unitrust
interests, respectively, may be payable for a specified term of years or for the
life or lives of only certain individuals applies to transfers made on or after
April 4, 2000. If a transfer is made on or after April 4, 2000, that uses an
individual other than one permitted in paragraphs (c)(2)(vi)(a) and (c)(2)(vii)(a)
of this section, the interest may be reformed into a lead interest payable for a
specified term of years. The term of years is determined by taking the factor
for valuing the annuity or unitrust interest for the named individual measuring
life and identifying the term of years (rounded up to the next whole year) that
corresponds to the equivalent term of years factor for an annuity or unitrust
interest. For example, in the case of an annuity interest payable for the life
of an individual age 40 at the time of the transfer on or after May 1, 2009,
assuming an interest rate of 7.4 percent under section 7520, the annuity factor
from column 1 of Table S(7.4), contained in IRS Publication 1457, Actuarial
Valuations Version 3A, for the life of an individual age 40 is 12.1519 (1 -
.10076 / .074). Based on Table B(7.4), contained in Publication 1457, Actuarial
Valuations Version 3A, the factor 12.1519 corresponds to a term of years between
32 and 33 years. Accordingly, the annuity interest must be reformed into an
interest payable for a term of 33 years. A judicial reformation must be
commenced prior to October 15th of the year following the year in which the
transfer is made and must be completed within a reasonable time after it is
commenced. A non-judicial reformation is permitted if effective under state law,
provided it is completed by the date on which a judicial reformation must be
commenced. In the alternative, if a court, in a proceeding that is commenced on
or before July 5, 2001, declares any transfer, made on or after April 4, 2000,
and on or before March 6, 2001, null and void ab initio, the Internal Revenue
Service will treat such transfers in a manner similar to that described in
section 2055(e)(3)(J).

Par. 37. Section 25.7520-1 is amended by:

1. Revising the section heading.

2. Revising the second sentence of paragraph (a)(1) and revising paragraph (a)(2).

3. Removing the last two sentences of paragraph (b)(2) and adding a new sentence at the end.

4. Revising paragraphs (c)(1), (c)(2), and (d).

The revisions and additions read as follows:

__§ 25.7520-1 Valuation of annuities, unitrust interests, interests for life
or terms of years, and remainder or reversionary interests prior to May 1, 2009__.

* * * * *

(a) * * *(1) * * * For periods prior to May 1, 2009, see § 20.2031-7A for the computation of the value of annuities, unitrust interests, life estates, terms for years, remainders, and reversions, other than interests described in paragraphs (a)(2) and (a)(3) of this section.

(2) For a gift to a pooled income fund prior to May 1, 2009, see § 1.642(c)-6A (Income Tax Regulations) with respect to the valuation of the remainder interest.

* * * * *

(b) * * *

(2) * * * For transactions with valuation dates after April 30, 1989, and before May 1, 2009, the mortality component tables are contained in § 20.2031-7A.

(c) * * *

(1) [Reserved]. For further guidance, see § 25.7520-1T(c)(1).

(2) __Internal Revenue Service publications containing tables with interest
rates between 2.2 and 22 percent for valuation dates after April 30, 1999, and
before May 1, 2009__. The following publications are no longer available for
purchase from the Superintendent of Documents, United States Government Printing
Office; however, they may be obtained from CC:PA:LPD:PR, Room 5205, Internal
Revenue Service, P.O.Box 7604, Ben Franklin Station, Washington, DC 20044:

* * * * *

(d) __Effective/applicability dates__. This section applies after April
30, 1989, and before May 1, 2009.

Par. 38. Section 25.7520-1T is added to read as follows:

__§ 25.7520-1T Valuation of annuities, unitrust interests, interests for
life or terms of years, and remainder or reversionary interests on or after May
1, 2009 (temporary)__.

(a) __General actuarial valuations__. (1) Except as otherwise provided in
this section and in § 25.7520-3 (relating to exceptions to the use of prescribed
tables under certain circumstances), in the case of certain gifts after April
30, 1989, the fair market value of annuities, interests for life or for a term
of years (including unitrust interests), remainders, and reversions is their
present value determined under this section. See § 20.2031-7T(d) (and, for
certain prior periods, § 20.2031-7A) for the computation of the value of
annuities, unitrust interests, life estates, terms for years, remainders, and
reversions, other than interests described in paragraphs (a)(2) and (a)(3) of
this section.

(2) In the case of a gift to a beneficiary of a pooled income fund on or after May 1, 2009, see § 1.642(c)-6T(e) (or, for certain prior periods, § 1.642(c)-6A) with respect to the valuation of the remainder interest.

(3) [Reserved]. For further guidance, see § 25.7520-1(a)(3).

(b)(1) [Reserved]. For further guidance, see § 25.7520-1(b)(1).

(2) __Mortality component__. The mortality component reflects the
mortality data most recently available from the United States census. As new
mortality data becomes available after each decennial census, the mortality
component described in this section will be revised periodically and the revised
mortality component tables will be published in the regulations at that time.
For gifts with valuation dates on or after May 1, 2009, the mortality component
table (Table 2000CM) is contained in § 20.2031-7T(d)(7). See § 20.2031-7A for
mortality component tables applicable to gifts for which the valuation date
falls before May 1, 2009.

(c) [Reserved]. For further guidance, see § 25.7520-1(c).

(1) __Regulation sections containing tables with interest rates between 0.2
and 14 percent for valuation dates on or after May 1, 2009__. Section
1.642(c)-6T(e)(6) contains Table S used for determining the present value of a
single life remainder interest in a pooled income fund as defined in §
1.642(c)-5. See § 1.642(c)-6A for single life remainder factors applicable to
valuation dates before May 1, 2009. Section 1.664-4(e)(6) contains Table F
(payout factors) and Table D (actuarial factors used in determining the present
value of a remainder interest postponed for a term of years). Section
1.664-4T(e)(7) contains Table U(1) (unitrust single life remainder factors).
These tables are used in determining the present value of a remainder interest
in a charitable remainder unitrust as defined in § 1.664-3. See § 1.664-4A for
unitrust single life remainder factors applicable to valuation dates before May
1, 2009. Section 20.2031-7(d)(6) contains Table B (actuarial factors used in
determining the present value of an interest for a term of years), Table K
(annuity end-of-interval adjustment factors), and Table J (term certain annuity
beginning-of-interval adjustment factors). Section 20.2031-7T(d)(7) contains
Table S (single life remainder factors), and Table 2000CM (mortality
components). These tables are used in determining the present value of
annuities, life estates, remainders, and reversions. See § 20.2031-7A for single
life remainder factors and mortality components applicable to valuation dates
before May 1, 2009.

(2) __Internal Revenue Service publications containing tables with interest
rates between 0.2 and 22 percent for valuation dates on or after May 1, 2009.__
The following documents are available beginning May 1, 2009, at no charge,
electronically via the IRS Internet site at www.irs.gov:

(i) Internal Revenue Service Publication 1457, "Actuarial Valuations Version 3A" (2009). This publication includes tables of valuation factors, as well as examples that show how to compute other valuation factors, for determining the present value of annuities, life estates, terms of years, remainders, and reversions, measured by one or two lives. These factors may also be used in the valuation of interests in a charitable remainder annuity trust as defined in § 1.664-2 and a pooled income fund as defined in § 1.642(c)-5.

(ii) Internal Revenue Service Publication 1458, "Actuarial Valuations Version 3B" (2009). This publication includes term certain tables and tables of one and two life valuation factors for determining the present value of remainder interests in a charitable remainder unitrust as defined in § 1.664-3.

(iii) Internal Revenue Service Publication 1459, "Actuarial Valuations Version 3C" (2009). This publication includes tables for computing depreciation adjustment factors. See § 1.170A-12T.

(d) __Effective/applicability date__. This section applies on or after May
1, 2009.

(e) __Expiration date__. This section expires on or before May 1, 2012.

Par. 39. Section 25.7520-3 is amended by revising paragraph (b)(2)(v), __
Example 5__ and paragraph (b)(4) to read as follows:

__§ 25.7520-3 Limitation on the application of section 7520__.

* * * * *

(b) * * *

(2) * * *

(v) * * *

__Example 5__. [Reserved]. For further guidance, see § 25.7520-3T(b)(2)(v)
__Example 5__.

* * * * *

(4) [Reserved]. For further guidance, see § 25.7520-3T(b)(4).

* * * * *

Par. 40. Section 25.7520-3T is added as follows:

__§ 25.7520-3T Limitation on the application of section 7520 (temporary)__.

(a) through (b)(2)(iv) [Reserved]. For further guidance, see § 25.7520-3(a) through (b)(2)(iv).

(b)(2)(v) __Examples 1__ through __4__. [Reserved]. For further
guidance, see § 25.7520-3(b)(2)(v) __Examples 1__ through __4__.

__Example 5__. __Eroding corpus in an annuity trust__. (i) The donor,
who is age 60 and in normal health, transfers property worth $1,000,000 to a
trust on or after May 1,2009. The trust will pay a 10 percent ($100,000 per
year) annuity to a charitable organization for the life of the donor, payable
annually at the end of each period, and the remainder then will be distributed
to the donor's child. The section 7520 rate for the month of the transfer is 6.8
percent. First, it is necessary to determine whether the annuity may exhaust the
corpus before all annuity payments are made. Because it is assumed that any
measuring life may survive until age 110, any life annuity could require
payments until the measuring life reaches age 110. Based on a section 7520
interest rate of 6.8 percent, the determination of whether the annuity may
exhaust the corpus before the annuity payments are made is computed as follows:

` Age to which life annuity may continue
110`

` less: Age of measuring life at date of transfer 60`

` Number of years annuity may continue 50`

` Annual annuity payment
$100,000.00`

` times: Annuity factor for 50 years`

` derived from Table B`

` (1 - .037277 / .068)
14.1577`

` Present value of term certain annuity
$1,415,770.00`

(ii) Because the present value of an annuity for a term of 50 years exceeds the
corpus, the annuity may exhaust the trust before all payments are made.
Consequently, the annuity must be valued as an annuity payable for a term of
years or until the prior death of the annuitant, with the term of years
determined by when the fund will be exhausted by the annuity payments.

(iii) The annuity factor for a term of years at 6.8 percent is derived by
subtracting the applicable remainder factor in Table B (see § 20.2031-7(d)(6))
from 1.000000 and then dividing the result by .068. An annuity of $100,000
payable at the end of each year for a period that has an annuity factor of 10.0
would have a present value exactly equal to the principal available to pay the
annuity over the term. The annuity factor for 17 years is 9.8999 and the annuity
factor for 18 years is 10.2059. Thus, it is determined that the $1,000,000
initial transfer will be sufficient to make 17 annual payments of $100,000, but
not to make the entire 18th payment. The present value of an annuity of $100,000
payable at the end of each year for 17 years certain is $100,000 times 9.8999 or
$989,990. The remaining amount is $10,010.00. Of the initial corpus amount,
$10,010.00 is not needed to make payments for 17 years, so this amount, as
accumulated for 18 years, will be available for the final payment. The 18-year
accumulation factor is (1 + 0.068)^{18} or 3.268004. Then the amount
available in 18 years is $10,010.00 times 3.268004 or $32,712.72. Therefore,for
purposes of analysis we consider the annuity payments as being composed of two
distinct annuity components. The two annuity components taken together must
equal the total annual amount of $100,000. The first annuity is the exact amount
that the trust will have available for the final payment, $32,712.72. The second
annuity component then must be $100,000 minus $32,712.72, or $67,287.28.
Specifically, the initial corpus will be able to make payments of $67,287.28 per
year for 17 years plus payments of $32,712.72 per year for 18 years. The total
annuity is valued by adding the value of the two separate temporary component
annuities.

(iv) Based on Table H of Publication 1457, Actuarial Valuations Version 3A, which may be obtained from the IRS Internet site, the present value of an annuity of $67,287.28 per year payable for 17 years or until the prior death of a person aged 60 is $597,013.12 ($67,287.28 X 8.8726). The present value of an annuity of $32,712.72 per year payable for 18 years or until the prior death of a person aged 60 is $296,887.56 ($32,712.72 X 9.0756). Thus, the present value of the charitable annuity interest is $893,900.68 ($597,013.12 + $296,887.56).

(3) [Reserved]. For further guidance, see § 25.7520-3(b)(3).

(4) __Example__. The provisions of paragraph (b)(3) of this section are
illustrated by the following example:

__Example__. __Terminal illness__. The donor transfers property worth
$1,000,000 to a child on or after May 1, 2009, in exchange for the child's
promise to pay the donor $80,000 per year for the donor's life, payable annually
at the end of each period. The donor is age 75 but has been diagnosed with an
incurable illness and has at least a 50 percent probability of dying within 1
year. The section 7520 interest rate for the month of the transfer is 7.6
percent, and the standard annuity factor at that interest rate for a person age
75 in normal health is 6.6493 (1 - .49465 / .076). Thus, if the donor were not
terminally ill, the present value of the annuity would be $531,944.00 ($80,000 X
6.6493). Assuming the presumption provided in paragraph (b)(3) of this section
does not apply, because there is at least a 50 percent probability that the
donor will die within 1 year, the standard section 7520 annuity factor may not
be used to determine the present value of the donor's annuity interest. Instead,
a special section 7520 annuity factor must be computed that takes into account
the projection of the donor's actual life expectancy.

(5) [Reserved]. For further guidance, see § 25.7520-3(b)(5).

(c) __Effective/applicability dates__. Section 25.7520-3(a) is effective
as of May 1, 1989. The provisions of paragraph (b) of this section, except __
Example 5__ in paragraph (b)(2)(v) and paragraph (b)(4), are effective with
respect to gifts made after December 13, 1995. __Example 5__ in paragraph
(b)(2)(v) and paragraph (b)(4) are effective with respect to gifts made on or
after May 1, 2009.

Par. 41. For each section listed in the table below, remove the language in the "Remove" column and add in its place the language in the "Add" column as set forth below:

` Section Remove
Add`

` § 1.170A-12(e)(2) Table 90CNSMT in
Table 2000CM in`

` following the formula § 20.2031-7
§ 20.2031-7T`

` § 1.170A-14(h)(4), May 1, 1999
May 1, 2009`

` Example 2, fourth`

` sentence`

` § 1.664-1(a)(6) §§ 1.664-4(e) and
§§ 1.664-4T(e) and`

` introductory text 1.664-4A(d) and (e)
1.664-4A`

Linda E. Stiff

Deputy Commissioner for

Services and Enforcement.

Approved: April 23, 2009

Bernard J. Knight, Jr

Acting General Counsel of the

Treasury.

(End of Ruling)

------------------------------

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