  Mar. 23, 2020

      Title 26
      Internal Revenue
      Part 1 (§§ 1.641 to 1.850)
      Revised as of April 1, 2020
      Containing a codification of documents of general applicability and future effect
      As of April 1, 2020

        Published by the Office of the Federal Register National Archives and Records Administration as a Special Edition of the Federal Register

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      Table of Contents
      Page

        Explanation
        v

        Title 26:

          Chapter I—Internal Revenue Service, Department of the Treasury (Continued)
          3

        Finding Aids:
        Table of CFR Titles and Chapters
        909
        Alphabetical List of Agencies Appearing in the CFR
        929
        Table of OMB Control Numbers
        939
        List of CFR Sections Affected
        957

      Cite this Code: CFR

      To cite the regulations in this volume use title, part and section number. Thus, 26 CFR 1.641 refers to title 26, part 1, section 641.

      Explanation
      The Code of Federal Regulations is a codification of the general and permanent rules published in the Federal Register by the Executive departments and agencies of the Federal Government. The Code is divided into 50 titles which represent broad areas subject to Federal regulation. Each title is divided into chapters which usually bear the name of the issuing agency. Each chapter is further subdivided into parts covering specific regulatory areas.
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        Title 1 through Title 16
        as of January 1
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        as of April 1
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        as of July 1
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        as of October 1

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          Office of the Federal Register

          April 1, 2020

      THIS TITLE
      Title 26—Internal Revenue is composed of twenty-two volumes. The contents of these volumes represent all current regulations issued by the Internal Revenue Service, Department of the Treasury, as of April 1, 2020. The first fifteen volumes comprise part 1 (Subchapter A—Income Tax) and are arranged by sections as follows: §§ 1.0-1.60; §§ 1.61-1.139; §§ 1.140-1.169; §§ 1.170-1.300; §§ 1.301-1.400; §§ 1.401-1.409; §§ 1.410-1.440; §§ 1.441-1.500; §§ 1.501-1.640; §§ 1.641-1.850; §§ 1.851-1.907; §§ 1.908-1.1000; §§ 1.1001-1.1400; §§ 1.1401-1.1550; and § 1.1551 to end of part 1. The sixteenth volume containing parts 2-29, includes the remainder of subchapter A and all of Subchapter B—Estate and Gift Taxes. The last six volumes contain parts 30-39 (Subchapter C—Employment Taxes and Collection of Income Tax at Source); parts 40-49; parts 50-299 (Subchapter D—Miscellaneous Excise Taxes); parts 300-499 (Subchapter F—Procedure and Administration); parts 500-599 (Subchapter G—Regulations under Tax Conventions); and part 600 to end (Subchapter H—Internal Revenue Practice).
      The OMB control numbers for title 26 appear in § 602.101 of this chapter. For the convenience of the user, § 602.101 appears in the Finding Aids section of the volumes containing parts 1 to 599.
      For this volume, Cheryl E. Sirofchuck was Chief Editor. The Code of Federal Regulations publication program is under the direction of John Hyrum Martinez, assisted by Stephen J. Frattini.

    26 CFR Ch. I (4-1-20 Edition)
    Internal Revenue Service, Treasury

        Title 26—Internal Revenue
        (This book contains part 1, §§ 1.641 to 1.850)

        Part

            chapter i—Internal Revenue Service, Department of the Treasury (Continued)
          1

          CHAPTER I—INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY (CONTINUED)

          Editorial Note:
          IRS published a document at 45 FR 6088, Jan. 25, 1980, deleting statutory sections from their regulations. In chapter I cross references to the deleted material have been changed to the corresponding sections of the IRS Code of 1954 or to the appropriate regulations sections. When either such change produced a redundancy, the cross reference has been deleted. For further explanation, see 45 FR 20795, Mar. 31, 1980.

          SUBCHAPTER A—INCOME TAX (CONTINUED)

        Part
        Page

          1
          Income taxes (Continued)
          5

          Supplementary Publications:

            Internal Revenue Service Looseleaf Regulations System.

          Additional supplementary publications are issued covering Alcohol and Tobacco Tax Regulations, and Regulations Under Tax Conventions.

        SUBCHAPTER A—INCOME TAX (CONTINUED)

          Pt. 1
          PART 1—INCOME TAXES (CONTINUED)

              Normal Taxes and Surtaxes (CONTINUED)
              ESTATES, TRUSTS, BENEFICIARIES, AND DECEDENTS

              ESTATES, TRUSTS, AND BENEFICIARIES
              General Rules For Taxation Of Estates And Trusts
              Sec.
              1.641
              [Reserved]
              1.641(a)-0
              Scope of subchapter J.
              1.641(a)-1
              Imposition of tax; application of tax.
              1.641(a)-2
              Gross income of estates and trusts.
              1.641(b)-1
              Computation and payment of tax; deductions and credits of estates and trusts.
              1.641(b)-2
              Filing of returns and payment of the tax.
              1.641(b)-3
              Termination of estates and trusts.
              1.641(c)-0
              Table of contents.
              1.641(c)-1
              Electing small business trust.
              1.642(a)(1)-1
              Partially tax-exempt interest.
              1.642(a)(2)-1
              Foreign taxes.
              1.642(a)(3)-1
              Dividends received by an estate or trust.
              1.642(a)(3)-2
              Time of receipt of dividends by beneficiary.
              1.642(a)(3)-3
              Cross reference.
              1.642(b)-1
              Deduction for personal exemption.
              1.642(c)-0
              Effective dates.
              1.642(c)-1
              Unlimited deduction for amounts paid for a charitable purpose.
              1.642(c)-2
              Unlimited deduction for amounts permanently set aside for a charitable purpose.
              1.642(c)-3
              Adjustments and other special rules for determining unlimited charitable contributions deduction.
              1.642(c)-4
              Nonexempt private foundations.
              1.642(c)-5
              Definition of pooled income fund.
              1.642(c)-6
              Valuation of a remainder interest in property transferred to a pooled income fund.
              1.642(c)-7
              Transitional rules with respect to pooled income funds.
              1.642(d)-1
              Net operating loss deduction.
              1.642(e)-1
              Depreciation and depletion.
              1.642(f)-1
              Amortization deductions.
              1.642(g)-1
              Disallowance of double deductions; in general.
              1.642(g)-2
              Deductions included.
              1.642(h)-1
              Unused loss carryovers on termination of an estate or trust.
              1.642(h)-2
              Excess deductions on termination of an estate or trust.
              1.642(h)-3
              Meaning of “beneficiaries succeeding to the property of the estate or trust”.
              1.642(h)-4
              Allocation.
              1.642(h)-5
              Example.
              1.642(i)-1
              Certain distributions by cemetery perpetual care funds.
              1.642(i)-2
              Definitions.
              1.643(a)-0
              Distributable net income; deduction for distributions; in general.
              1.643(a)-1
              Deduction for distributions.
              1.643(a)-2
              Deduction for personal exemption.
              1.643(a)-3
              Capital gains and losses.
              1.643(a)-4
              Extraordinary dividends and taxable stock dividends.
              1.643(a)-5
              Tax-exempt interest.
              1.643(a)-6
              Income of foreign trust.
              1.643(a)-7
              Dividends.
              1.643(a)-8
              Certain distributions by charitable remainder trusts.
              1.643(b)-1
              Definition of income.
              1.643(b)-2
              Dividends allocated to corpus.
              1.643(c)-1
              Definition of “beneficiary”.
              1.643(d)-1
              Definition of “foreign trust created by a United States person”.
              1.643(d)-2
              Illustration of the provisions of section 643.
              1.643(f)-1
              Treatment of multiple trusts.
              1.643(h)-1
              Distributions by certain foreign trusts through intermediaries.

              pooled income fund actuarial tables applicable before may 1, 2009
              1.642(c)-6A
              Valuation of charitable remainder interests for which the valuation date is before May 1, 2009.

              Election to treat trust as part of an estate
              1.645-1
              Election by certain revocable trusts to be treated as part of estate.

              Trusts which distribute current income only
              1.651(a)-1
              Simple trusts; deduction for distributions; in general.
              1.651(a)-2
              Income required to be distributed currently.
              1.651(a)-3
              Distribution of amounts other than income.
              1.651(a)-4
              Charitable purposes.
              1.651(a)-5
              Estates.
              1.651(b)-1
              Deduction for distributions to beneficiaries.
              1.652(a)-1
              Simple trusts; inclusion of amounts in income of beneficiaries.
              1.652(a)-2
              Distributions in excess of distributable net income.
              1.652(b)-1
              Character of amounts.
              1.652(b)-2
              Allocation of income items.
              1.652(b)-3
              Allocation of deductions.
              1.652(c)-1
              Different taxable years.
              1.652(c)-2
              Death of individual beneficiaries.
              1.652(c)-3

              Termination of existence of other beneficiaries.

              1.652(c)-4
              Illustration of the provisions of sections 651 and 652.

              estates and trusts which may accumulate income or which distribute corpus
              1.661(a)-1
              Estates and trusts accumulating income or distributing corpus; general.
              1.661(a)-2
              Deduction for distributions to beneficiaries.
              1.661(b)-1
              Character of amounts distributed; in general.
              1.661(b)-2
              Character of amounts distributed when charitable contributions are made.
              1.661(c)-1
              Limitation on deduction.
              1.661(c)-2
              Illustration of the provisions of section 661.
              1.662(a)-1
              Inclusion of amounts in gross income of beneficiaries of estates and complex trusts; general.
              1.662(a)-2
              Currently distributable income.
              1.662(a)-3
              Other amounts distributed.
              1.662(a)-4
              Amounts used in discharge of a legal obligation.
              1.662(b)-1
              Character of amounts; when no charitable contributions are made.
              1.662(b)-2
              Character of amounts; when charitable contributions are made.
              1.662(c)-1
              Different taxable years.
              1.662(c)-2
              Death of individual beneficiary.
              1.662(c)-3
              Termination of existence of other beneficiaries.
              1.662(c)-4
              Illustration of the provisions of sections 661 and 662.
              1.663(a)-1
              Special rules applicable to sections 661 and 662; exclusions; gifts, bequests, etc.
              1.663(a)-2
              Charitable, etc., distributions.
              1.663(a)-3
              Denial of double deduction.
              1.663(b)-1
              Distributions in first 65 days of taxable year; scope.
              1.663(b)-2
              Election.
              1.663(c)-1
              Separate shares treated as separate trusts or as separate estates; in general.
              1.663(c)-2
              Rules of administration.
              1.663(c)-3
              Applicability of separate share rule to certain trusts.
              1.663(c)-4
              Applicability of separate share rule to estates and qualified revocable trusts.
              1.663(c)-5
              Examples.
              1.663(c)-6
              Effective dates.
              1.664-1
              Charitable remainder trusts.
              1.664-2
              Charitable remainder annuity trust.
              1.664-3
              Charitable remainder unitrust.
              1.664-4
              Calculation of the fair market value of the remainder interest in a charitable remainder unitrust.

              treatment of excess distributions by trusts applicable to taxable years beginning before January 1, 1969
              1.665(a)-0
              Excess distributions by trusts; scope of subpart D.
              1.665(a)-1
              Undistributed net income.
              1.665(b)-1
              Accumulation distributions of trusts other than certain foreign trusts; in general.
              1.665(b)-2
              Exclusions from accumulation distributions in the case of trusts (other than a foreign trust created by a U.S. person).
              1.665(b)-3
              Exclusions under section 663(a) (1).
              1.665(c)-1
              Accumulation distributions of certain foreign trusts; in general.
              1.665(c)-2
              Indirect payments to the beneficiary.
              1.665(d)-1
              Taxes imposed on the trust.
              1.665(e)-1
              Preceding taxable year.
              1.665(e)-2
              Application of separate share rule.
              1.666(a)-1A
              Amount allocated.
              1.666(b)-1A
              Total taxes deemed distributed.
              1.666(c)-1A
              Pro rata portion of taxes deemed distributed.
              1.666(c)-2A
              Illustration of the provisions of section 666 (a), (b), and (c).
              1.666(d)-1A
              Information required from trusts.
              1.666(a)-1
              Amount allocated.
              1.666(b)-1
              Total taxes deemed distributed.
              1.666(c)-1
              Pro rata portion of taxes deemed distributed.
              1.666(c)-2
              Illustration of the provisions of section 666.
              1.667-1
              Denial of refund to trusts.
              1.667(a)-1A
              [Reserved]
              1.667(b)-1A
              Authorization of credit to beneficiary for taxes imposed on the trust.
              1.668(a)-1A
              Amounts treated as received in prior taxable years; inclusion in gross income.
              1.668(a)-2A
              Allocation among beneficiaries; in general.
              1.668(a)-3A
              Determination of tax.
              1.668(b)-1A
              Tax on distribution.
              1.668(b)-2A
              Special rules applicable to section 668.
              1.668(b)-3A
              Computation of the beneficiary's income and tax for a prior taxable year.
              1.668(b)-4A
              Information requirements with respect to beneficiary.
              1.668(a)-1
              Amounts treated as received in prior taxable years; inclusion in gross income.
              1.668(a)-2
              Allocation among beneficiaries; in general.
              1.668(a)-3
              Excluded amounts.
              1.668(a)-4
              Tax attributable to throwback.
              1.668(b)-1
              Credit for taxes paid by the trust.
              1.668(b)-2
              Illustration of the provisions of subpart D.
              1.669(a)-1
              Limitation on tax.
              1.669(a)-2
              Rules applicable to section 669 computations.
              1.669(a)-3
              Tax computed by the exact throwback method.
              1.669(a)-4
              Tax attributable to short-cut throwback method.
              1.669(b)-1
              Information requirements.
              1.669(b)-2
              Manner of exercising election.

              unitrust actuarial tables applicable before may 1, 2009
              1.664-4A
              Valuation of charitable remainder interests for which the valuation date is before May 1, 2009.

              treatment of excess distributions of trusts applicable to taxable years beginning on or after January 1, 1969
              1.665(a)-0A
              Excess distributions by trusts; scope of subpart D.
              1.665(a)-1A
              Undistributed net income.
              1.665(b)-1A
              Accumulation distributions.
              1.665(b)-2A
              Special rules for accumulation distributions made in taxable years beginning before January 1, 1974.
              1.665(c)-1A
              Special rule applicable to distributions by certain foreign trusts.
              1.665(d)-1A
              Taxes imposed on the trust.
              1.665(e)-1A
              Preceding taxable year.
              1.665(f)-1A
              [Reserved]
              1.665(g)-1A
              [Reserved]
              1.665(g)-2A
              Application of separate share rule.

              grantors and others treated as substantial owners
              1.671-1
              Grantors and others treated as substantial owners; scope.
              1.671-2
              Applicable principles.
              1.671-3
              Attribution or inclusion of income, deductions, and credits against tax.
              1.671-4
              Method of reporting.
              1.671-5
              Reporting for widely held fixed investment trusts.
              1.672(a)-1
              Definition of adverse party.
              1.672(b)-1
              Nonadverse party.
              1.672(c)-1
              Related or subordinate party.
              1.672(d)-1
              Power subject to condition precedent.
              1.672(f)-1
              Foreign persons not treated as owners.
              1.672(f)-2
              Certain foreign corporations.
              1.672(f)-3
              Exceptions to general rule.
              1.672(f)-4
              Recharacterization of purported gifts.
              1.672(f)-5
              Special rules.
              1.673(a)-1
              Reversionary interests; income payable to beneficiaries other than certain charitable organizations; general rule.
              1.673(b)-1
              Income payable to charitable beneficiaries (before amendment by Tax Reform Act of 1969).
              1.673(c)-1
              Reversionary interest after income beneficiary's death.
              1.673(d)-1
              Postponement of date specified for reacquisition.
              1.674(a)-1
              Power to control beneficial enjoyment; scope of section 674.
              1.674(b)-1
              Excepted powers exercisable by any person.
              1.674(c)-1
              Excepted powers exercisable only by independent trustees.
              1.674(d)-1
              Excepted powers exercisable by any trustee other than grantor or spouse.
              1.674(d)-2
              Limitations on exceptions in section 674 (b), (c), and (d).
              1.675-1
              Administrative powers.
              1.676(a)-1
              Power to revest title to portion of trust property in grantor; general rule.
              1.676(b)-1
              Powers exercisable only after a period of time.
              1.677(a)-1
              Income for benefit of grantor; general rule.
              1.677(b)-1
              Trusts for support.
              1.678(a)-1
              Person other than grantor treated as substantial owner; general rule.
              1.678(b)-1
              If grantor is treated as the owner.
              1.678(c)-1
              Trusts for support.
              1.678(d)-1
              Renunciation of power.
              1.679-0
              Outline of major topics.
              1.679-1
              U.S. transferor treated as owner of foreign trust.
              1.679-2
              Trusts treated as having a U.S. beneficiary.
              1.679-3
              Transfers.
              1.679-4
              Exceptions to general rule.
              1.679-5
              Pre-immigration trusts.
              1.679-6
              Outbound migrations of domestic trusts.
              1.679-7
              Effective dates.

              miscellaneous
              1.681(a)-1
              Limitation on charitable contributions deductions of trusts; scope of section 681.
              1.681(a)-2
              Limitation on charitable contributions deduction of trusts with trade or business income.
              1.681(b)-1
              Cross reference.
              1.682(a)-1
              Income of trust in case of divorce, etc.
              1.682(b)-1
              Application of trust rules to alimony payments.
              1.682(c)-1
              Definitions.
              1.683-1
              Applicability of provisions; general rule.
              1.683-2
              Exceptions.
              1.683-3
              Application of the 65-day rule of the Internal Revenue Code of 1939.
              1.684-1
              Recognition of gain on transfers to certain foreign trusts and estates.
              1.684-2
              Transfers.
              1.684-3
              Exceptions to general rule of gain recognition.
              1.684-4
              Outbound migrations of domestic trusts.
              1.684-5
              Effective/applicability dates.
              Income in Respect of Decedents
              1.691(a)-1
              Income in respect of a decedent.
              1.691(a)-2
              Inclusion in gross income by recipients.
              1.691(a)-3
              Character of gross income.
              1.691(a)-4
              Transfer of right to income in respect of a decedent.
              1.691(a)-5
              Installment obligations acquired from decedent.
              1.691(b)-1

              Allowance of deductions and credit in respect to decedents.

              1.691(c)-1
              Deduction for estate tax attributable to income in respect of a decedent.
              1.691(c)-2
              Estates and trusts.
              1.691(d)-1
              Amounts received by surviving annuitant under joint and survivor annuity contract.
              1.691(e)-1
              Installment obligations transmitted at death when prior law applied.
              1.691(f)-1
              Cross reference.
              1.692-1
              Abatement of income taxes of certain members of the Armed Forces of the United States upon death.

              PARTNERS AND PARTNERSHIPS
              Determination of Tax Liability
              1.701-1
              Partners, not partnership, subject to tax.
              1.701-2
              Anti-abuse rule.
              1.702-1
              Income and credits of partner.
              1.702-2
              Net operating loss deduction of partner.
              1.702-3T
              4-Year spread (temporary).
              1.703-1
              Partnership computations.
              1.704-1
              Partner's distributive share.
              1.704-1T
              Partner's distributive share (temporary).
              1.704-2
              Allocations attributable to nonrecourse liabilities.
              1.704-3
              Contributed property.
              1.704-4
              Distribution of contributed property.
              1.705-1
              Determination of basis of partner's interest.
              1.705-2
              Basis adjustments coordinating sections 705 and 1032.
              1.706-0
              Table of contents.
              1.706-1
              Taxable years of partner and partnership.
              1.706-2
              Certain allocable cash to as is items. [Reserved]
              1.706-2T
              Temporary regulations; question and answer under the Tax Reform Act of 1984.
              1.706-3
              Items attributable to interest in lower tier partnership. [Reserved]
              1.706-4
              Determination of distributive share when a partner's interest varies.
              1.706-5
              Taxable year determination.
              1.707-0
              Table of contents.
              1.707-1
              Transactions between partner and partnership.
              1.707-2
              Disguised payments for services. [Reserved]
              1.707-3
              Disguised sales of property to partnership; general rules.
              1.707-4
              Disguised sales of property to partnership; special rules applicable to guaranteed payments, preferred returns, operating cash flow distributions, and reimbursements of preformation expenditures.
              1.707-5
              Disguised sales of property to partnership; special rules relating to liabilities.
              1.707-6
              Disguised sales of property by partnership to partner; general rules.
              1.707-7
              Disguised sales of partnership interests. [Reserved]
              1.707-8
              Disclosure of certain information.
              1.707-9
              Effective dates and transitional rules.
              1.708-1
              Continuation of partnership.
              1.709-1
              Treatment of organization and syndication costs.
              1.709-2
              Definitions.

              Contributions, Distributions, and Transfers

              contributions to a partnership
              1.721-1
              Nonrecognition of gain or loss on contribution.
              1.721(c)-1
              Overview, definitions, and rules of general application.
              1.721(c)-2
              Recognition of gain on certain contributions of property to partnerships with related foreign partners.
              1.721(c)-3
              Gain deferral method.
              1.721(c)-4
              Acceleration events.
              1.721(c)-5
              Acceleration event exceptions.
              1.721(c)-6
              Procedural and reporting requirements.
              1.721(c)-7
              Examples.
              1.721-2
              Noncompensatory options.
              1.722-1
              Basis of contributing partner's interest.
              1.723-1
              Basis of property contributed to partnership.

              distributions by a partnership
              1.731-1
              Extent of recognition of gain or loss on distribution.
              1.731-2
              Partnership distributions of marketable securities.
              1.732-1
              Basis of distributed property other than money.
              1.732-2
              Special partnership basis of distributed property.
              1.732-3
              Corresponding adjustment to basis of assets of a distributed corporation controlled by a corporate partner.
              1.733-1
              Basis of distributee partner's interest.
              1.734-1
              Optional adjustment to basis of undistributed partnership property.
              1.734-2
              Adjustment after distribution to transferee partner.
              1.735-1
              Character of gain or loss on disposition of distributed property.
              1.736-1
              Payments to a retiring partner or a deceased partner's successor in interest.
              1.737-1
              Recognition of precontribution gain.
              1.737-2
              Exceptions and special rules.
              1.737-3
              Basis adjustments; recovery rules.
              1.737-4
              Anti-abuse rule.
              1.737-5
              Effective dates.

              transfers of interests in a partnership
              1.741-1

              Recognition and character of gain or loss on sale or exchange.

              1.742-1
              Basis of transferee partner's interest.
              1.743-1
              Optional adjustment to basis of partnership property.

              provisions common to part ii, subchapter k, chapter 1 of the code
              1.751-1
              Unrealized receivables and inventory items.
              1.752-0
              Table of contents.
              1.752-1
              Treatment of partnership liabilities.
              1.752-2
              Partner's share of resource liabilities.
              1.752-2T
              Partner's share of resource liabilities (temporary).
              1.752-3
              Partner's share of nonrecourse liabilities.
              1.752-4
              Special rules.
              1.752-5
              Effective dates and transition rules.
              1.752-6
              Partnership assumption of partner's section 358(h)(3) liability after October 18, 1999, and before June 24, 2003.
              1.752-7
              Partnership assumption of partner's § 1.752-7 liability on or after June 24, 2003.
              1.753-1
              Partner receiving income in respect of decedent.
              1.754-1
              Time and manner of making election to adjust basis of partnership property.
              1.755-1
              Rules for allocation of basis.

              definitions
              1.761-1
              Terms defined.
              1.761-2
              Exclusion of certain unincorporated organizations from the application of all or part of subchapter K of chapter 1 of the Internal Revenue Code.
              1.761-3
              Certain option holders treated as partners.

              effective date for subchapter k, chapter 1 of the code
              1.771-1
              Effective date.
              INSURANCE COMPANIES

              Life Insurance Companies

              definition; tax imposed
              1.801-1
              Definitions.
              1.801-2
              Taxable years affected.
              1.801-3
              Definitions.
              1.801-4
              Life insurance reserves.
              1.801-5
              Total reserves.
              1.801-6
              Adjustments in reserves for policy loans.
              1.801-7
              Variable annuities.
              1.801-8
              Contracts with reserves based on segregated asset accounts.
              1.802(b)-1
              [Reserved]
              1.802-2
              [Reserved]
              1.802-3
              Tax imposed on life insurance companies.

              investment income
              1.804-3
              Gross investment income of a life insurance company.
              1.804-4
              Investment yield of a life insurance company.
              1.806-1
              [Reserved]
              1.806-2
              [Reserved]
              1.806-3
              Certain changes in reserves and assets.
              1.806-4
              Change of basis in computing reserves.
              1.807-1
              Mortality and morbidity tables.
              1.807-2
              Cross-reference.

              gain and loss from operations
              1.809-1
              [Reserved]
              1.809-2
              Exclusion of share of investment yield set aside for policyholders.
              1.809-3
              [Reserved]
              1.809-4
              Gross amount.
              1.809-5
              Deductions.
              1.809-6
              Modifications.
              1.810-1
              [Reserved]
              1.810-2
              Rules for certain reserves.
              1.810-3
              Adjustment for change in computing reserves.
              1.811-1
              Taxable years affected.
              1.811-2
              Dividends to policyholders.
              1.811-3
              Cross-reference.
              1.812-1
              Taxable years affected.
              1.812-2
              Operations loss deduction.
              1.812-3
              Computation of loss from operations.
              1.812-4
              Operations loss carrybacks and operations loss carryovers.
              1.812-5
              Offset.
              1.812-6
              New company defined.
              1.812-7
              Application of subtitle A and subtitle F.
              1.812-8
              Illustration of operations loss carrybacks and carryovers.
              1.812-9
              Cross-reference.

              distributions to shareholders
              1.815-1
              Taxable years affected.
              1.815-2
              Distributions to shareholders.
              1.815-3
              Shareholders surplus account.
              1.815-4
              Policyholders surplus account.
              1.815-5
              Other accounts defined.
              1.815-6
              Special rules.

              miscellaneous provisions
              1.817-1
              Taxable years affected.
              1.817-2
              Treatment of capital gains and losses.
              1.817-3
              Gain on property held on December 31, 1958, and certain substituted property acquired after 1958.
              1.817-4
              Special rules.
              1.817-5
              Diversification requirements for variable annuity, endowment, and life insurance contracts.
              1.817A-0
              Table of contents.
              1.817A-1
              Certain modified guaranteed contracts.
              1.818-1
              Taxable years affected.
              1.818-2
              Accounting provisions.
              1.818-3

              Amortization of premium and accrual of discount.

              1.818-4
              Election with respect to life insurance reserves computed on preliminary term basis.
              1.818-5
              Short taxable years.
              1.818-6
              Transitional rule for change in method of accounting.
              1.818-7
              Denial of double deductions.
              1.818-8
              Special rules relating to consolidated returns and certain capital losses.
              1.819-1
              Taxable years affected.
              1.819-2
              Foreign life insurance companies.

              Mutual Insurance Companies (Other Than Life and Certain Marine Insurance Companies and Other Than Fire or Flood Insurance Companies Which Operate on Basis of Perpetual Policies or Premium Deposits)
              1.822-3
              Amortization of premium and accrual of discount.
              1.822-4
              Taxable years affected.
              1.822-5
              Mutual insurance company taxable income.
              1.822-6
              Real estate owned and occupied.
              1.822-7
              Amortization of premium and accrual of discount.
              1.822-8
              Determination of taxable investment income.
              1.822-9
              Real estate owned and occupied.
              1.822-10
              Amortization of premium and accrual of discount.
              1.822-11
              Net premiums.
              1.822-12
              Dividends to policyholders.
              1.826-1
              Election by reciprocal underwriters and interinsurers.
              1.826-2
              Special rules applicable to electing reciprocals.
              1.826-3
              Attorney-in-fact of electing reciprocals.
              1.826-4
              Allocation of expenses.
              1.826-5
              Attribution of tax.
              1.826-6
              Credit or refund.
              1.826-7
              Examples.

              Other Insurance Companies
              1.831-1
              Tax on insurance companies (other than life or mutual), mutual marine insurance companies, and mutual fire insurance companies issuing perpetual policies.
              1.831-2
              Taxable years affected.
              1.831-3
              Tax on insurance companies (other than life or mutual), mutual marine insurance companies, mutual fire insurance companies issuing perpetual policies, and mutual fire or flood insurance companies operating on the basis of premium deposits; taxable years beginning after December 31, 1962.
              1.832-1
              Gross income.
              1.832-2
              Deductions.
              1.832-3
              Taxable years affected.
              1.832-4
              Gross income.
              1.832-5
              Deductions.
              1.832-6
              Policyholders of mutual fire or flood insurance companies operating on the basis of premium deposits.
              1.833-1
              Medical loss ratio under section 833(c)(5).
              1.846-1
              Application of discount factors.
              1.848-0
              Outline of regulations under section 848.
              1.848-1
              Definitions and special provisions.
              1.848-2
              Determination of net premiums.
              1.848-3
              Interim rules for certain reinsurance agreements.
              1.849-1.850
              [Reserved]

            Authority:
            26 U.S.C. 7805, unless otherwise noted.
            Section 1.642(c)-6 also issued under 26 U.S.C. 642(c)(5).
            Section 1.643(a)-8 also issued under 26 U.S.C. 643(a)(7).
            Section 1.643(f)-1 also issued under 26 U.S.C. 643(f).
            Section 1.643(h)-1 also issued under 26 U.S.C. 643(a)(7).
            Section 1.642(c)-6A also issued under 26 U.S.C. 642(c)(5).
            Section 1.645-1 also issued under 26 U.S.C. 645.
            Sections 1.663(c)-1, 1.663(c)-2, 1.663(c)-3, 1.663(c)-4, 1.663(c)-5, and 1.663(c)-6 also issued under 26 U.S.C. 663(c).
            Section 1.664-1 also issued under 26 U.S.C. 664(a).
            Section 1.664-2 also issued under 26 U.S.C. 664(a).
            Section 1.664-3 also issued under 26 U.S.C. 664(a).
            Section 1.664-4 also issued under 26 U.S.C. 664(a).
            Section 1.664-4A also issued under 26 U.S.C. 664(a).
            Section 1.671-2 also issued under 26 U.S.C. 643(a)(7) and 672(f)(6).
            Section 1.672(f)-1 also issued under 26 U.S.C. 643(a)(7) and 672(f)(6).
            Section 1.672(f)-2 also issued under 26 U.S.C. 643(a)(7) and 672(f)(3) and (6).
            Section 1.672(f)-3 also issued under 26 U.S.C. 643(a)(7) and 672(f)(2) and (6).
            Section 1.672(f)-4 also issued under 26 U.S.C. 643(a)(7) and 672(f)(4) and (6).
            Section 1.672(f)-5 also issued under 26 U.S.C. 643(a)(7) and 672(f)(6).
            Section 1.679-1 also issued under 26 U.S.C. 643(a)(7) and 679(d).
            Section 1.679-2 also issued under 26 U.S.C. 643(a)(7) and 679(d).
            Section 1.679-3 also issued under 26 U.S.C. 643(a)(7) and 679(d).
            Section 1.679-4 also issued under 26 U.S.C. 643(a)(7), 679(a)(3) and 679(d).
            Section 1.679-5 also issued under 26 U.S.C. 643(a)(7) and 679(d).
            Section 1.679-6 also issued under 26 U.S.C. 643(a)(7) and 679(d).
            Section 1.684-1 also issued under 26 U.S.C. 643(a)(7) and 684(a).
            Section 1.684-2 also issued under 26 U.S.C. 643(a)(7) and 684(a).

            Section 1.684-3 also issued under 26 U.S.C. 643(a)(7) and 684(a).

            Section 1.684-4 also issued under 26 U.S.C. 643(a)(7) and 684(a).
            Section 1.684-5 also issued under 26 U.S.C. 643(a)(7) and 684(a).
            Section 1.701-2 also issued under 26 U.S.C. 701 through 761.
            Section 1.704-3 also issued under 26 U.S.C. 704(c).
            Section 1.704-4 also issued under 26 U.S.C. 704(c).
            Section 1.705-2 also issued under 26 U.S.C. 705 and 1032.
            Section 1.706-1T also issued under 26 U.S.C. 706(b).
            Section 1.706-3T also issued under 26 U.S.C. 444(f).
            Section 1.706-4 also issued under 26 U.S.C. 706(d).
            Sections 1.707-2 through 1.707-9 also issued under 26 U.S.C. 707(a)(2).
            Section 1.721-1 also issued under 26 U.S.C. 721.
            Section 1.721(c)-1 also issued under 26 U.S.C. 721(c).
            Section 1.721(c)-2 also issued under 26 U.S.C. 721(c).
            Section 1.721(c)-3 also issued under 26 U.S.C. 721(c).
            Section 1.721(c)-4 also issued under 26 U.S.C. 721(c).
            Section 1.721(c)-5 also issued under 26 U.S.C. 721(c).
            Section 1.721(c)-6 also issued under 26 U.S.C. 721(c).
            Section 1.721(c)-7 also issued under 26 U.S.C. 721(c).
            Section 1.731-2 also issued under 26 U.S.C. 731(c).
            Section 1.732-1 also issued under 26 U.S.C. 732.
            Section 1.732-2 also issued under 26 U.S.C. 732.
            Section 1.732-3 also issued under 26 U.S.C. 337(d), 732(f)(8), and 1502.
            Section 1.734-1 also issued under 26 U.S.C. 734.
            Section 1.743-1 also issued under 26 U.S.C. 743.
            Section 1.751-1 also issued under 26 U.S.C. 751.
            Section 1.752-1(a) also issued under Public Law 106-554, 114 Stat. 2763, 2763A-638 (2001).
            Section 1.752-6 also issued under Public Law 106-554, 114 Stat. 2763, 2763A-638 (2001).
            Section 1.752-7 also issued under Public Law 106-554, 114 Stat. 2763, 2763A-638 (2001).
            Section 1.755-1 also issued under 26 U.S.C. 755.
            Section 1.755-2 also issued under 26 U.S.C. 755 and 26 U.S.C. 1060.
            Section 1.761-2 also issued under 26 U.S.C. 446(b) and 26 U.S.C. 761(a).
            Section 1.807-2 also issued under 26 U.S.C. 817A(e).
            Section 1.809-10 also issued under 26 U.S.C. 809(b)(2) and (g)(3).
            Section 1.811-3 also issued under 26 U.S.C. 817A(e).
            Section 1.812-9 also issued under 26 U.S.C. 817A(e).
            Section 1.817-5 also issued under 26 U.S.C. 817(h).
            Section 1.817A-1 also issued under 26 U.S.C. 817A(e).
            Section 1.832-4 also issued under 26 U.S.C. 832(b)(5)(A).
            Section 1.846-1 also issued under 26 U.S.C. 846.
            Section 1.848-2 also issued under 26 U.S.C. 845(b) and 26 U.S.C. 848(d)(4)(B).
            Section 1.848-3 also issued under 26 U.S.C. 848(d)(4)(B).

            Source:
            T.D. 6500, 25 FR 11814, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960, unless otherwise noted.

            ESTATES, TRUSTS, BENEFICIARIES, AND DECEDENTS

            Estates, Trusts, and Beneficiaries
            General Rules for Taxation of Estates and Trusts

              § 1.641
              [Reserved]

              § 1.641(a)-0
              Scope of subchapter J.
              (a) In general. Subchapter J (sections 641 and following), chapter 1 of the Code, deals with the taxation of income of estates and trusts and their beneficiaries, and of income in respect of decedents. Part I of subchapter J contains general rules for taxation of estates and trusts (subpart A), specific rules relating to trusts which distribute current income only (subpart B), estates and trusts which may accumulate income or which distribute corpus (subpart C), treatment of excess distributions by trusts (subpart D), grantors and other persons treated as substantial owners (subpart E), and miscellaneous provisions relating to limitations on charitable deductions, income of an estate or trust in case of divorce, and taxable years to which the provisions of subchapter J are applicable (subpart F). Part I has no application to any organization which is not to be classified for tax purposes as a trust under the classification rules of §§ 301.7701-2, 301.7701-3, and 301.7701-4 of this chapter (Regulations on Procedure and Administration). Part II of subchapter J relates to the treatment of income in respect of decedents. However, the provisions of subchapter J do not apply to employee trusts subject to subchapters D and F, chapter 1 of the Code, and common trust funds subject to subchapter H, chapter 1 of the Code.
              (b) Scope of subparts A, B, C, and D. Subparts A, B, C, and D (section 641 and following), part I, subchapter J, chapter 1 of the Code, relate to the taxation of estates and trusts and their beneficiaries. These subparts have no application to any portion of the corpus or income of a trust which is to be regarded, within the meaning of the Code, as that of the grantor or others treated as its substantial owners. See subpart E (section 671 and following), Part I, subchapter J, chapter 1 of the Code, and the regulations thereunder for rules for the treatment of any portion of a trust where the grantor (or another person) is treated as the substantial owner. So-called alimony trusts are treated under subparts A, B, C, and D, except to the extent otherwise provided in section 71 or section 682. These subparts have no application to beneficiaries of nonexempt employees' trusts. See section 402(b) and the regulations thereunder.
              (c) Multiple trusts. Multiple trusts that have:
              (1) No substantially independent purposes (such as independent dispositive purposes),
              (2) The same grantor and substantially the same beneficiary, and
              (3) The avoidance or mitigation of (i) the progressive rates of tax (including mitigation as a result of deferral of tax) or (ii) the minimum tax for tax preferences imposed by section 56 as their principal purpose,
              shall be consolidated and treated as one trust for the purposes of subchapter J.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6989, 34 FR 731, Jan. 17, 1969; T.D. 7204, 37 FR 17158, Aug. 25, 1972]

              § 1.641(a)-1
              Imposition of tax; application of tax.
              For taxable years beginning after December 31, 1970, section 641 prescribes that the taxes imposed by section 1(d), as amended by the Tax Reform Act of 1969, shall apply to the income of estates or of any kind of property held in trust. For taxable years ending before January 1, 1971, section 641 prescribes that the taxes imposed upon individuals by chapter 1 of the Code apply to the income of estates or of any kind of property held in trust. The rates of tax, the statutory provisions respecting gross income, and, with certain exceptions, the deductions and credits allowed to individuals apply also to estates and trust.
              [T.D. 7117, 36 FR 9421, May 25, 1971]

              § 1.641(a)-2
              Gross income of estates and trusts.
              The gross income of an estate or trust is determined in the same manner as that of an individual. Thus, the gross income of an estate or trust consists of all items of gross income received during the taxable year, including:
              (a) Income accumulated in trust for the benefit of unborn or unascertained persons or persons with contingent interests;
              (b) Income accumulated or held for future distribution under the terms of the will or trust;
              (c) Income which is to be distributed currently by the fiduciary to the beneficiaries, and income collected by a guardian of an infant which is to be held or distributed as the court may direct;
              (d) Income received by estates of deceased persons during the period of administration or settlement of the estate; and
              (e) Income which, in the discretion of the fiduciary, may be either distributed to the beneficiaries or accumulated. The several classes of income enumerated in this section do not exclude others which also may come within the general purposes of section 641.

              § 1.641(b)-1
              Computation and payment of tax; deductions and credits of estates and trusts.

              Generally, the deductions and credits allowed to individuals are also allowed to estates and trusts. However, there are special rules for the computation of certain deductions and for the allocation between the estate or trust and the beneficiaries of certain credits and deductions. See section 642 and the regulations thereunder. In addition, an estate or trust is allowed to deduct, in computing its taxable income, the deductions provided by sections 651 and 661 and regulations thereunder, relating to distributions to beneficiaries.

              § 1.641(b)-2
              Filing of returns and payment of the tax.
              (a) The fiduciary is required to make and file the return and pay the tax on the taxable income of an estate or of a trust. Liability for the payment of the tax on the taxable income of an estate attaches to the person of the executor or administrator up to and after his discharge if, prior to distribution and discharge, he had notice of his tax obligations or failed to exercise due diligence in ascertaining whether or not such obligations existed. For the extent of such liability, see section 3467 of the Revised Statutes, as amended by section 518 of the Revenue Act of 1934 (31 U. S. C. 192). Liability for the tax also follows the assets of the estate distributed to heirs, devisees, legatees, and distributees, who may be required to discharge the amount of the tax due and unpaid to the extent of the distributive shares received by them. See section 6901. The same considerations apply to trusts.
              (b) The estate of an infant, incompetent, or other person under a disability, or, in general, of an individual or corporation in receivership or a corporation in bankruptcy is not a taxable entity separate from the person for whom the fiduciary is acting, in that respect differing from the estate of a deceased person or of a trust. See section 6012(b) (2) and (3) for provisions relating to the obligation of the fiduciary with respect to returns of such persons.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6580, 26 FR 11486, Dec. 5, 1961]

              § 1.641(b)-3
              Termination of estates and trusts.
              (a) The income of an estate of a deceased person is that which is received by the estate during the period of administration or settlement. The period of administration or settlement is the period actually required by the administrator or executor to perform the ordinary duties of administration, such as the collection of assets and the payment of debts, taxes, legacies, and bequests, whether the period required is longer or shorter than the period specified under the applicable local law for the settlement of estates. For example, where an executor who is also named as trustee under a will fails to obtain his discharge as executor, the period of administration continues only until the duties of administration are complete and he actually assumes his duties as trustee, whether or not pursuant to a court order. However, the period of administration of an estate cannot be unduly prolonged. If the administration of an estate is unreasonably prolonged, the estate is considered terminated for Federal income tax purposes after the expiration of a reasonable period for the performance by the executor of all the duties of administration. Further, an estate will be considered as terminated when all the assets have been distributed except for a reasonable amount which is set aside in good faith for the payment of unascertained or contingent liabilities and expenses (not including a claim by a beneficiary in the capacity of beneficiary). Notwithstanding the above, if the estate has joined in making a valid election under section 645 to treat a qualified revocable trust, as defined under section 645(b)(1), as part of the estate, the estate shall not terminate under this paragraph prior to the termination of the section 645 election period. See section 645 and the regulations thereunder for rules regarding the termination of the section 645 election period.

              (b) Generally, the determination of whether a trust has terminated depends upon whether the property held in trust has been distributed to the persons entitled to succeed to the property upon termination of the trust rather than upon the technicality of whether or not the trustee has rendered his final accounting. A trust does not automatically terminate upon the happening of the event by which the duration of the trust is measured. A reasonable time is permitted after such event for the trustee to perform the duties necessary to complete the administration of the trust. Thus, if under the terms of the governing instrument, the trust is to terminate upon the death of the life beneficiary and the corpus is to be distributed to the remainderman, the trust continues after the death of the life beneficiary for a period reasonably necessary to a proper winding up of the affairs of the trust. However, the winding up of a trust cannot be unduly postponed and if the distribution of the trust corpus is unreasonably delayed, the trust is considered terminated for Federal income tax purposes after the expiration of a reasonable period for the trustee to complete the administration of the trust. Further, a trust will be considered as terminated when all the assets have been distributed except for a reasonable amount which is set aside in good faith for the payment of unascertained or contingent liabilities and expenses (not including a claim by a beneficiary in the capacity of beneficiary).

              (c)(1) Except as provided in subparagraph (2) of this paragraph, during the period between the occurrence of an event which causes a trust to terminate and the time when the trust is considered as terminated under this section, whether or not the income and the excess of capital gains over capital losses of the trust are to be considered as amounts required to be distributed currently to the ultimate distributee for the year in which they are received depends upon the principles stated in § 1.651(a)-2. See § 1.663-1 et seq. for application of the separate share rule.
              (2)(i) Except in cases to which the last sentence of this subdivision applies, for taxable years of a trust ending before September 1, 1957, subparagraph (1) of this paragraph shall not apply and the rule of subdivision (ii) of this subparagraph shall apply unless the trustee elects to have subparagraph (1) of this paragraph apply. Such election shall be made by the trustee in a statement filed on or before April 15, 1959, with the district director with whom such trust's return for any such taxable year was filed. The election provided by this subdivision shall not be available if the treatment given the income and the excess of capital gains over capital losses for taxable years for which returns have been filed was consistent with the provisions of subparagraph (1) of this paragraph.
              (ii) The rule referred to in subdivision (i) of this subparagraph is as follows: During the period between the occurrence of an event which causes a trust to terminate and the time when a trust is considered as terminated under this section, the income and the excess of capital gains over capital losses of the trust are in general considered as amounts required to be distributed for the year in which they are received. For example, a trust instrument provides for the payment of income to A during her life, and upon her death for the payment of the corpus to B. The trust reports on the basis of the calendar year. A dies on November 1, 1955, but no distribution is made to B until January 15, 1956. The income of the trust and the excess of capital gains over capital losses for the entire year 1955, to the extent not paid, credited, or required to be distributed to A or A's estate, are treated under sections 661 and 662 as amounts required to be distributed to B for the year 1955.
              (d) If a trust or the administration or settlement of an estate is considered terminated under this section for Federal income tax purposes (as for instance, because administration has been unduly prolonged), the gross income, deductions, and credits of the estate or trust are, subsequent to the termination, considered the gross income, deductions, and credits of the person or persons succeeding to the property of the estate or trust.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960, as amended by T.D. 9032, 67 FR 78376, Dec. 24, 2002]

              § 1.641(c)-0
              Table of contents.
              This section lists the major captions contained in § 1.641(c)-1.

                § 1.641(c)-1Electing small business trust.
                (a) In general.
                (b) Definitions.
                (1) Grantor portion.
                (2) S portion.
                (3) Non-S portion.
                (c) Taxation of grantor portion.
                (d) Taxation of S portion.
                (1) In general.
                (2) Section 1366 amounts.
                (3) Gains and losses on disposition of S stock.
                (4) State and local income taxes and administrative expenses.
                (e) Tax rates and exemption of S portion.
                (1) Income tax rate.
                (2) Alternative minimum tax exemption.

                (f) Adjustments to basis of stock in the S portion under section 1367.
                (g) Taxation of non-S portion.
                (1) In general.
                (2) Dividend income under section 1368(c)(2).
                (3) Interest on installment obligations.
                (4) Charitable deduction.
                (h) Allocation of state and local income taxes and administration expenses.
                (i) Treatment of distributions from the trust.
                (j) Termination or revocation of ESBT election.
                (k) Effective date.
                (l) Examples.

              [T.D. 8994, 67 FR 34394, May 14, 2002]

              § 1.641(c)-1
              Electing small business trust.
              (a) In general. An electing small business trust (ESBT) within the meaning of section 1361(e) is treated as two separate trusts for purposes of chapter 1 of the Internal Revenue Code. The portion of an ESBT that consists of stock in one or more S corporations is treated as one trust. The portion of an ESBT that consists of all the other assets in the trust is treated as a separate trust. The grantor or another person may be treated as the owner of all or a portion of either or both such trusts under subpart E, part I, subchapter J, chapter 1 of the Internal Revenue Code. The ESBT is treated as a single trust for administrative purposes, such as having one taxpayer identification number and filing one tax return. See § 1.1361-1(m).
              (b) Definitions—(1) Grantor portion—(i) In general. Subject to paragraph (b)(1)(ii) of this section, the grantor portion of an ESBT is the portion of the trust that is treated as owned by the grantor or another person under subpart E of the Code.
              (ii) Nonresident alien deemed owner. If, pursuant to section 672(f)(2)(A)(ii), the deemed owner of a grantor portion of the ESBT is a nonresident alien, as defined in section 7701(b)(1)(B) (NRA), the items of income, deduction, and credit from that grantor portion must be reallocated from the grantor portion to the S portion, as defined in paragraph (b)(2) of this section, of the ESBT.
              (2) S portion—(i) In general. Subject to paragraph (b)(2)(ii) of this section, the S portion of an ESBT is the portion of the trust that consists of S corporation stock and that is not treated as owned by the grantor or another person under subpart E of the Code.
              (ii) Nonresident alien (NRA) deemed owner of grantor portion. The S portion of an ESBT also includes the grantor portion of the items of income, deduction, and credit reallocated under paragraph (b)(1)(ii) of this section from the grantor portion of the ESBT to the S portion of the ESBT.
              (3) Non-S portion. The non-S portion of an ESBT is the portion of the trust that consists of all assets other than S corporation stock and that is not treated as owned by the grantor or another person under subpart E.
              (c) Taxation of grantor portion. The grantor or another person who is treated as the owner of a portion of the ESBT includes in computing taxable income items of income, deductions, and credits against tax attributable to that portion of the ESBT under section 671.
              (d) Taxation of S portion—(1) In general. The taxable income of the S portion is determined by taking into account only the items of income, loss, deduction, or credit specified in paragraphs (d)(2), (3), and (4) of this section, to the extent not attributable to the grantor portion.
              (2) Section 1366 amounts—(i) In general. The S portion takes into account the items of income, loss, deduction, or credit that are taken into account by an S corporation shareholder pursuant to section 1366 and the regulations thereunder. Rules otherwise applicable to trusts apply in determining the extent to which any loss, deduction, or credit may be taken into account in determining the taxable income of the S portion. See § 1.1361-1(m)(3)(iv) for allocation of those items in the taxable year of the S corporation in which the trust is an ESBT for part of the year and an eligible shareholder under section 1361(a)(2)(A)(i) through (iv) for the rest of the year.
              (ii) Special rule for charitable contributions. If a deduction described in paragraph (d)(2)(i) of this section is attributable to an amount of the S corporation's gross income that is paid by the S corporation for a charitable purpose specified in section 170(c) (without regard to section 170(c)(2)(A)), the contribution will be deemed to be paid by the S portion pursuant to the terms of the trust's governing instrument within the meaning of section 642(c)(1). The limitations of section 681, regarding unrelated business income, apply in determining whether the contribution is deductible in computing the taxable income of the S portion.
              (iii) Multiple S corporations. If an ESBT owns stock in more than one S corporation, items of income, loss, deduction, or credit from all the S corporations are aggregated for purposes of determining the S portion's taxable income.
              (3) Gains and losses on disposition of S stock—(i) In general. The S portion takes into account any gain or loss from the disposition of S corporation stock. No deduction is allowed under section 1211(b)(1) and (2) for capital losses that exceed capital gains.
              (ii) Installment method. If income from the sale or disposition of stock in an S corporation is reported by the trust on the installment method, the income recognized under this method is taken into account by the S portion. See paragraph (g)(3) of this section for the treatment of interest on the installment obligation. See § 1.1361-1(m)(5)(ii) regarding treatment of a trust as an ESBT upon the sale of all S corporation stock using the installment method.
              (iii) Distributions in excess of basis. Gain recognized under section 1368(b)(2) from distributions in excess of the ESBT's basis in its S corporation stock is taken into account by the S portion.
              (4) State and local income taxes and administrative expenses—(i) In general. State and local income taxes and administrative expenses directly related to the S portion and those allocated to that portion in accordance with paragraph (h) are taken into account by the S portion.
              (ii) Special rule for certain interest. Interest paid by the trust on money borrowed by the trust to purchase stock in an S corporation is allocated to the S portion but is not a deductible administrative expense for purposes of determining the taxable income of the S portion.
              (e) Tax rates and exemption of S portion—(1) Income tax rate. Except for capital gains, the highest marginal trust rate provided in section 1(e) is applied to the taxable income of the S portion. See section 1(h) for the rates that apply to the S portion's net capital gain.
              (2) Alternative minimum tax exemption. The exemption amount of the S portion under section 55(d) is zero.
              (f) Adjustments to basis of stock in the S portion under section 1367. The basis of S corporation stock in the S portion must be adjusted in accordance with section 1367 and the regulations thereunder. If the ESBT owns stock in more than one S corporation, the adjustments to the basis in the S corporation stock of each S corporation must be determined separately with respect to each S corporation. Accordingly, items of income, loss, deduction, or credit of an S corporation that are taken into account by the ESBT under section 1366 can only result in an adjustment to the basis of the stock of that S corporation and cannot affect the basis in the stock of the other S corporations held by the ESBT.
              (g) Taxation of non-S portion—(1) In general. The taxable income of the non-S portion is determined by taking into account all items of income, deduction, and credit to the extent not taken into account by either the grantor portion or the S portion. The items attributable to the non-S portion are taxed under subparts A through D of part I, subchapter J, chapter 1 of the Internal Revenue Code. The non-S portion may consist of more than one share pursuant to section 663(c).
              (2) Dividend income under section 1368(c)(2). Any dividend income within the meaning of section 1368(c)(2) is includible in the gross income of the non-S portion.
              (3) Interest on installment obligations. If income from the sale or disposition of stock in an S corporation is reported by the trust on the installment method, the interest on the installment obligation is includible in the gross income of the non-S portion. See paragraph (d)(3)(ii) of this section for the treatment of income from such a sale or disposition.

              (4) Charitable deduction. For purposes of applying section 642(c)(1) to payments made by the trust for a charitable purpose, the amount of gross income of the trust is limited to the gross income of the non-S portion. See paragraph (d)(2)(ii) of this section for special rules concerning charitable contributions paid by the S corporation that are deemed to be paid by the S portion.
              (h) Allocation of state and local income taxes and administration expenses. Whenever state and local income taxes or administration expenses relate to more than one portion of an ESBT, they must be allocated between or among the portions to which they relate. These items may be allocated in any manner that is reasonable in light of all the circumstances, including the terms of the governing instrument, applicable local law, and the practice of the trustee with respect to the trust if it is reasonable and consistent. The taxes and expenses apportioned to each portion of the ESBT are taken into account by that portion.
              (i) Treatment of distributions from the trust. Distributions to beneficiaries from the S portion or the non-S portion, including distributions of the S corporation stock, are deductible under section 651 or 661 in determining the taxable income of the non-S portion, and are includible in the gross income of the beneficiaries under section 652 or 662. However, the amount of the deduction or inclusion cannot exceed the amount of the distributable net income of the non-S portion. Items of income, loss, deduction, or credit taken into account by the grantor portion or the S portion are excluded for purposes of determining the distributable net income of the non-S portion of the trust.
              (j) Termination or revocation of ESBT election. If the ESBT election of the trust terminates pursuant to § 1.1361-1(m)(5) or the ESBT election is revoked pursuant to § 1.1361-1(m)(6), the rules contained in this section are thereafter not applicable to the trust. If, upon termination or revocation, the S portion has a net operating loss under section 172; a capital loss carryover under section 1212; or deductions in excess of gross income; then any such loss, carryover, or excess deductions shall be allowed as a deduction, in accordance with the regulations under section 642(h), to the trust, or to the beneficiaries succeeding to the property of the trust if the entire trust terminates.
              (k) Applicability date. This section generally is applicable for taxable years of ESBTs beginning on and after May 14, 2002. However, paragraphs (a), (b), (c), and (l)(1)(Example 1) of this section are applicable for taxable years of ESBTs that end on and after December 29, 2000. ESBTs may apply paragraphs (d)(4) and (h) of this section for taxable years of ESBTs beginning after December 31, 1996. Paragraphs (b)(1) and (2) of this section, and Example 6 in paragraph (l)(6) of this section, apply to all ESBTs after December 31, 2017.
              (l) Examples. The following examples illustrate the rules of this section:

              (1) Example 1: Comprehensive example.

              (i) Trust has a valid ESBT election in effect. Under section 678, B is treated as the owner of a portion of Trust consisting of a 10% undivided fractional interest in Trust. No other person is treated as the owner of any other portion of Trust under subpart E. Trust owns stock in X, an S corporation, and in Y, a C corporation. During 2000, Trust receives a distribution from X of $5,100, of which $5,000 is applied against Trust's adjusted basis in the X stock in accordance with section 1368(c)(1) and $100 is a dividend under section 1368(c)(2). Trust makes no distributions to its beneficiaries during the year.
              (ii) For 2000, Trust has the following items of income and deduction:

                Table 1 to paragraph (l)(1)(ii)

                  Ordinary income attributable to X under section 1366
                  $5,000

                  Dividend income from Y

                  $900

                  Dividend from X representing C corporation earnings and profits
                  $100

                  Total trust income
                  $6,000

                  Charitable contributions attributable to X under section 1366
                  $300

                  Trustee fees
                  $200

                  State and local income taxes
                  $100

              (iii) Trust's items of income and deduction are divided into a grantor portion, an S portion, and a non-S portion for purposes of determining the taxation of those items. Income is allocated to each portion as follows:
              (A) B must take into account the items of income attributable to the grantor portion, that is, 10% of each item, as follows:

                Table 2 to paragraph (l)(1)(iii)(A)

                  Ordinary income from X

                  $500

                  Dividend income from Y

                  $90

                  Dividend income from X

                  $10

                  Total grantor portion income
                  $600

              (B) The total income of the S portion is $4,500, determined as follows:

                Table 3 to paragraph (l)(1)(iii)(B)

                  Ordinary income from X

                  $5,000

                  Less: Grantor portion
                  ($500)

                  Total S portion income
                  $4,500

              (C) The total income of the non-S portion is $900 determined as follows:

                Table 4 to paragraph (l)(1)(iii)(C)

                  Dividend income from Y (less grantor portion)
                  $810

                  Dividend income from X (less grantor portion)
                  $90

                  Total non-S portion income
                  $900

              (iv) The administrative expenses and the state and local income taxes relate to all three portions and under state law would be allocated ratably to the $6,000 of trust income. Thus, these items would be allocated 10% (600/6000) to the grantor portion, 75% (4500/6000) to the S portion and 15% (900/6000) to the non-S portion.
              (v) B must take into account the following deductions attributable to the grantor portion of the trust:

                Table 5 to paragraph (l)(1)(v)

                  Charitable contributions from X

                  $30

                  Trustee fees
                  $20

                  State and local income taxes
                  $10

              (vi) The taxable income of the S portion is $4,005, determined as follows:

                Table 6 to paragraph (l)(1)(vi)

                  Ordinary income from X

                  $4,500

                  Less: Charitable contributions from X (less grantor portion)
                  ($270)

                  75% of trustee fees
                  ($150)

                  75% of state and local income taxes
                  ($75)

                  Taxable income of S portion
                  $4,005

              (vii) The taxable income of the non-S portion is $755, determined as follows:

                Table 7 to paragraph (l)(1)(vii)

                  Dividend income from Y

                  $810

                  Dividend income from X

                  $90

                  Total non-S portion income
                  $900

                  Less: 15% of trustee fees
                  ($30)

                  15% state and local income taxes
                  ($15)

                  Personal exemption
                  ($100)

                  Taxable income of non-S portion
                  $755

              (2) Example 2: Sale of S stock.

              Trust has a valid ESBT election in effect and owns stock in X, an S corporation. No person is treated as the owner of any portion of Trust under subpart E. In 2003, Trust sells all of its stock in X to a person who is unrelated to Trust and its beneficiaries and realizes a capital gain of $5,000. This gain is taken into account by the S portion and is taxed using the appropriate capital gain rate found in section 1(h).
              (3) Example 3—(i) Sale of S stock for an installment note. Assume the same facts as in Example 2, in paragraph (l)(2) of this section except that Trust sells its stock in X for a $400,000 installment note payable with stated interest over ten years. After the sale, Trust does not own any S corporation stock.
              (ii) Loss on installment sale. Assume Trust's basis in its X stock was $500,000. Therefore, Trust sustains a capital loss of $100,000 on the sale. Upon the sale, the S portion terminates and the excess loss, after being netted against the other items taken into account by the S portion, is made available to the entire trust as provided in section 641(c)(4).
              (iii) Gain on installment sale. Assume Trust's basis in its X stock was $300,000 and that the $100,000 gain will be recognized under the installment method of section 453. Interest income will be recognized annually as part of the installment payments. The portion of the $100,000 gain recognized annually is taken into account by the S portion. However, the annual interest income is includible in the gross income of the non-S portion.
              (4) Example 4: Charitable lead annuity trust.

              Trust is a charitable lead annuity trust which is not treated as owned by the grantor or another person under subpart E. Trust acquires stock in X, an S corporation, and elects to be an ESBT. During the taxable year, pursuant to its terms, Trust pays $10,000 to a charitable organization described in section 170(c)(2). The non-S portion of Trust receives an income tax deduction for the charitable contribution under section 642(c) only to the extent the amount is paid out of the gross income of the non-S portion. To the extent the amount is paid from the S portion by distributing S corporation stock, no charitable deduction is available to the S portion.
              (5) Example 5: ESBT distributions.

              (i) As of January 1, 2002, Trust owns stock in X, a C corporation. No portion of Trust is treated as owned by the grantor or another person under subpart E. X elects to be an S corporation effective January 1, 2003, and Trust elects to be an ESBT effective January 1, 2003. On February 1, 2003, X makes an $8,000 distribution to Trust, of which $3,000 is treated as a dividend from accumulated earnings and profits under section 1368(c)(2) and the remainder is applied against Trust's basis in the X stock under section 1368(b). The trustee of Trust makes a distribution of $4,000 to Beneficiary during 2003. For 2003, Trust's share of X's section 1366 items is $5,000 of ordinary income. For the year, Trust has no other income and no expenses or state or local taxes.
              (ii) For 2003, Trust has $5,000 of taxable income in the S portion. This income is taxed to Trust at the maximum rate provided in section 1(e). Trust also has $3,000 of distributable net income (DNI) in the non-S portion. The non-S portion of Trust receives a distribution deduction under section 661(a) of $3,000, which represents the amount distributed to Beneficiary during the year ($4,000), not to exceed the amount of DNI ($3,000). Beneficiary must include this amount in gross income under section 662(a). As a result, the non-S portion has no taxable income.
              (6) Example 6: NRA as potential current beneficiary. Domestic Trust (DT) has a valid ESBT election in effect. DT owns S corporation stock. The S corporation owns U.S. and foreign assets. The foreign assets produce foreign source income. B, an NRA, is the grantor and the only trust beneficiary and potential current beneficiary of DT. B is not a resident of a country with which the United States has an income tax treaty. Under section 677(a), B is treated as the owner of DT because, under the trust documents, income and corpus may be distributed only to B during B's lifetime. Paragraph (b)(2)(ii) of this section requires that the S corporation income of the ESBT that otherwise would have been allocated to B under the grantor trust rules must be reallocated from B's grantor portion to the S portion of DT. In the example in this paragraph (l)(6), the S portion of DT is treated as including the grantor portion of the ESBT, and thus all of DT's income from the S corporation is taxable to DT.
              [T.D. 8994, 67 FR 34395, May 14, 2002, as amended by T.D. 9868, 84 FR 28215, June 18, 2019]

              § 1.642(a)(1)-1
              Partially tax-exempt interest.
              An estate or trust is allowed the credit against tax for partially tax-exempt interest provided by section 35 only to the extent that the credit does not relate to interest properly allocable to a beneficiary under section 652 or 662 and the regulations thereunder. A beneficiary of an estate or trust is allowed the credit against tax for partially tax-exempt interest provided by section 35 only to the extent that the credit relates to interest properly allocable to him under section 652 or 662 and the regulations thereunder. If an estate or trust holds partially tax-exempt bonds and elects under section 171 to treat the premium on the bonds as amortizable, the credit allowable under section 35, with respect to the bond interest (whether allowable to the estate or trust or to the beneficiary), is reduced under section 171(a)(3) by reducing the shares of the interest allocable, respectively, to the estate or trust and its beneficiary by the portion of the amortization deduction attributable to the shares.

              § 1.642(a)(2)-1
              Foreign taxes.

              An estate or trust is allowed the credit against tax for taxes imposed by foreign countries and possessions of the United States to the extent allowed by section 901 only for so much of those taxes as are not properly allocable under that section to the beneficiaries. See section 901(b)(4). For purposes of section 901(b)(4), the term beneficiaries includes charitable beneficiaries.

              § 1.642(a)(3)-1
              Dividends received by an estate or trust.

              An estate or trust is allowed a credit against the tax for dividends received on or before December 31, 1964 (see section 34), only for so much of the dividends as are not properly allocable to any beneficiary under section 652 or 662. Section 642(a)(3), and this section do not apply to amounts received as dividends after December 31, 1964. For treatment of the credit in the hands of the beneficiary see § 1.652(b)-1.
              [T.D. 6777, 29 FR 17808, Dec. 16, 1964]

              § 1.642(a)(3)-2
              Time of receipt of dividends by beneficiary.
              In general, dividends are deemed received by a beneficiary in the taxable year in which they are includible in his gross income under section 652 or 662. For example, a simple trust, reporting on the basis of a fiscal year ending October 30, receives quarterly dividends on November 3, 1954, and February 3, May 3, and August 3, 1955. These dividends are all allocable to beneficiary A, reporting on a calendar year basis, under section 652 and are deemed received by A in 1955. See section 652(c). Accordingly, A may take all these dividends into account in determining his credit for dividends received under section 34 and his dividends exclusion under section 116. However, solely for purposes of determining whether dividends deemed received by individuals from trusts or estates qualify under the time limitations of section 34(a) or section 116(a), section 642(a)(3) provides that the time of receipt of the dividends by the trust or estate is also considered the time of receipt by the beneficiary. For example, a simple trust reporting on the basis of a fiscal year ending October 30 receives quarterly dividends on December 3, 1953, and March 3, June 3, and September 3, 1954. These dividends are all allocable to beneficiary A, reporting on the calendar year basis, under section 652 and are includible in his income for 1954. However, for purposes of section 34(a) or section 116(a), these dividends are deemed received by A on the same dates that the trust received them. Accordingly, A may take into account in determining the credit under section 34 only those dividends received by the trust on September 3, 1954, since the dividend received credit is not allowed under section 34 for dividends received before August 1, 1954 (or after December 31, 1964). Section 642(a)(3) and this section do not apply to amounts received by an estate or trust as dividends after December 31, 1964. However, the rules in this section relating to time of receipt of dividends by a beneficiary are applicable to dividends received by an estate or trust prior to January 1, 1965, and accordingly, such dividends are deemed to be received by the beneficiary (even though received after December 31, 1964) on the same dates that the estate or trust received them for purposes of determining the credit under section 34 or the exclusion under section 116.
              [T.D. 6777, 29 FR 17808, Dec. 16, 1964]

              § 1.642(a)(3)-3
              Cross reference.
              See § 1.683-2(c) for examples relating to the treatment of dividends received by an estate or trust during a fiscal year beginning in 1953 and ending in 1954.

              § 1.642(b)-1
              Deduction for personal exemption.
              In lieu of the deduction for personal exemptions provided by section 151:
              (a) An estate is allowed a deduction of $600,
              (b) A trust which, under its governing instrument, is required to distribute currently all of its income for the taxable year is allowed a deduction of $300, and
              (c) All other trusts are allowed a deduction of $100.

              A trust which, under its governing instrument, is required to distribute all of its income currently is allowed a deduction of $300, even though it also distributes amounts other than income in the taxable year and even though it may be required to make distributions which would qualify for the charitable contributions deduction under section 642(c) (and therefore does not qualify as a “simple trust” under sections 651-652). A trust for the payment of an annuity is allowed a deduction of $300 in a taxable year in which the amount of the annuity required to be paid equals or exceeds all the income of the trust for the taxable year. For the meaning of the term income required to be distributed currently, see § 1.651(a)-2.

              § 1.642(c)-0
              Effective dates.
              The provisions of section 642(c) (other than section 642(c)(5)) and of §§ 1.642 (c)-1 through 1.642(c)-4 apply to amounts paid, permanently set aside, or to be used for a charitable purpose in taxable years beginning after December 31, 1969. The provisions of section 642(c)(5) and of §§ 1.642(c)-5 through 1.642(c)-7 apply to transfers in trust made after July 31, 1969. For provisions relating to amounts paid, permanently set aside, or to be used for a charitable purpose in taxable years beginning before January 1, 1970, see 26 CFR 1.642(c)-1 through 1.642(c)-4 (Rev. as of Jan. 1, 1971).
              [T.D. 7357, 40 FR 23739, June 2, 1975]

              § 1.642(c)-1
              Unlimited deduction for amounts paid for a charitable purpose.
              (a) In general. (1) Any part of the gross income of an estate, or trust which, pursuant to the terms of the governing instrument is paid (or treated under paragraph (b) of this section as paid) during the taxable year for a purpose specified in section 170(c) shall be allowed as a deduction to such estate or trust in lieu of the limited charitable contributions deduction authorized by section 170(a). In applying this paragraph without reference to paragraph (b) of this section, a deduction shall be allowed for an amount paid during the taxable year in respect of gross income received in a previous taxable year, but only if no deduction was allowed for any previous taxable year to the estate or trust, or in the case of a section 645 election, to a related estate, as defined under § 1.645-1(b), for the amount so paid.
              (2) In determining whether an amount is paid for a purpose specified in section 170(c)(2) the provisions of section 170(c)(2)(A) shall not be taken into account. Thus, an amount paid to a corporation, trust, or community chest, fund, or foundation otherwise described in section 170(c)(2) shall be considered paid for a purpose specified in section 170(c) even though the corporation, trust, or community chest, fund, or foundation is not created or organized in the United States, any State, the District of Columbia, or any possession of the United States.
              (3) See section 642(c)(6) and § 1.642(c)-4 for disallowance of a deduction under this section to a trust which is, or is treated under section 4947(a)(1) as though it were a private foundation (as defined in section 509(a) and the regulations thereunder) and not exempt from taxation under section 501(a).
              (b) Election to treat contributions as paid in preceding taxable year—(1) In general. For purposes of determining the deduction allowed under paragraph (a) of this section, the fiduciary (as defined in section 7701(a)(6)) of an estate or trust may elect under section 642(c)(1) to treat as paid during the taxable year (whether or not such year begins before January 1, 1970) any amount of gross income received during such taxable year or any preceding taxable year which is otherwise deductible under such paragraph and which is paid after the close of such taxable year but on or before the last day of the next succeeding taxable year of the estate or trust. The preceding sentence applies only in the case of payments actually made in a taxable year which is a taxable year beginning after December 31, 1969. No election shall be made, however, in respect of any amount which was deducted for any previous taxable year or which is deducted for the taxable year in which such amount is paid.
              (2) Time for making election. The election under subparagraph (1) of this paragraph shall be made not later than the time, including extensions thereof, prescribed by law for filing the income tax return for the succeeding taxable year. Such election shall, except as provided in subparagraph (4) of this paragraph, become irrevocable after the last day prescribed for making it. Having made the election for any taxable year, the fiduciary may, within the time prescribed for making it, revoke the election without the consent of the Commissioner.
              (3) Manner of making the election. The election shall be made by filing with the income tax return (or an amended return) for the taxable year in which the contribution is treated as paid a statement which:

              (i) States the name and address of the fiduciary,
              (ii) Identifies the estate or trust for which the fiduciary is acting,
              (iii) Indicates that the fiduciary is making an election under section 642(c)(1) in respect of contributions treated as paid during such taxable year,
              (iv) Gives the name and address of each organization to which any such contribution is paid, and
              (v) States the amount of each contribution and date of actual payment or, if applicable, the total amount of contributions paid to each organization during the succeeding taxable year, to be treated as paid in the preceding taxable year.
              (4) Revocation of certain elections with consent. An application to revoke with the consent of the Commissioner any election made on or before June 8, 1970, must be in writing and must be filed not later than September 2, 1975.
              No consent will be granted to revoke an election for any taxable year for which the assessment of a deficiency is prevented by the operation of any law or rule of law. If consent to revoke the election is granted, the fiduciary must attach a copy of the consent to the return (or amended return) for each taxable year affected by the revocation. The application must be addressed to the Commissioner of Internal Revenue, Washington, DC 20224, and must indicate:
              (i) The name and address of the fiduciary and the estate or trust for which he was acting,
              (ii) The taxable year for which the election was made,
              (iii) The office of the district director, or the service center, where the return (or amended return) for the year of election was filed, and
              (iv) The reason for revoking the election.
              [T.D. 7357, 40 FR 23739, June 2, 1975; 40 FR 24361, June 6, 1975; T.D. 9032, 67 FR 78376, Dec. 24, 2002]

              § 1.642(c)-2
              Unlimited deduction for amounts permanently set aside for a charitable purpose.
              (a) Estates. Any part of the gross income of an estate which pursuant to the terms of the will:
              (1) Is permanently set aside during the taxable year for a purpose specified in section 170(c), or
              (2) Is to be used (within or without the United States or any of its possessions) exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, or for the establishment, acquisition, maintenance, or operation of a public cemetery not operated for profit,
              shall be allowed as a deduction to the estate in lieu of the limited charitable contributions deduction authorized by section 170(a).
              (b) Certain trusts—(1) In general. Any part of the gross income of a trust to which either subparagraph (3) or (4) of this paragraph applies, that by the terms of the governing instrument:
              (i) Is permanently set aside during the taxable year for a purpose specified in section 170(c), or
              (ii) Is to be used (within or without the United States or any of its possessions) exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, or for the establishment, acquisition, maintenance, or operation of a public cemetery not operated for profit,
              shall be allowed, subject to the limitation provided in subparagraph (2) of this paragraph, as a deduction to the trust in lieu of the limited charitable contributions deduction authorized by section 170(a). The preceding sentence applied only to a trust which is required by the terms of its governing instrument to set amounts aside. See section 642(c)(6) and § 1.642(c)-4 for disallowance of a deduction under this section to a trust which is, or is treated under section 4947(a)(1) as though it were, a private foundation (as defined in section 509(a) and the regulations thereunder) that is not exempt from taxation under section 501(a).
              (2) Limitation of deduction. Subparagraph (1) of this paragraph applies only to the gross income earned by a trust with respect to amounts transferred to the trust under a will executed on or before October 9, 1969, and satisfying the requirements of subparagraph (4) of this paragraph or transferred to the trust on or before October 9, 1969. For such purposes, any income, gains, or losses, which are derived at any time from the amounts so transferred to the trust shall also be taken into account in applying subparagraph (1) of this paragraph. If any such amount so transferred to the trust is invested or reinvested at any time, any asset received by the trust upon such investment or reinvestment shall also be treated as an amount which was so transferred to the trust. In the case of a trust to which this paragraph applies which contains (i) amounts transferred pursuant to transfers described in the first sentence of this subparagraph and (ii) amounts transferred pursuant to transfers not so described, subparagraph (1) of this paragraph shall apply only if the amounts described in subdivision (i) of this subparagraph, together with all income, gains, and losses derived therefrom, are separately accounted for from the amounts described in subdivision (ii) of this subparagraph, together with all income, gains, and losses derived therefrom. Such separate accounting shall be carried out consistently with the principles of paragraph (c)(4) of § 53.4947-1 of this chapter (Foundation Excise Tax Regulations), relating to accounting for segregated amounts of split-interest trusts.
              (3) Trusts created on or before October 9, 1969. A trust to which this subparagraph applies is a trust, testamentary or otherwise, which was created on or before October 9, 1969, and which qualifies under either subdivision (i) or (ii) of this subparagraph.
              (i) Transfer of irrevocable remainder interest to charity. To qualify under this subdivision the trust must have been created under the terms of an instrument granting an irrevocable remainder interest in such trust to or for the use of an organization described in section 170(c). If the instrument granted a revocable remainder interest but the power to revoke such interest terminated on or before October 9, 1969, without the remainder interest having been revoked, the remainder interest will be treated as irrevocable for purposes of the preceding sentence.
              (ii) Grantor under a mental disability to change terms of trust. (A) To qualify under this subdivision (ii) the trust must have been created by a grantor who was at all times after October 9, 1969, under a mental disability to change the terms of the trust. The term mental disability for this purpose means mental incompetence to change the terms of the trust, whether or not there has been an adjudication of mental incompetence and whether or not there has been an appointment of a committee, guardian, fiduciary, or other person charged with the care of the person or property of the grantor.
              (B) If the grantor has not been adjudged mentally incompetent, the trustee must obtain from a qualified physician a certificate stating that the grantor of the trust has been mentally incompetent at all times after October 9, 1969, and that there is no reasonable probability that the grantor's mental capacity will ever improve to the extent that he will be mentally competent to change the terms of the trust. A copy of this certification must be filed with the first return on which a deduction is claimed by reason of this subdivision (ii) and subparagraph (1) of this paragraph. Thereafter, a statement referring to such medical opinion must be attached to any return for a taxable year for which such a deduction is claimed and during which the grantor's mental incompetence continues. The original certificate must be retained by the trustee of the trust.
              (C) If the grantor has been adjudged mentally incompetent, a copy of the judgment or decree, and any modification thereof, must be filed with the first return on which a deduction is claimed by reason of this subdivision (ii) and subparagraph (1) of this paragraph. Thereafter, a statement referring to such judgment or decree must be attached to any return for a taxable year for which such a deduction is claimed and during which the grantor's mental incompetence continues. A copy of such judgment or decree must also be retained by the trustee of the trust.
              (D) This subdivision (ii) applies even though a person charged with the care of the person or property of the grantor has the power to change the terms of the trust.
              (4) Testamentary trust established by will executed on or before October 9, 1969.
                A trust to which this subparagraph applies is a trust which was established by will executed on or before October 9, 1969, and which qualifies under either subdivision (i), (ii), or (iii) of this subparagraph. This subparagraph does not apply, however, to that portion of any trust, not established by a will executed on or before October 9, 1969, which was transferred to such trust by a will executed on or before October 9, 1969. Nor does it apply to that portion of any trust, not established by a will executed on or before October 9, 1969, which was subject to a testamentary power of appointment that fails by reason of the testator's nonexercise of the power in a will executed on or before October 9, 1969.
              (i) Testator dying within 3 years without republishing his will. To qualify under this subdivision the trust must have been established by the will of a testator who died after October 9, 1969, but before October 9, 1972, without having amended any dispositive provision of the will after October 9, 1969, by codicil or otherwise.
              (ii) Testator having no right to change his will. To qualify under this subdivision the trust must have been established by the will of a testator who died after October 9, 1969, and who at no time after that date had the right to change any portion of such will pertaining to such trust. This subdivision could apply, for example, where a contract has been entered into for the execution of wills containing reciprocal provisions as well as provisions for the benefit of an organization described in section 170(c) and under applicable local law the surviving testator is prohibited from revoking his will because he has accepted the benefit of the provisions of the will of the other contracting party.
              (iii) Testator under a mental disability to republish his will. To qualify under this subdivision the trust must have been established by the will of a testator who died after October 8, 1972, without having amended any dispositive provision of such will after October 9, 1969, and before October 9, 1972, by codicil or otherwise, and who is under a mental disability at all times after October 8, 1972, to amend such will, by codicil or otherwise. The provisions of subparagraph (3)(ii) of this paragraph with respect to mental incompetence apply for purposes of this subdivision.
              (iv) Amendment of dispositive provisions. The provisions of paragraph (e) (4) and (5) of § 20.2055-2 of this chapter (Estate Tax Regulations) are to be applied under subdivisions (i) and (iii) of this subparagraph in determining whether there has been an amendment of a dispositive provision of a will.
              (c) Pooled income funds. Any part of the gross income of a pooled income fund to which § 1.642(c)-5 applies for the taxable year that is attributable to net long-term capital gain (as defined in section 1222(7)) which, pursuant to the terms of the governing instrument, is permanently set aside during the taxable year for a purpose specified in section 170(c) shall be allowed as a deduction to the fund in lieu of the limited charitable contributions deduction authorized by section 170(a). No amount of net long-term capital gain shall be considered permanently set aside for charitable purposes if, under the terms of the fund's governing instrument and applicable local law, the trustee has the power, whether or not exercised, to satisfy the income beneficiaries' right to income by the payment of either: an amount equal to a fixed percentage of the fair market value of the fund's assets (whether determined annually or averaged on a multiple year basis); or any amount that takes into account unrealized appreciation in the value of the fund's assets. In addition, no amount of net long-term capital gain shall be considered permanently set aside for charitable purposes to the extent the trustee distributes proceeds from the sale or exchange of the fund's assets as income within the meaning of § 1.642(c)-5(a)(5)(i). No deduction shall be allowed under this paragraph for any portion of the gross income of such fund which is (1) attributable to income other than net long-term capital gain (2) earned with respect to amounts transferred to such fund before August 1, 1969. However, see paragraph (b) of this section for a deduction (subject to the limitations of such paragraph) for amounts permanently set aside by a pooled income fund which meets the requirements of that paragraph. The principles of paragraph (b) or (2) of this section with respect to investment, reinvestment, and separate accounting shall apply under this paragraph in the case of amounts transferred to the fund after July 31, 1969.
              (d) Disallowance of deduction for certain amounts not deemed to be permanently set aside for charitable purposes. No amount will be considered to be permanently set aside, or to be used, for a purpose described in paragraph (a) or (b)(1) of this section unless under the terms of the governing instrument and the circumstances of the particular case the possibility that the amount set aside, or to be used, will not be devoted to such purpose or use is so remote as to be negligible. Thus, for example, where there is possibility of the invasion of the corpus of a charitable remainder trust, as defined in § 1.664-1(a)(1)(ii), in order to make payment of the annuity amount or unitrust amount, no deduction will be allowed under paragraph (a) of this section in respect of any amount set aside by an estate for distribution to such a charitable remainder trust.
              (e) Effective dates. Generally, the second sentence of paragraph (c) of this section, concerning the loss of any charitable deduction for long-term capital gains if the fund's income may be determined by a fixed percentage of the fair market value of the fund's assets or by any amount that takes into account unrealized appreciation in the value of the fund's assets, applies for taxable years beginning after January 2, 2004. In a state whose statute permits income to be determined by reference to a fixed percentage of, or the unrealized appreciation in, the value of the fund's assets, net long-term capital gain of a pooled income fund may be considered to be permanently set aside for charitable purposes if the fund's governing instrument is amended or reformed to eliminate the possibility of determining income in such a manner and if income has not been determined in this manner. For this purpose, a judicial proceeding to reform the fund's governing instrument must be commenced, or a nonjudicial reformation that is valid under state law must be completed, by the date that is nine months after the later of January 2, 2004 or the effective date of the state statute authorizing determination of income in such a manner.
              For treatment of distributions by an estate to a charitable remainder trust, see paragraph (a)(5)(iii) of § 1.664-1.
              [T.D. 7357, 40 FR 23740, June 2, 1975; 40 FR 24361, June 6, 1975, as amended by T.D. 9102, 69 FR 17, Jan. 2, 2004]

              § 1.642(c)-3
              Adjustments and other special rules for determining unlimited charitable contributions deduction.
              (a) Income in respect of a decedent. For purposes of §§ 1.642(c)-1 and 1.642(c)-2, an amount received by an estate or trust which is includible in its gross income under section 691(a)(1) as income in respect of a decedent shall be included in the gross income of the estate or trust.
              (b) Determination of amounts deductible under section 642(c) and the character of such amounts—(1) Reduction of charitable contributions deduction by amounts not included in gross income. If an estate, pooled income fund, or other trust pays, permanently sets aside, or uses any amount of its income for a purpose specified in section 642(c) (1), (2) or (3) and that amount includes any items of estate or trust income not entering into the gross income of the estate or trust, the deduction allowable under § 1.642(c)-1 or § 1.642(c)-2 is limited to the gross income so paid, permanently set aside, or used. In the case of a pooled income fund for which a deduction is allowable under paragraph (c) of § 1.642(c)-2 for amounts permanently set aside, only the gross income of the fund which is attributable to net long-term capital gain (as defined in section 1222(7)) shall be taken into account.
              (2) Determination of the character of an amount deductible under section 642(c). In determining whether the amounts of income so paid, permanently set aside, or used for a purpose specified in section 642(c)(1), (2), or (3) include particular items of income of an estate or trust, whether or not included in gross income, a provision in the governing instrument or in local law that specifically provides the source out of which amounts are to be paid, permanently set aside, or used for such a purpose controls for Federal tax purposes to the extent such provision has economic effect independent of income tax consequences. See § 1.652(b)-2(b). In the absence of such specific provisions in the governing instrument or in local law, the amount to which section 642(c) applies is deemed to consist of the same proportion of each class of the items of income of the estate or trust as the total of each class bears to the total of all classes. See § 1.643(a)-5(b) for the method of determining the allocable portion of exempt income and foreign income. This paragraph (b)(2) is illustrated by the following examples:

                Example 1.
                A charitable lead annuity trust has the calendar year as its taxable year, and is to pay an annuity of $10,000 annually to an organization described in section 170(c). A provision in the trust governing instrument provides that the $10,000 annuity should be deemed to come first from ordinary income, second from short-term capital gain, third from fifty percent of the unrelated business taxable income, fourth from long-term capital gain, fifth from the balance of unrelated business taxable income, sixth from tax-exempt income, and seventh from principal. This provision in the governing instrument does not have economic effect independent of income tax consequences, because the amount to be paid to the charity is not dependent upon the type of income from which it is to be paid. Accordingly, the amount to which section 642(c) applies is deemed to consist of the same proportion of each class of the items of income of the trust as the total of each class bears to the total of all classes.

                Example 2.
                A trust instrument provides that 100 percent of the trust's ordinary income must be distributed currently to an organization described in section 170(c) and that all remaining items of income must be distributed currently to B, a noncharitable beneficiary. This income ordering provision has economic effect independent of income tax consequences because the amount to be paid to the charitable organization each year is dependent upon the amount of ordinary income the trust earns within that taxable year. Accordingly, for purposes of section 642(c), the full amount distributed to charity is deemed to consist of ordinary income.

              (3) Other examples. For examples showing the determination of the character of an amount deductible under § 1.642(c)-1 or § 1.642(c)-2, see examples 1 and 2 in § 1.662(b)-2 and paragraph (e) of the example in § 1.662(c)-4.
              (c) Capital gains included in charitable contribution. Where any amount of the income paid, permanently set aside, or used for a purpose specified in section 642(c) (1), (2), or (3), is attributable to net long-term capital gain (as defined in section 1222(7)), the amount of the deduction otherwise allowable under § 1.642(c)-1 or § 1.642(c)-2, must be adjusted for any deduction provided in section 1202 of 50 percent of the excess, if any, of the net long-term capital gain over the net short-term capital loss. For determination of the extent to which the contribution to which § 1.642(c)-1 or § 1.642(c)-2 applies is deemed to consist of net long-term capital gains, see paragraph (b) of this section. The application of this paragraph may be illustrated by the following examples:

                Example 1.
                Under the terms of the trust instrument, the income of a trust described in § 1.642(c)-2 (b)(3)(i) is currently distributable to A during his life and capital gains are allocable to corpus. No provision is made in the trust instrument for the invasion of corpus for the benefit of A. Upon A's death the corpus of the trust is to be distributed to M University, an organization described in section 501(c)(3) which is exempt from taxation under section 501(a). During the taxable year ending December 31, 1970, the trust has long-term capital gains of $100,000 from property transferred to it on or before October 9, 1969, which are permanently set aside for charitable purposes. The trust includes $100,000 in gross income but is allowed a deduction of $50,000 under section 1202 for the long-term capital gains and a charitable contributions deduction of $50,000 under section 642(c)(2) ($100,000 permanently set aside for charitable purposes less $50,000 allowed as a deduction under section 1202 with respect to such $100,000).

                Example 2.

                Under the terms of the will, $200,000 of the income (including $100,000 capital gains) for the taxable year 1972 of an estate is distributed, one-quarter to each of two individual beneficiaries and one-half to N University, an organization described in section 501(c)(3) which is exempt from taxation under section 501(a). During 1972 the estate has ordinary income of $200,000, long-term capital gains of $100,000, and no capital losses. It is assumed that for 1972 the estate has no other items of income or any deductions other than those discussed herein. The entire capital gains of $100,000 are included in the gross income of the estate for 1972, and N University receives $100,000 from the estate in such year. However, the amount allowable to the estate under section 642(c)(1) is subject to appropriate adjustment for the deduction allowable under section 1202. In view of the distributions of $25,000 of capital gains to each of the individual beneficiaries, the deduction allowable to the estate under section 1202 is limited by such section to $25,000 [($100,000 capital gains less $50,000 capital gains includible in income of individual beneficiaries under section 662) × 50%]. Since the whole of this $25,000 deduction under section 1202 is attributable to the distribution of $50,000 of capital gains to N University, the deduction allowable to the estate in 1972 under section 642(c)(1) is $75,000 [$100,000 (distributed to N) less $25,000 (proper adjustment for section 1202 deduction)].

                Example 3.
                Under the terms of the trust instrument, 30 percent of the gross income (exclusive of capital gains) of a trust described in § 1.642(c)-2(b)(3)(i) is currently distributed to B, the sole income beneficiary. Net capital gains (capital gain net income for taxable years beginning after December 31, 1976) and undistributed ordinary income are allocable to corpus. No provision is made in the trust instrument for the invasion of corpus for the benefit of B. Upon B's death the remainder of the trust is to be distributed to M Church. During the taxable year 1972, the trust has ordinary income of $100,000, long-term capital gains of $15,000, short-term capital gains of $1,000, long-term capital losses of $5,000, and short-term capital losses of $2,500. It is assumed that the trust has no other items of income or any deductions other than those discussed herein. All the ordinary income and capital gains and losses are attributable to amounts transferred to the trust before October 9, 1969. The trust includes in gross income for 1972 the total amount of $116,000 [$100,000 (ordinary income) + $16,000 (total capital gains determined without regard to capital losses)]. Pursuant to the terms of the governing instrument the trust distributes to B in 1972 the amount of $30,000 ($100,000 × 30%). The balance of $78,500 [($116,000 less $7,500 capital losses) −030,000 distribution] is available for the set-aside for charitable purposes. In determining taxable income for 1972 the capital losses of $7,500 ($5,000 + $2,500) are allowable in full under section 1211(b)(1). The net capital gain (capital gain net income for taxable years beginning after December 31, 1976) of $8,500 ($16,000 less $7,500) is the excess of the net long-term capital gain of $10,000 ($15,000 less $5,000) over the net short-term capital loss of $1,500 ($2,500 less $1,000). The deduction under section 1202 is $4,250 ($8,500 × 50%), all of which is attributable to the set-aside for charitable purposes. Accordingly, for 1972 the deduction allowable to the trust under section 642(c)(2) is $74,250 [$78,500 (set-aside for M) less $4,250 (proper adjustment for section 1202 deduction)].

                Example 4.
                During the taxable year a pooled income fund, as defined in § 1.642(c)-5, has in addition to ordinary income long-term capital gains of $150,000, short-term capital gains of $15,000, long-term capital losses of $100,000, and short-term capital losses of $10,000. Under the Declaration of Trust and pursuant to State law net long-term capital gain is allocable to corpus and net short-term capital gain is to be distributed to the income beneficiaries of the fund. All the capital gains and losses are attributable to amounts transferred to the fund after July 31, 1969. In view of the distribution of the net short-term capital gain of $5,000 ($15,000 less $10,000) to the income beneficiaries, the deduction allowed to the fund under section 1202 is limited by such section to $25,000 [($150,000 (long-term capital gains) less $100,000 (long-term capital losses)) × 50%]. Since the whole of this deduction under section 1202 is attributable to the set-aside for charitable purposes, the deduction of $50,000 ($150,000 less $100,000) otherwise allowable under section 642(c)(3) is subject to appropriate adjustment under section 642(c)(4) for the deduction allowable under section 1202. Accordingly, the amount of the set-aside deduction is $25,000 [$50,000 (set-aside for public charity) less $25,000 (proper adjustment for section 1202 deduction)].

                Example 5.
                The facts are the same as in example 4 except that under the Declaration of Trust and pursuant to State law all the net capital gain (capital gain net income for taxable years beginning after December 31, 1976) for the taxable year is allocable to corpus of the fund. The fund would thus include in gross income total capital gains of $165,000 ($150,000 + $15,000). In determining taxable income for the taxable year the capital losses of $110,000 ($100,000 + $10,000) are allowable in full under section 1211(b)(1). The net capital gain of $55,000 ($165,000 less $110,000) is available for the set-aside for charitable purposes under section 642(c)(3) only in the amount of the net long-term capital gain of $50,000 ($150,000 long-term gains less $100,000 long-term losses). The deduction under section 1202 is $25,000 ($50,000 × 50%), all of which is attributable to the set-aside for charitable purposes. Accordingly, the deduction allowable to the fund under section 642(c)(3) is $25,000 [$50,000 (set-aside for public charity) less $25,000 (proper adjustment for section 1202 deduction)]. The $5,000 balance of net capital gain (capital gain net income for taxable years beginning after December 31, 1976) is taken into account in determining taxable income of the pooled income fund for the taxable year.

              (d) Disallowance of deduction for amounts allocable to unrelated business income. In the case of a trust, the deduction otherwise allowable under § 1.642(c)-1 or § 1.642(c)-2 is disallowed to the extent of amounts allocable to the trust's unrelated business income. See section 681(a) and the regulations thereunder.

              (e) Disallowance of deduction in certain cases. For disallowance of certain deductions otherwise allowable under section 642(c) (1), (2), or (3), see sections 508(d) and 4948(c)(4).
              (f) Information returns. For rules applicable to the annual information return that must be filed by trusts claiming a deduction under section 642(c) for the taxable year, see section 6034 and the regulations thereunder.
              (g) Payments resulting in state or local tax benefits—(1) In general. If the trust or decedent's estate makes a payment of gross income for a purpose specified in section 170(c), and the trust or decedent's estate receives or expects to receive a state or local tax benefit in consideration for such payment, § 1.170A-1(h)(3) applies in determining the charitable contribution deduction under section 642(c).
              (2) Effective/applicability date. Paragraph (g)(1) of this section applies to payments of gross income after August 27, 2018.
              [T.D. 7357, 40 FR 23741, June 2, 1975; 40 FR 24361, June 6, 1975, as amended by T.D. 7728, 45 FR 72650, Nov. 3, 1980; T.D. 9582, 77 FR 22484, Apr. 16, 2012; T.D. 9864, 84 FR 27530, June 13, 2019]

              § 1.642(c)-4
              Nonexempt private foundations.
              In the case of a trust which is, or is treated under section 4947(a)(1) as though it were, a private foundation (as defined in section 509(a) and the regulations thereunder) that is not exempt from taxation under section 501(a) for the taxable year, a deduction for amounts paid or permanently set aside, or used for a purpose specified in section 642(c) (1), or (2) shall not be allowed under § 1.642(c)-1 or § 1.642(c)-2, but such trust shall, subject to the provisions applicable to individuals, be allowed a deduction under section 170 for charitable contributions paid during the taxable year. Section 642(c)(6) and this section do not apply to a trust described in section 4947(a)(1) unless such trust fails to meet the requirements of section 508(e). However, if on October 9, 1969, or at any time thereafter, a trust is recognized as being exempt from taxation under section 501(a) as an organization described in section 501(c)(3), if at such time such trust is a private foundation, and if at any time thereafter such trust is determined not to be exempt from taxation under section 501(a) as an organization described in section 501(c)(3), section 642(c)(6) and this section will apply to such trust. See § 1.509 (b)-1 (b).
              [T.D. 7357, 40 FR 23742, June 2, 1975; 40 FR 24362, June 6, 1975]

              § 1.642(c)-5
              Definition of pooled income fund.
              (a) In general—(1) Application of provisions. Section 642(c)(5) prescribes certain rules for the valuation of contributions involving transfers to certain funds described in that section as pooled income funds. This section sets forth the requirements for qualifying as a pooled income fund and provides for the manner of allocating the income of the fund to the beneficiaries. Section 1.642(c)-6 provides for the valuation of a remainder interest in property transferred to a pooled income fund. Section 1.642(c)-7 provides transitional rules under which certain funds may be amended so as to qualify as pooled income funds in respect to transfers of property occurring after July 31, 1969.
              (2) Tax status of fund and its beneficiaries. Notwithstanding any other provision of this chapter, a fund which meets the requirements of a pooled income fund, as defined in section 642(c)(5) and paragraph (b) of this section, shall not be treated as an association within the meaning of section 7701(a)(3). Such a fund, which need not be a trust under local law, and its beneficiaries shall be taxable under part I, subchapter J, chapter 1 of the Code, but the provisions of subpart E (relating to grantors and others treated as substantial owners) of such part shall not apply to such fund.
              (3) Recognition of gain or loss on transfer to fund. No gain or loss shall be recognized to the donor on the transfer of property to a pooled income fund. In such case, the fund's basis and holding period with respect to property transferred to the fund by a donor shall be determined as provided in sections 1015(b) and 1223(2). If, however, a donor transfers property to a pooled income fund and, in addition to creating or retaining a life income interest therein, receives property from the fund, or transfers property to the fund which is subject to an indebtedness, this subparagraph shall not apply to the gain realized by reason of (i) the receipt of such property or (ii) the amount of such indebtedness, whether or not assumed by the pooled income fund, which is required to be treated as an amount realized on the transfer. For applicability of the bargain sale rules, see section 1011(b) and the regulations thereunder.
              (4) Charitable contributions deduction. A charitable contributions deduction for the value of the remainder interest, as determined under § 1.642(c)-6, may be allowed under section 170, 2055, 2106, or 2522, where there is a transfer of property to a pooled income fund. For a special rule relating to the reduction of the amount of a charitable contribution of certain ordinary income property or capital gain property, see section 170(e)(1) (A) or (B)(i) and the regulations thereunder.
              (5) Definitions. For purposes of this section, §§ 1.642(c)-6 and 1.642(c)-7:
              (i) The term income has the same meaning as it does under section 643(b) and the regulations thereunder, except that income generally may not include any long-term capital gains. However, in conformance with the applicable state statute, income may be defined as or satisfied by a unitrust amount, or pursuant to a trustee's power to adjust between income and principal to fulfill the trustee's duty of impartiality, if the state statute both provides for a reasonable apportionment between the income and remainder beneficiaries of the total return of the trust and meets the requirements of § 1.643(b)-1. In exercising a power to adjust, the trustee must allocate to principal, not to income, the proceeds from the sale or exchange of any assets contributed to the fund by any donor or purchased by the fund at least to the extent of the fair market value of those assets on the date of their contribution to the fund or of the purchase price of those assets purchased by the fund. This definition of income applies for taxable years beginning after January 2, 2004.
              (ii) The term donor includes a decedent who makes a testamentary transfer of property to a pooled income fund.
              (iii) The term governing instrument means either the governing plan under which the pooled income fund is established and administered or the instrument of transfer, as the context requires.
              (iv) The term public charity means an organization described in clause (i) to (vi) of section 170(b)(1)(A). If an organization is described in clause (i) to (vi) of section 170(b)(1)(A) and is also described in clause (viii) of such section, it shall be treated as a public charity.
              (v) The term fair market value, when used with respect to property, means its value in excess of the indebtedness or charges against such property.
              (vi) The term determination date means each day within the taxable year of a pooled income fund on which a valuation is made of the property in the fund. The property in the fund shall be valued on the first day of the taxable year of the fund and on at least 3 other days within the taxable year. The period between any two consecutive determination dates within the taxable year shall not be greater than 3 calendar months. In the case of a taxable year of less than 12 months, the property in the fund shall be valued on the first day of such taxable year and on such other days within such year as occur at successive intervals of no greater than 3 calendar months. Where a valuation date falls on a Saturday, Sunday, or legal holiday (as defined in section 7503 and the regulations thereunder), the valuation may be made on either the next preceding day which is not a Saturday, Sunday, or legal holiday or the next succeeding day which is not a Saturday, Sunday, or legal holiday, so long as the next such preceding day or next such succeeding day is consistently used where the valuation date falls on a Saturday, Sunday, or legal holiday.
              (6) Cross references. (i) See section 4947(a)(2) and section 4947(b)(3)(B) for the application to pooled income funds of the provisions relating to private foundations and section 508(e) for rules relating to provisions required in the governing instrument prohibiting certain activities specified in section 4947(a)(2).

              (ii) For rules for postponing the time for deduction of a charitable contribution of a future interest in tangible personal property, see section 170(a)(3) and the regulations thereunder.
              (b) Requirements for qualification as a pooled income fund. A pooled income fund to which this section applies must satisfy all of the following requirements:
              (1) Contribution of remainder interest to charity. Each donor must transfer property to the fund and contribute an irrevocable remainder interest in such property to or for the use of a public charity, retaining for himself, or creating for another beneficiary or beneficiaries, a life income interest in the transferred property. A contingent remainder interest shall not be treated as an irrevocable remainder interest for purposes of this subparagraph.
              (2) Creation of life income interest. Each donor must retain for himself for life an income interest in the property transferred to such fund, or create an income interest in such property for the life of one or more beneficiaries, each of whom must be living at the time of the transfer of the property to the fund by the donor. The term one or more beneficiaries includes those members of a named class who are alive and can be ascertained at the time of the transfer of the property to the fund. In the event more than one beneficiary of the income interest is designated, such beneficiaries may enjoy their shares of income concurrently, consecutively, or both concurrently and consecutively. The donor may retain the power exercisable only by will to revoke or terminate the income interest of any designated beneficiary other than the public charity. The governing instrument must specify at the time of the transfer the particular beneficiary or beneficiaries to whom the income is payable and the share of income distributable to each person so specified. The public charity to or for the use of which the remainder interest is contributed may also be designated as one of the beneficiaries of an income interest. The donor need not retain or create a life interest in all the income from the property transferred to the fund provided any income not payable under the terms of the governing instrument to an income beneficiary is contributed to, and within the taxable year in which it is received is paid to, the same public charity to or for the use of which the remainder interest is contributed. No charitable contributions deduction shall be allowed to the donor for the value of such income interest of the public charity or for the amount of any such income paid to such organization.
              (3) Commingling of property required. The property transferred to the fund by each donor must be commingled with, and invested or reinvested with, other property transferred to the fund by other donors satisfying the requirements of subparagraphs (1) and (2) of this paragraph. The governing instrument of the pooled income fund must contain a provision requiring compliance with the preceding sentence. The public charity to or for the use of which the remainder interest is contributed may maintain more than one pooled income fund, provided that each such fund is maintained by the organization and is not a device to permit a group of donors to create a fund which may be subject to their manipulation. The fund must not include property transferred under arrangements other than those specified in section 642(c)(5) and this paragraph. However, a fund shall not be disqualified as a pooled income fund under this paragraph because any portion of its properties is invested or reinvested jointly with other properties, not a part of the pooled income fund, which are held by, or for the use of, the public charity which maintains the fund, as for example, with securities in the general endowment fund of the public charity to or for the use of which the remainder interest is contributed. Where such joint investment or reinvestment of properties occurs, records must be maintained which sufficiently identify the portion of the total fund which is owned by the pooled income fund and the income earned by, and attributable to, such portion. Such a joint investment or reinvestment of properties shall not be treated as an association or partnership for purposes of the Code. A bank which serves as trustee of more than one pooled income fund may maintain a common trust fund to which section 584 applies for the collective investment and reinvestment of moneys of such funds.
              (4) Prohibition against exempt securities. The property transferred to the fund by any donor must not include any securities, the income from which is exempt from tax under subtitle A of the Code, and the fund must not invest in such securities. The governing instrument of the fund must contain specific prohibitions against accepting or investing in such securities.
              (5) Maintenance by charitable organization required. The fund must be maintained by the same public charity to or for the use of which the irrevocable remainder interest is contributed. The requirement of maintenance will be satisfied where the public charity exercises control directly or indirectly over the fund. For example, this requirement of control shall ordinarily be met when the public charity has the power to remove the trustee or trustees of the fund and designate a new trustee or trustees. A national organization which carries out its purposes through local organizations, chapters, or auxiliary bodies with which it has an identity of aims and purposes may maintain a pooled income fund (otherwise satisfying the requirements of this paragraph) in which one or more local organizations, chapters, or auxiliary bodies which are public charities have been named as recipients of the remainder interests. For example, a national church body may maintain a pooled income fund where donors have transferred property to such fund and contributed an irrevocable remainder interest therein to or for the use of various local churches or educational institutions of such body. The fact that such local organizations or chapters have been separately incorporated from the national organization is immaterial.
              (6) Prohibition against donor or beneficiary serving as trustee. The fund must not have, and the governing instrument must prohibit the fund from having, as a trustee a donor to the fund or a beneficiary (other than the public charity to or for the use of which the remainder interest is contributed) of an income interest in any property transferred to such fund. Thus, if a donor or beneficiary (other than such public charity) directly or indirectly has general responsibilities with respect to the fund which are ordinarily exercised by a trustee, such fund does not meet the requirements of section 642(c)(5) and this paragraph. The fact that a donor of property to the fund, or a beneficiary of the fund, is a trustee, officer, director, or other official of the public charity to or for the use of which the remainder interest is contributed ordinarily will not prevent the fund from meeting the requirements of section 642(c)(5) and this paragraph.
              (7) Income of beneficiary to be based on rate of return of fund. Each beneficiary entitled to income of any taxable year of the fund must receive such income in an amount determined by the rate of return earned by the fund for such taxable year with respect to his income interest, computed as provided in paragraph (c) of this section. The governing instrument of the fund shall direct the trustee to distribute income currently or within the first 65 days following the close of the taxable year in which the income is earned. Any such payment made after the close of the taxable year shall be treated as paid on the last day of the taxable year. A statement shall be attached to the return of the pooled income fund indicating the date and amount of such payments after the close of the taxable year. Subject to the provisions of part I, subchapter J, chapter 1 of the Code, the beneficiary shall include in his gross income all amounts properly paid, credited, or required to be distributed to the beneficiary during the taxable year or years of the fund ending within or with his taxable year. The governing instrument shall provide that the income interest of any designated beneficiary shall either terminate with the last regular payment which was made before the death of the beneficiary or be prorated to the date of his death.
              (8) Termination of life income interest. Upon the termination of the income interest retained or created by any donor, the trustee shall sever from the fund an amount equal to the value of the remainder interest in the property upon which the income interest is based. The value of the remainder interest for such purpose may be either (i) its value as of the determination date next succeeding the termination of the income interest or (ii) its value as of the date on which the last regular payment was made before the death of the beneficiary if the income interest is terminated on such payment date. The amount so severed from the fund must either be paid to, or retained for the use of, the designated public charity, as provided in the governing instrument. However, see subparagraph (3) of this paragraph for rules relating to commingling of property.
              (c) Allocation of income to beneficiary—(1) In general. Every income interest retained or created in property transferred to a pooled income fund shall be assigned a proportionate share of the annual income earned by the fund, such share, or unit of participation, being based on the fair market value of such property on the date of transfer, as provided in this paragraph.
              (2) Units of participation—(i) Unit plan. (a) On each transfer of property by a donor to a pooled income fund, one or more units of participation in the fund shall be assigned to the beneficiary or beneficiaries of the income interest retained or created in such property, the number of units of participation being equal to the number obtained by dividing the fair market value of the property by the fair market value of a unit in the fund at the time of the transfer.
              (b) The fair market value of a unit in the fund at the time of the transfer shall be determined by dividing the fair market value of all property in the fund at such time by the number of units then in the fund. The initial fair market value of a unit in a pooled income fund shall be the fair market value of the property transferred to the fund divided by the number of units assigned to the income interest in that property. The value of each unit of participation will fluctuate with each new transfer of property to the fund in relation to the appreciation or depreciation in the fair market value of the property in the fund, but all units in the fund will always have equal value.
              (c) The share of income allocated to each unit of participation shall be determined by dividing the income of the fund for the taxable year by the outstanding number of units in the fund at the end of such year, except that, consistently with paragraph (b)(7) of this section, income shall be allocated to units outstanding during only part of such year by taking into consideration the period of time such units are outstanding. For this purpose the actual income of such part of the taxable year, or a prorated portion of the annual income, may be used, after making such adjustments as are reasonably necessary to reflect fluctuations during the year in the fair market value of the property in the fund.
              (ii) Other plans. The governing instrument of the fund may provide any other reasonable method not described in subdivision (i) of this subparagraph for assigning units of participation in the fund and allocating income to such units which reaches a result reasonably consistent with the provisions of such subdivision.
              (iii) Transfers between determination dates. For purposes of subdivisions (i) and (ii) of this subparagraph, if a transfer of property to the fund by a donor occurs on other than a determination date, the number of units of participation assigned to the income interest in such property may be determined by using the fair market value of the property in the fund on the determination date immediately preceding the date of transfer (determined without regard to the property so transferred), subject, however, to appropriate adjustments on the next succeeding determination date. Such adjustments may be made by any reasonable method, including the use of a method whereby the fair market value of the property in the fund at the time of the transfer is deemed to be the average of the fair market values of the property in the fund on the determination dates immediately preceding and succeeding the date of transfer. For purposes of determining such average any property transferred to the fund between such preceding and succeeding dates, or on such succeeding date, shall be excluded. The application of this subdivision may be illustrated by the following example:

                Example.

                The determination dates of a pooled income fund are the first day of each calendar month. On April 1, 1971, the fair market value of the property in the fund is $100,000, at which time 1,000 units of participation are outstanding with a value of $100 each. On April 15, 1971, B transfers property with a fair market value of $50,000 to the fund, retaining for himself for life an income interest in such property. No other property is transferred to the fund after April 1, 1971. On May 1, 1971, the fair market value of the property in the fund, including the property transferred by B, is $160,000. The average of the fair market values of the property in the fund (excluding the property transferred by B) on April 1 and May 1, 1971, is $105,000 ($100,000 + [$160,000−$50,000] ÷ 2). Accordingly, the fair market value of a unit of participation in the fund on April 15, 1971, at the time of B's transfer may be deemed to be $105 ($105,000/1,000 units), and B is assigned 476.19 units of participation in the fund ($50,000/$105).

              (3) Special rule for partial allocation of income to charity. Notwithstanding subparagraph (2) of this paragraph, the governing instrument may provide that a unit of participation is entitled to share in the income of the fund in a lesser amount than would otherwise be determined under such subparagraph, provided that the income otherwise allocable to the unit under such subparagraph is paid within the taxable year in which it is received to the public charity to or for the use of which the remainder interest is contributed under the governing instrument.
              (4) Illustrations. The application of this paragraph may be illustrated by the following examples:

                Example 1.
                On July 1, 1970, A and B transfer separate properties with a fair market value of $20,000 and $10,000, respectively, to a newly created pooled income fund which is maintained by Y University and uses as its taxable year the fiscal year ending June 30. A and B each retain in themselves for life an income interest in such property, the remainder interest being contributed to Y University. The pooled income fund assigns an initial value of $100 to each unit of participation in the fund, and under the governing instruments A receives 200 units, and B receives 100 units, in the fund. On October 1, 1970, which is a determination date, C transfers property to the fund with a fair market value of $12,000, retaining in himself for life an income interest in such property and contributing the remainder interest to Y University. The fair market value of the property in the fund at the time of C's transfer is $36,000. The fair market value of A's and B's units at the time of such transfer is $120 each ($36,000 / 300). By reason of his transfer of property C is assigned 100 units of participation in the fund ($12,000 / $120).

                Example 2.
                Assume that the pooled income fund in example 1 earns $2,600 for its taxable year ending June 30, 1971, and there are no further contributions of property to the fund in such year. Further assume $300 is earned in the first quarter ending September 30, 1970. Therefore, the fund earns $1 per unit for the first quarter ($300 divided by 300 units outstanding) and $5.75 per unit for the remainder of the taxable year ([$2,600 − $300] divided by 400 units outstanding). If the fund distributes its income for the year based on its actual earnings per quarter, the income must be distributed as follows:

                      Beneficiary

                      Share of income

                    A
                    $1,350 ([200 × $1] + [200 × $5.75]).

                    B
                    $675 ([100 × $1] + [100 × $5.75]).

                    C
                    $575 (100 × $5.75).

                Example 3.
                (a) On July 1, 1970, A and B transfer separate properties with a fair market value of $10,000 and $20,000, respectively, to a newly created pooled income fund which is maintained by X University and uses as its taxable year the fiscal year ending June 30. A and B each retain in themselves an income interest for life in such property, the remainder interest being contributed to X University. The governing instrument provides that each unit of participation in the fund shall have a value of not more than its initial fair market value; the instrument also provides that the income allocable to appreciation in the fair market value of such unit (to the extent in excess of its initial fair market value) at the end of each quarter of the fiscal year is to be distributed currently to X University. On October 1, 1970, which is a determination date, C contributes to the fund property with a fair market value of $60,000 and retains in himself an income interest for life in such property, the remainder interest being contributed to X University. The initial fair market value of the units assigned to A, B, and C is $100. A, B, and C's units of participation are as follows:

                      Beneficiary

                      Units of participation

                    A
                    100 ($10,000 divided by $100).

                    B
                    200 ($20,000 divided by $100).

                    C
                    100 ($10,000 divided by $100).

                (b) The fair market value of the property in the fund at the time of C's contribution is $40,000. Assuming the fair market value of the property in the fund is $100,000 on December 31, 1970, and that the income of the fund for the second quarter ending December 31, 1970, is $2,000, the income is shared by the income beneficiaries and X University as follows:

                      Beneficiary

                      Allocation of income

                    A, B, and C
                    90% ($90,000 divided by $100,000).

                    X University
                    10% ($10,000 divided by $100,000).

                (c) For the quarter ending December 31, 1970, each unit of participation is allocated $2 (90 percent × $2,000 divided by 900) of the income earned for that quarter. A, B, C, and X University share in the income as follows:

                      Beneficiary

                      Share of income

                    A
                    $200 (100 × $2).

                    B
                    $400 (200 × $2).

                    C
                    $1,200 (600 × $2).

                    X University
                    $200 (10% × $2,000).

              [T.D. 7105, 36 FR 6477, Apr. 6, 1971; 36 FR 7004, Apr. 13, 1971, as amended by T.D. 7125, 36 FR 11032, June 8, 1971; T.D. 7357, 40 FR 23742, June 2, 1975; T.D. 7633, 44 FR 57925, Oct. 9, 1979; T.D. 9102, 69 FR 18, Jan. 2, 2004]

              § 1.642(c)-6
              Valuation of a remainder interest in property transferred to a pooled income fund.
              (a) In general. (1) For purposes of sections 170, 2055, 2106, and 2522, the fair market value of a remainder interest in property transferred to a pooled income fund is its present value determined under paragraph (d) of this section.
              (2) The present value of a remainder interest at the time of the transfer of property to the pooled income fund is determined by computing the present value (at the time of the transfer) of the life income interest and subtracting that value from the fair market value of the transferred property on the valuation date. The fact that the income beneficiary may not receive the last income payment, as provided in paragraph (b)(7) of § 1.642(c)-5, is not taken into account for purposes of determining the value of the life income interest. For purposes of this section, the valuation date is the date on which property is transferred to the fund by the donor except that, for purposes of section 2055 or 2106, it is the alternate valuation date, if elected, under the provisions and limitations set forth in section 2032 and the regulations thereunder.
              (3) Any claim for a deduction on any return for the value of the remainder interest in property transferred to a pooled income fund must be supported by a statement attached to the return showing the computation of the present value of the interest.
              (b) Actuarial computations by the Internal Revenue Service. The regulations in this and in related sections provide tables of actuarial factors and examples that illustrate the use of the tables in determining the value of remainder interests in property. Section 1.7520-1(c)(2) refers to government publications that provide additional tables of factors and examples of computations for more complex situations. If the computation requires the use of a factor that is not provided in this section, the Commissioner may supply the factor upon a request for a ruling. A request for a ruling must be accompanied by a recitation of the facts including the pooled income fund's highest yearly rate of return for the 3 taxable years immediately preceding the date of transfer, the date of birth of each measuring life, and copies of the 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) of this chapter) and include payment of the required user fee. If the Commissioner furnishes the factor, a copy of the letter supplying the factor should be attached to the tax return in which the deduction is claimed. If the Commissioner does not furnish the factor, the taxpayer must furnish a factor computed in accordance with the principles set forth in this section.
              (c) Computation of pooled income fund's yearly rate of return. (1) For purposes of determining the present value of the life income interest, the yearly rate of return earned by a pooled income fund for a taxable year is the percentage obtained by dividing the amount of income earned by the pooled income fund for the taxable year by an amount equal to—
              (i) The average fair market value of the property in such fund for that taxable year; less
              (ii) The corrective term adjustment.

              (2) The average fair market value of the property in a pooled income fund for a taxable year shall be the sum of the amounts of the fair market value of all property held by the pooled income fund on each determination date, as defined in paragraph (a)(5)(vi) of § 1.642(c)-5, of such taxable year divided by the number of determination dates in such taxable year. For such purposes the fair market value of property held by the fund shall be determined without including any income earned by the fund.
              (3)(i) The corrective term adjustment shall be the sum of the products obtained by multiplying each income payment made by the pooled income fund within its taxable year by the percentage set forth in column (2) of the following table opposite the period within such year, set forth in column (1), which includes the date on which that payment is made:

                Table

                  (1) Payment period

                  (2) Percentage of payment

                  Last week of 4th quarter
                  0

                  Balance of 4th quarter
                  25

                  Last week of 3d quarter
                  25

                  Balance of 3d quarter
                  50

                  Last week of 2d quarter
                  50

                  Balance of 2d quarter
                  75

                  Last week of 1st quarter
                  75

                  Balance of 1st quarter
                  100

              (ii) If the taxable year of the fund consists of less than 12 months, the corrective term adjustment shall be the sum of the products obtained by multiplying each income payment made by the pooled income fund within such taxable year by the percentage obtained by subtracting from 1 a fraction the numerator of which is the number of days from the first day of such taxable year to the date of such income payment and the denominator of which is 365.
              (4) A pooled income fund's method of calculating its yearly rate of return must be supported by a full statement attached to the income tax return of the pooled income fund for each taxable year.

              (5) The application of this paragraph may be illustrated by the following examples:

                Example 1.
                (a) The pooled income fund maintained by W University has established determination dates on the first day of each calendar quarter. The pooled income fund is on a calendar-year basis. The pooled income fund earned $5,000 of income during 1971. The fair market value of its property (determined without including any income earned by the fund), and the income paid out, on the first day of each calendar quarter in 1971 are as follows:

                    Date
                    Fair market value of property
                    Income payment

                    Jan. 1
                    $100,000
                    $1,200

                    Apr. 1
                    105,000
                    1,200

                    July 1
                    95,000
                    1,200

                    Oct. 1
                    100,000
                    1,400

                    400,000
                    5,000

                (b) The average fair market value of the property in the fund for 1971 is $100,000 ($400,000, divided by 4).
                (c) The corrective term adjustment for 1971 is $3,050, determined by applying the percentages obtained in column (2) of the table in subparagraph (3) of this paragraph:

                      Multiplication:

                      Product

                    100% × $1,200
                    $1,200

                    75% × $1,200
                    900

                    50% × $1,200
                    600

                    25% × $1,400
                    350

                    Sum of products
                    3,050

                (d) The pooled income fund's yearly rate of return for 1971 is 5.157 percent, determined as follows:

                $5,000 ÷ $100,000 − $3,050 = 0.05157

                Example 2.
                (a) The pooled income fund maintained by X University has established determination dates on the first day of each calendar quarter. The pooled income fund is on a calendar-year basis. The pooled income fund earned $5,000 of income during 1971 and paid out $3,000 on December 15, 1971, and $2,000 on January 15, 1972, the last amount being treated under paragraph (b)(7) of § 1.642(c)-5 as paid on December 31, 1971. The fair market value of its property (determined without including any income earned by the fund) on the determination dates in 1971 and the income paid out during 1971 are as follows:

                    Date
                    Fair market value of property
                    Income payment

                    Jan. 1
                    $125,000

                    Apr. 1
                    125,000

                    July 1
                    75,000

                    Oct. 1
                    75,000

                    Dec. 15

                    $3,000

                    Dec. 31

                    2,000

                    400,000
                    5,000

                (b) The average fair market value of the property in the fund for 1971 is $100,000 ($400,000 divided by 4).

                (c) The corrective term adjustment for 1971 is $750, determined by applying the percentages obtained in column (2) of the table in subparagraph (3) of this paragraph:

                      Product

                    Multiplication:

                    0% × $2,000

                    25% × $3,000
                    $750

                    Sum of products
                    750

                (d) The pooled income fund's yearly rate of return for 1971 is 5.038 percent, determined as follows:

                $5,000 ÷ $100,000 − $750 = 0.05038

              (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
                  After
                  Before
                  Applicable 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 appropriate yearly rate of return 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 § 20.2031-7(d)(7) of this chapter (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 paragraph (c) of this section 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 is available, at no charge, electronically via the IRS Internet site at http://www.irs.gov. For other situations, see paragraph (b) of this section. 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:

                ER10AU11.001

              (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:

                ER10AU11.002

                ER10AU11.003

                ER10AU11.004

                ER10AU11.005

                ER10AU11.006

                ER10AU11.007

                ER10AU11.008

                ER10AU11.009

                ER10AU11.010

                ER10AU11.011

                ER10AU11.012

                ER10AU11.013

                ER10AU11.014

                ER10AU11.015

                ER10AU11.016

                ER10AU11.017

                ER10AU11.018

                ER10AU11.019

                ER10AU11.020

                ER10AU11.021

                ER10AU11.022

              (f) Effective/applicability date. This section applies on and after May 1, 2009.
              [T.D. 7105, 36 FR 6480, Apr. 6, 1971; 36 FR 9512, May 26, 1971; 36 FR 12290, June 30, 1971, as amended by T.D. 7955, 49 FR 19976, May 11, 1984; T.D. 8540, 59 FR 30105, June 10, 1994; T.D. 8819, 64 FR 23190, Apr. 30, 1999; T.D. 8886, 65 FR 36910, June 12, 2000; T.D. 9448, 74 FR 21440, May 7, 2009; T.D. 9540, 76 FR 49572, Aug. 10, 2011]

              § 1.642(c)-7
              Transitional rules with respect to pooled income funds.
              (a) In general—(1) Amendment of certain funds. A fund created before May 7, 1971, and not otherwise qualifying as a pooled income fund may be treated as a pooled income fund to which § 1.642(c)-5 applies if on July 31, 1969, or on each date of transfer of property to the fund occurring after July 31, 1969, it possessed the initial characteristics described in paragraph (b) of this section and is amended, in the time and manner provided in paragraph (c) of this section, to meet all the requirements of section 642(c)(5) and § 1.642(c)-5. If a fund to which this subparagraph applies is amended in the time and manner provided in paragraph (c) of this section it shall be treated as provided in paragraph (d) of this section for the period beginning on August 1, 1969, or, if later, on the date of its creation and ending the day before the date on which it meets the requirements of section 642(c)(5) and § 1.642(c)-5.
              (2) Severance of a portion of a fund. Any portion of a fund created before May 7, 1971, which consists of property transferred to such fund after July 31, 1969, may be severed from such fund consistently with the principles of paragraph (c)(2) of this section and established before January 1, 1972, as a separate pooled income fund, provided that on and after the date of severance the severed fund meets all the requirements of section 642(c)(5) and § 1.642(c)-5. A separate fund which is established pursuant to this subparagraph shall be treated as provided in paragraph (d) of this section for the period beginning on the day of the first transfer of property which becomes part of the separate fund and ending the day before the day on which the separate fund meets the requirements of section 642(c)(5) and § 1.642(c)-5.
              (b) Initial characteristics required. A fund described in paragraph (a)(1) of this section shall not be treated as a pooled income fund to which section 642(c)(5) applies, even though it is amended as provided in paragraph (c) of this section, unless it possessed the following characteristics on July 31, 1969, or on each date of transfer of property to the fund occurring after July 31, 1969:
              (1) It satisfied the requirements of section 642(c)(5)(A) other than that the fund be a trust;
              (2) It was constituted in a way to attract and contain commingled properties transferred to the fund by more than one donor satisfying such requirements; and
              (3) Each beneficiary of a life income interest which was retained or created in any property transferred to the fund was entitled to receive, but not less often than annually, a proportional share of the annual income earned by the fund, such share being based on the fair market value of the property in which such life interest was retained or created.
              (c) Amendment requirements. (1) A fund described in paragraph (a)(1) of this section and possessing the initial characteristics described in paragraph (b) of this section on the date prescribed therein shall be treated as a pooled income fund if it is amended to meet all the requirements of section 642(c)(5) and § 1.642(c)-5 before January 1, 1972, or, if later, on or before the 30th day after the date on which any judicial proceedings commenced before January 1, 1972, which are required to amend its governing instrument or any other instrument which does not permit it to meet such requirements, become final. However, see paragraph (d) of this section for limitation on the period in which a claim for credit or refund may be filed.

              (2) In addition, if the transferred property described in paragraph (b)(2) of this section is commingled with other property, the transferred property must be separated on or before the date specified in subparagraph (1) of this paragraph from the other property and allocated to the fund in accordance with the transferred property's percentage share of the fair market value of the total commingled property on the date of separation. The percentage share shall be the ratio which the fair market value of the transferred property on the date of separation bears to the fair market value of the total commingled property on that date and shall be computed in a manner consistent with paragraph (c) of § 1.642(c)-5. The property which is so allocated to the fund shall be treated as property received from transfers which meet the requirements of section 642(c)(5), and such transfers shall be treated as made on the dates on which the properties giving rise to such allocation were transferred to the fund by the respective donors. The property so allocated to the fund must be representative of all the commingled property other than securities the income from which is exempt from tax under subtitle A of the Code; compensating increases in other commingled property allocated to the fund shall be made where such tax-exempt securities are not allocated to the fund. The application of this subparagraph may be illustrated by the following example:

                Example.
                (a) The trustees of X fund are in the process of amending it in order to qualify as a pooled income fund. The property transferred to the X fund was commingled with other property transferred to the organization by which the fund was established. After taking into account the various transfers and the appreciation in the fair market value of all the properties, the fair market value of the property allocated to the fund on the various transfer dates is set forth in the following schedule and determined in the manner indicated:

                    Transfers

                    Date of transfer
                    Value of all property before transfer
                    (1)
                    Trust property
                    (2)
                    Other property
                    (3)
                    Value of all property after transfer
                    (4)
                    Property allocated to fund
                    (5)

                    January 1, 1968

                    $100,000
                    $100,000
                    $200,000

                      1 $100,000

                    September 30, 1968
                    $300,000
                    100,000

                    400,000

                      2 250,000

                    January 15, 1969
                    480,000
                    60,000

                    540,000

                      3 360,000

                    November 11, 1969
                    600,000
                    200,000

                    800,000

                      4 600,000

                    1 $100,000 = (the amount in column (2)).

                    2 $250,000 = ([$100,000/$200,000 × $300,000] + $100,000).

                    3 $360,000 = ([$250,000/$400,000 × $480,000] + $60,000).

                    4 $600,000 = ([$360,000/$540,000 × $600,000] + $200,000).

                (b) On September 30, 1970, the trustees decide to separate the property of X fund from the other property. The fair market value of all the commingled property is $1 million on September 30, 1970, and there were no additional transfers to the fund after November 11, 1969. Accordingly, the fair market value of the property required to be allocated to X fund must be $750,000 ($600,000/$800,000 × $1,000,000), and X fund's percentage share of the commingled property is 75 percent ($750,000/$1,000,000). Accordingly, assuming that the commingled property consists of Y stock with a fair market value of $800,000 and Z bonds with a fair market value of $200,000, there must be allocated to X fund at the close of September 30, 1970, Y stock with a value of $600,000 ($800,000 × 75%) and Z bonds with a value of $150,000 ($200,000 × 75%).

              (d) Transactions before amendment of or severance from fund. (1) A fund which is amended pursuant to paragraph (c) of this section, or is severed from a fund pursuant to paragraph (a)(2) of this section, shall be treated for all purposes, including the allowance of a deduction for any charitable contribution, as if it were before its amendment or severance a pooled income fund to which section 642(c)(5) and § 1.642(c)-5 apply. Thus, for example, where a donor transferred property in trust to such an amended or severed fund on August 1, 1969, but before its amendment or severance under this section, a charitable contributions deduction for the value of the remainder interest may be allowed under section 170, 2055, 2106, or 2522. The deduction may not be allowed, however, until the fund is amended or severed pursuant to this section and shall be allowed only if a claim for credit or refund is filed within the period of limitation prescribed by section 6511(a).

              (2) For purposes of determining under § 1.642(c)-6 the highest yearly rate of return earned by a fund (which is amended pursuant to paragraph (c) of this section) for the 3 preceding taxable years, taxable years of the fund preceding its taxable year in which the fund is so amended and qualifies as a pooled income fund under this section shall be used provided that the fund did not at any time during such preceding years hold any investments in securities the income from which is exempt from tax under subtitle A of the Code. If any such tax-exempt securities were held during such period by such amended fund, or if the fund consists of a portion of a fund which is severed pursuant to paragraph (a)(2) of this section, the highest yearly rate of return under § 1.642(c)-6 shall be determined by treating the fund as a pooled income fund which has been in existence for less than 3 taxable years preceding the taxable year in which the transfer of property to the fund is made.
              (3) Property transferred to a fund before its amendment pursuant to paragraph (c) of this section, or before its severance under paragraph (a)(2) of this section, shall be treated as property received from transfers which meet the requirements of section 642(c)(5).
              [T.D. 7105, 36 FR 6486, Apr. 6, 1971, as amended by T.D. 7125, 36 FR 11032, June 8, 1971; T.D. 8540, 59 FR 30102, June 10, 1994]

              § 1.642(d)-1
              Net operating loss deduction.
              The net operating loss deduction allowed by section 172 is available to estates and trusts generally, with the following exceptions and limitations:
              (a) In computing gross income and deductions for the purposes of section 172, a trust shall exclude that portion of the income and deductions attributable to the grantor or another person under sections 671 through 678 (relating to grantors and others treated as substantial owners).
              (b) An estate or trust shall not, for the purposes of section 172, avail itself of the deductions allowed by section 642(c) (relating to charitable contributions deductions) and sections 651 and 661 (relating to deductions for distributions).

              § 1.642(e)-1
              Depreciation and depletion.

              An estate or trust is allowed the deductions for depreciation and depletion, but only to the extent the deductions are not apportioned to beneficiaries under sections 167(h) and 611(b). For purposes of sections 167(h) and 611(b), the term beneficiaries includes charitable beneficiaries. See the regulations under those sections.
              [T.D. 6712, 29 FR 3655, Mar. 24, 1964]

              § 1.642(f)-1
              Amortization deductions.
              An estate or trust is allowed amortization deductions with respect to an emergency facility as defined in section 168(d), with respect to a certified pollution control facility as defined in section 169(d), with respect to qualified railroad rolling stock as defined in section 184(d), with respect to certified coal mine safety equipment as defined in section 187(d), with respect to on-the-job training and child-care facilities as defined in section 188(b), and with respect to certain rehabilitations of certified historic structures as defined in section 191, in the same manner and to the same extent as in the case of an individual. However, the principles governing the apportionment of the deductions for depreciation and depletion between fiduciaries and the beneficiaries of an estate or trust (see sections 167(h) and 611(b) and the regulations thereunder) shall be applicable with respect to such amortization deductions.
              [T.D. 7700, 45 FR 38055, June 6, 1980]

              § 1.642(g)-1
              Disallowance of double deductions; in general.

              Amounts allowable under section 2053(a)(2) (relating to administration expenses) or under section 2054 (relating to losses during administration) as deductions in computing the taxable estate of a decedent are not allowed as deductions in computing the taxable income of the estate unless there is filed a statement, in duplicate, to the effect that the items have not been allowed as deductions from the gross estate of the decedent under section 2053 or 2054 and that all rights to have such items allowed at any time as deductions under section 2053 or 2054 are waived. The statement should be filed with the return for the year for which the items are claimed as deductions or with the district director for the internal revenue district in which the return was filed, for association with the return. The statement may be filed at any time before the expiration of the statutory period of limitation applicable to the taxable year for which the deduction is sought. Allowance of a deduction in computing an estate's taxable income is not precluded by claiming a deduction in the estate tax return, so long as the estate tax deduction is not finally allowed and the statement is filed. However, after a statement is filed under section 642(g) with respect to a particular item or portion of an item, the item cannot thereafter be allowed as a deduction for estate tax purposes since the waiver operates as a relinquishment of the right to have the deduction allowed at any time under section 2053 or 2054.

              § 1.642(g)-2
              Deductions included.
              It is not required that the total deductions, or the total amount of any deduction, to which section 642(g) is applicable be treated in the same way. One deduction or portion of a deduction may be allowed for income tax purposes if the appropriate statement is filed, while another deduction or portion is allowed for estate tax purposes. Section 642(g) has no application to deductions for taxes, interest, business expenses, and other items accrued at the date of a decedent's death so that they are allowable as a deduction under section 2053(a)(3) for estate tax purposes as claims against the estate, and are also allowable under section 691(b) as deductions in respect of a decedent for income tax purposes. However, section 642(g) is applicable to deductions for interest, business expenses, and other items not accrued at the date of the decedent's death so that they are allowable as deductions for estate tax purposes only as administration expenses under section 2053(a)(2). Although deductible under section 2053(a)(3) in determining the value of the taxable estate of a decedent, medical, dental, etc., expenses of a decedent which are paid by the estate of the decedent are not deductible in computing the taxable income of the estate. See section 213(d) and the regulations thereunder for rules relating to the deductibility of such expenses in computing the taxable income of the decedent.

              § 1.642(h)-1
              Unused loss carryovers on termination of an estate or trust.
              (a) If, on the final termination of an estate or trust, a net operating loss carryover under section 172 or a capital loss carryover under section 1212 would be allowable to the estate or trust in a taxable year subsequent to the taxable year of termination but for the termination, the carryover or carryovers are allowed under section 642(h)(1) to the beneficiaries succeeding to the property of the estate or trust. See § 1.641(b)-3 for the determination of when an estate or trust terminates.

              (b) The net operating loss carryover and the capital loss carryover are the same in the hands of a beneficiary as in the estate or trust, except that the capital loss carryover in the hands of a beneficiary which is a corporation is a short-term loss irrespective of whether it would have been a long-term or short-term capital loss in the hands of the estate or trust. The net operating loss carryover and the capital loss carryover are taken into account in computing taxable income, adjusted gross income, and the tax imposed by section 56 (relating to the minimum tax for tax preferences). The first taxable year of the beneficiary to which the loss shall be carried over is the taxable year of the beneficiary in which or with which the estate or trust terminates. However, for purposes of determining the number of years to which a net operating loss, or a capital loss under paragraph (a) of § 1.1212-1, may be carried over by a beneficiary, the last taxable year of the estate or trust (whether or not a short taxable year) and the first taxable year of the beneficiary to which a loss is carried over each constitute a taxable year, and, in the case of a beneficiary of an estate or trust that is a corporation, capital losses carried over by the estate or trust to any taxable year of the estate or trust beginning after December 31, 1963, shall be treated as if they were incurred in the last taxable year of the estate or trust (whether or not a short taxable year). For the treatment of the net operating loss carryover when the last taxable year of the estate or trust is the last taxable year to which such loss can be carried over, see § 1.642(h)-2.

              (c) The application of this section may be illustrated by the following examples:

                Example 1.
                A trust distributes all of its assets to A, the sole remainderman, and terminates on December 31, 1954, when it has a capital loss carryover of $10,000 attributable to transactions during the taxable year 1952. A, who reports on the calendar year basis, otherwise has ordinary income of $10,000 and capital gains of $4,000 for the taxable year 1954. A would offset his capital gains of $4,000 against the capital loss of the trust and, in addition, deduct under section 1211(b) $1,000 on his return for the taxable year 1954. The balance of the capital loss carryover of $5,000 may be carried over only to the years 1955 and 1956, in accordance with paragraph (a) of § 1.1212-1 and the rules of this section.

                Example 2.
                A trust distributes all of its assets, one-half to A, an individual, and one-half to X, a corporation, who are the sole remaindermen, and terminates on December 31, 1966, when it has a short-term capital loss carryover of $20,000 attributable to short-term transactions during the taxable years 1964, 1965, and 1966, and a long-term capital loss carryover of $12,000 attributable to long-term transactions during such years. A, who reports on the calendar year basis, otherwise has ordinary income of $15,000, short-term capital gains of $4,000 and long-term capital gains of $6,000, for the taxable year 1966. A would offset his short-term capital gains of $4,000 against his share of the short-term capital loss carryover of the trust, $10,000 (one-half of $20,000), and, in addition deduct under section 1211(b) $1,000 (treated as a short-term gain for purposes of computing capital loss carryovers) on his return for the taxable year 1966. A would also offset his long-term capital gains of $6,000 against his share of the long-term capital loss carryover of the trust, $6,000 (one-half of $12,000). The balance of A's share of the short-term capital loss carryover, $5,000, may be carried over as a short-term capital loss carryover to the succeeding taxable year and treated as a short-term capital loss incurred in such succeeding taxable year in accordance with paragraph (b) of § 1.1212-1. X, which also reports on the calendar year basis, otherwise has capital gains of $4,000 for the taxable year 1966. X would offset its capital gains of $4,000 against its share of the capital loss carryovers of the trust, $16,000 (the sum of one-half of each the short-term carryover and the long-term carryover of the trust), on its return for the taxable year 1966. The balance of X's share, $12,000, may be carried over as a short-term capital loss only to the years 1967, 1968, 1969, and 1970, in accordance with paragraph (a) of § 1.1212-1 and the rules of this section.

              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6828, 30 FR 7805, June 17, 1965; T.D. 7564, 43 FR 40495, Sept. 12, 1978]

              § 1.642(h)-2
              Excess deductions on termination of an estate or trust.
              (a) If, on the termination of an estate or trust, the estate or trust has for its last taxable year deductions (other than the deductions allowed under section 642(b) (relating to personal exemption) or section 642(c) (relating to charitable contributions)) in excess of gross income, the excess is allowed under section 642(h)(2) as a deduction to the beneficiaries succeeding to the property of the estate or trust. The deduction is allowed only in computing taxable income and must be taken into account in computing the items of tax preference of the beneficiary; it is not allowed in computing adjusted gross income. The deduction is allowable only in the taxable year of the beneficiary in which or with which the estate or trust terminates, whether the year of termination of the estate or trust is of normal duration or is a short taxable year. For example: Assume that a trust distributes all of its assets to B and terminates on December 31, 1954. As of that date it has excess deductions, for example, because of corpus commissions on termination, of $18,000. B, who reported on the calendar year basis, could claim the $18,000 as a deduction for the taxable year 1954. However, if the deduction (when added to his other deductions) exceeds his gross income, the excess may not be carried over to the year 1955 or subsequent years.

              (b) A deduction based upon a net operating loss carryover will never be allowed to beneficiaries under both paragraphs (1) and (2) of section 642(h). Accordingly, a net operating loss deduction which is allowable to beneficiaries succeeding to the property of the estate or trust under the provisions of paragraph (1) of section 642(h) cannot also be considered a deduction for purposes of paragraph (2) of section 642(h) and paragraph (a) of this section. However, if the last taxable year of the estate or trust is the last year in which a deduction on account of a net operating loss may be taken, the deduction, to the extent not absorbed in that taxable year by the estate or trust, is considered an “excess deduction” under section 642(h)(2) and paragraph (a) of this section.
              (c) Any item of income or deduction, or any part thereof, which is taken into account in determining the net operating loss or capital loss carryover of the estate or trust for its last taxable year shall not be taken into account again in determining excess deductions on termination of the trust or estate within the meaning of section 642(h)(2) and paragraph (a) of this section (see example in § 1.642(h)-5).
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 7564, 43 FR 40495, Sept. 12, 1978]

              § 1.642(h)-3
              Meaning of “beneficiaries succeeding to the property of the estate or trust”.
              (a) The phrase beneficiaries succeeding to the property of the estate or trust means those beneficiaries upon termination of the estate or trust who bear the burden of any loss for which a carryover is allowed, or of any excess of deductions over gross income for which a deduction is allowed, under section 642(h).
              (b) With reference to an intestate estate, the phrase means the heirs and next of kin to whom the estate is distributed, or if the estate is insolvent, to whom it would have been distributed if it had not been insolvent. If a decedent's spouse is entitled to a specified dollar amount of property before any distribution to other heirs and next of kin, and if the estate is less than that amount, the spouse is the beneficiary succeeding to the property of the estate or trust to the extent of the deficiency in amount.
              (c) In the case of a testate estate, the phrase normally means the residuary beneficiaries (including a residuary trust), and not specific legatees or devisees, pecuniary legatees, or other nonresiduary beneficiaries. However, the phrase does not include the recipient of a specific sum of money even though it is payable out of the residue, except to the extent that it is not payable in full. On the other hand, the phrase includes a beneficiary (including a trust) who is not strictly a residuary beneficiary but whose devise or bequest is determined by the value of the decedent's estate as reduced by the loss or deductions in question. Thus the phrase includes:
              (1) A beneficiary of a fraction of a decedent's net estate after payment of debts, expenses, etc.;
              (2) A nonresiduary legatee or devisee, to the extent of any deficiency in his legacy or devise resulting from the insufficiency of the estate to satisfy it in full;
              (3) A surviving spouse receiving a fractional share of an estate in fee under a statutory right of election, to the extent that the loss or deductions are taken into account in determining the share. However, the phrase does not include a recipient of dower or curtesy, or any income beneficiary of the estate or trust from which the loss or excess deduction is carried over.
              (d) The principles discussed in paragraph (c) of this section are equally applicable to trust beneficiaries. A remainderman who receives all or a fractional share of the property of a trust as a result of the final termination of the trust is a beneficiary succeeding to the property of the trust. For example, if property is transferred to pay the income to A for life and then to pay $10,000 to B and distribute the balance of the trust corpus to C, C and not B is considered to be the succeeding beneficiary except to the extent that the trust corpus is insufficient to pay B $10,000.

              § 1.642(h)-4
              Allocation.

              The carryovers and excess deductions to which section 642(h) applies are allocated among the beneficiaries succeeding to the property of an estate or trust (see § 1.642(h)-3) proportionately according to the share of each in the burden of the loss or deductions. A person who qualified as a beneficiary succeeding to the property of an estate or trust with respect to one amount and does not qualify with respect to another amount is a beneficiary succeeding to the property of the estate or trust as to the amount with respect to which he qualifies. The application of this section may be illustrated by the following example:

                Example.
                A decedent's will leaves $100,000 to A, and the residue of his estate equally to B and C. His estate is sufficient to pay only $90,000 to A, and nothing to B and C. There is an excess of deductions over gross income for the last taxable year of the estate or trust of $5,000, and a capital loss carryover of $15,000, to both of which section 642(h) applies. A is a beneficiary succeeding to the property of the estate to the extent of $10,000, and since the total of the excess of deductions and the loss carryover is $20,000, A is entitled to the benefit of one half of each item, and the remaining half is divided equally between B and C.

              § 1.642(h)-5
              Example.

              The application of section 642(h) may be illustrated by the following example:

                Example.
                (a) A decedent dies January 31, 1954, leaving a will which provides for distributing all her estate equally to A and an existing trust for B. The period of administration of the estate terminates on December 31, 1954, at which time all the property of the estate is distributed to A and the trust. A reports his income for tax purposes on a calendar year basis, and the trust reports its income on the basis of a fiscal year ending August 31. During the period of the administration, the estate has the following items of income and deductions:

                    Taxable interest
                    $2,500

                    Business income
                    3,000

                    Total
                    5,500

                    Business expenses (including administrative expense allocable to business income)
                    5,000

                    Administrative expenses and corpus commissions not allocable to business income
                    9,800

                    Total deductions
                    14,800

                It also has a capital loss of $5,000.
                (b) Under section 642(h)(1), an unused net operating loss carryover of the estate on termination of $2,000 will be allowable to: A to the extent of $1,000 for his taxable year 1954 and the next four taxable years in accordance with section 172; and to the trust to the extent of $1,000 for its taxable year ending August 31, 1955, and its next four taxable years. The amount of the net operating loss carryover is computed as follows:

                    Deductions of estate for 1954
                    $14,800

                    Less adjustment under section 172(d)(4) (deductions not attributable to a trade or business ($9,800) allowable only to extent of gross income not derived from such trade or business ($2,500))
                    7,300

                    Deductions as adjusted
                    7,500

                    Gross income of estate for 1954
                    5,500

                    Net operating loss of estate for 1954
                    2,000

                    (No deduction for capital loss of $5,000 under section 172(d)(2))

                Neither A nor the trust will be allowed to carry back any part of the net operating loss made available to them under section 642(h)(1).
                (c) Under section 642(h)(2), excess deductions of the estate of $7,300 will be allowed as a deduction to A to the extent of $3,650 for the calendar year 1954 and to the trust to the extent of $3,650 for the taxable year ending August 31, 1955. The deduction of $7,300 for administrative expenses and corpus commissions is the only amount which was not taken into account in determining the net operating loss of the estate ($9,800 of such expenses less $2,500 taken into account).
                (d) Under section 642(h)(1), there will be allowable to A a capital loss carryover of $2,500 for his taxable year 1954 and for his next 4 taxable years in accordance with paragraph (a) of § 1.1212-1. There will be allowable to the trust a similar capital loss carryover of $2,500 for its taxable year ending August 31, 1955, and its next 4 taxable years (but see paragraph (b) of § 1.643(a)-3), (for taxable years beginning after December 31, 1963, net capital losses may be carried over indefinitely by beneficiaries other than corporations, in accordance with § 1.642(h)-1 and paragraph (b) of § 1.1212-1.)
                (e) The carryovers and excess deductions are not allowable directly to B, the trust beneficiary, but to the extent the distributable net income of the trust is reduced by the carryovers and excess deductions B may receive indirect benefit.

              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6828, 30 FR 7806, June 17, 1965]

              § 1.642(i)-1
              Certain distributions by cemetery perpetual care funds.
              (a) In general. Section 642 (i) provides that amounts distributed during taxable years ending after December 31, 1963, by a cemetery perpetual care fund trust for the care and maintenance of gravesites shall be treated as distributions solely for purposes of sections 651 and 661. The deduction for such a distribution is allowable only if the fund is taxable as a trust. In addition, the fund must have been created pursuant to local law by a taxable cemetery corporation (as defined in § 1.642 (i)-2 (a)) expressly for the care and maintenance of cemetery property. A care fund will be treated as having been created by a taxable cemetery corporation (“cemetery”) if the distributee cemetery is taxable, even though the care fund was created by the distributee cemetery in a year that it was tax-exempt or by a predecessor of such distributee cemetery which was tax-exempt in the year the fund was established. The deduction is the amount of the distributions during the fund's taxable year to the cemetery corporation for such care and maintenance that would be otherwise allowable under section 651 or 661, but in no event is to exceed the limitations described in paragraphs (b) and (c) of this section. The provisions of this paragraph shall not have the effect of extending the period of limitations under section 6511.
              (b) Limitation on amount of deduction. The deduction in any taxable year may not exceed the product of $5 multiplied by the aggregate number of gravesites sold by the cemetery corporation before the beginning of the taxable year of the trust. In general, the aggregate number of gravesites sold shall be the aggregate number of interment rights sold by the cemetery corporation (including gravesites sold by the cemetery before a care fund trust law was enacted). In addition, the number of gravesites sold shall include gravesites used to make welfare burials. Welfare burials and pre-trust fund law gravesites shall be included only to the extent that the cemetery cares for and maintain such gravesites. For purposes of this section, a gravesite is sold as of the date on which the purchaser acquires interment rights enforceable under local law. The aggregate number of gravesites includes only those gravesites with respect to which the fund or taxable cemetery corporation has an obligation for care and maintenance.
              (c) Requirements for deductibility of distributions for care and maintenance—(1) Obligation for care and maintenance. A deduction is allowed only for distributions for the care and maintenance of gravesites with respect to which the fund or taxable cemetery corporation has an obligation for care and maintenance. Such obligation may be established by the trust instrument, by local law, or by the cemetery's practice of caring for and maintaining gravesites, such as welfare burial plots or gravesites sold before the enactment of a care fund trust law.
              (2) Distribution actually used for care and maintenance. The amount of a deduction otherwise allowable for care fund distributions in any taxable year shall not exceed the portion of such distributions expended by the distributee cemetery corporation for the care and maintenance of gravesites before the end of the fund's taxable year following the taxable year in which it makes the distributions. A 6-month extension of time for filing the trust's return may be obtained upon request under section 6081. The failure of a cemetery to expend the care fund's distributions within a reasonable time before the due date for filing the return will be considered reasonable grounds for granting a 6-month extension of time for section 6081. For purposes of this paragraph, any amount expended by the care fund directly for the care and maintenance of gravesites shall be treated as an additional care fund distribution which is expended on the day of distribution by the cemetery corporation. The fund shall be allowed a deduction for such direct expenditure in the fund's taxable year during which the expenditure is made.
              (3) Example. The application of paragraph (c)(2) of this section is illustrated by the following example:

                Example.

                A, a calendar-year perpetual care fund trust, meeting the requirements of section 642 (i), makes a $10,000 distribution on December 1, 1978 to X, a taxable cemetery corporation operating on a May 31 fiscal year. From this $10,000 distribution, the cemetery makes the following expenditures for the care and maintenance of gravesites: $2,000 on December 20, 1978; $4,000 on June 1, 1979; $2,000 on October 1, 1979; and $1,000 on April 1, 1980. In addition, as authorized by the trust instrument, A itself makes a direct $1,000 payment to a contractor on September 1, 1979 for qualifying care and maintenance work performed. As a result of these transactions, A will be allowed an $8,000 deduction for its 1978 taxable year attributable to the cemetery's expenditures, and a $1,000 deduction for its 1979 taxable year attributable to the fund's direct payment. A will not be allowed a deduction for its 1978 taxable year for the cemetery's expenditure of either the $1,000 expended on April 1, 1980 or the remaining unspent portion of the original $10,000 distribution. The trustee may request a 6-month extension in order to allow the fund until October 15, 1979 to file its return for 1978.

              (d) Certified statement made by cemetery officials to fund trustees. A trustee of a cemetery perpetual care fund shall not be held personally liable for civil or criminal penalties resulting from false statements on the trust's tax return to the extent that such false statements resulted from the trustee's reliance on a certified statement made by the cemetery specifying the number of interments sold by the cemetery or the amount of the cemetery's expenditures for care and maintenance. The statement must indicate the basis upon which the cemetery determined what portion of its expenditures were made for the care and maintenance of gravesites. The statement must be certified by an officer or employee of the cemetery who has the responsibility to make or account for expenditures for care and maintenance. A copy of this statement shall be retained by the trustee along with the trust's return and shall be made available for inspection upon request by the Secretary. This paragraph does not relieve the care fund trust of its liability to pay the proper amount of tax due and to maintain adequate records to substantiate each of its deductions, including the deduction provided in section 642(i) and this section.
              [T.D. 7651, 44 FR 61596, Oct. 26, 1979]

              § 1.642(i)-2
              Definitions.
              (a) Taxable cemetery corporation. For purposes of section 642(i) and this section, the meaning of the term taxable cemetery corporation is limited to a corporation (within the meaning of section 7701(a)(3)) engaged in the business of owning and operating a cemetery that either (1) is not exempt from Federal tax, or (2) is subject to tax under section 511 with respect to its cemetery activities.
              (b) Pursuant to local law. A cemetery perpetual care fund is created pursuant to local law if:
              (1) The governing law of the relevant jurisdiction (State, district, county, parish, etc.) requires or expressly permits the creation of such a fund, or
              (2) The legally enforceable bylaws or contracts of a taxable cemetery corporation require a perpetual care fund.
              (c) Gravesite. A gravesite is any type of interment right that has been sold by a cemetery, including, but not limited to, a burial lot, mausoleum, lawn crypt, niche, or scattering ground. For purposes of § 1.642 (i)-1, the term gravesites includes only those gravesites with respect to which the care fund or cemetery has an obligation for care and maintenance within the meaning of § 1.642 (i)-1(c)(1).
              (d) Care and maintenance. For purposes of section 642(i) and this section, the term care and maintenance of gravesite shall be generally defined in accordance with the definition of such term under the local law pursuant to which the cemetery perpetual care fund is created. If the applicable local law contains no definition, care and maintenance of gravesites may include the upkeep, repair and preservation of those portions of cemetery property in which gravesites (as defined in paragraph (c) of this section) have been sold; including gardening, road maintenance, water line and drain repair and other activities reasonably necessary to the preservation of cemetery property. The costs for care and maintenance include, but are not limited to, expenditures for the maintenance, repair and replacement of machinery, tools, and equipment, compensation of employees performing such work, insurance premiums, reasonable payments for employees' pension and other benefit plans, and the costs of maintaining necessary records of lot ownership, transfers and burials. However, if some of the expenditures of the cemetery corporation, such as officers' salaries, are for both care and maintenance and for other purposes, the expenditures must be properly allocated between care and maintenance of gravesites and the other purposes. Only those expenditures that are properly allocable to those portions of cemetery property in which gravesites have been sold qualify as expenditures for care and maintenance of gravesites.
              [T.D. 7651, 44 FR 61596, Oct. 26, 1979]

              § 1.643(a)-0
              Distributable net income; deduction for distributions; in general.
              The term distributable net income has no application except in the taxation of estates and trusts and their beneficiaries. It limits the deductions allowable to estates and trusts for amounts paid, credited, or required to be distributed to beneficiaries and is used to determine how much of an amount paid, credited, or required to be distributed to a beneficiary will be includible in his gross income. It is also used to determine the character of distributions to the beneficiaries. Distributable net income means for any taxable year, the taxable income (as defined in section 63) of the estate or trust, computed with the modifications set forth in §§ 1.643(a)-1 through 1.643(a)-7.

              § 1.643(a)-1
              Deduction for distributions.
              The deduction allowable to a trust under section 651 and to an estate or trust under section 661 for amounts paid, credited, or required to be distributed to beneficiaries is not allowed in the computation of distributable net income.

              § 1.643(a)-2
              Deduction for personal exemption.
              The deduction for personal exemption under section 642(b) is not allowed in the computation of distributable net income.

              § 1.643(a)-3
              Capital gains and losses.
              (a) In general. Except as provided in § 1.643(a)-6 and paragraph (b) of this section, gains from the sale or exchange of capital assets are ordinarily excluded from distributable net income and are not ordinarily considered as paid, credited, or required to be distributed to any beneficiary.
              (b) Capital gains included in distributable net income. Gains from the sale or exchange of capital assets are included in distributable net income to the extent they are, pursuant to the terms of the governing instrument and applicable local law, or pursuant to a reasonable and impartial exercise of discretion by the fiduciary (in accordance with a power granted to the fiduciary by applicable local law or by the governing instrument if not prohibited by applicable local law)—
              (1) Allocated to income (but if income under the state statute is defined as, or consists of, a unitrust amount, a discretionary power to allocate gains to income must also be exercised consistently and the amount so allocated may not be greater than the excess of the unitrust amount over the amount of distributable net income determined without regard to this subparagraph § 1.643(a)-3(b));
              (2) Allocated to corpus but treated consistently by the fiduciary on the trust's books, records, and tax returns as part of a distribution to a beneficiary; or
              (3) Allocated to corpus but actually distributed to the beneficiary or utilized by the fiduciary in determining the amount that is distributed or required to be distributed to a beneficiary.
              (c) Charitable contributions included in distributable net income. If capital gains are paid, permanently set aside, or to be used for the purposes specified in section 642(c), so that a charitable deduction is allowed under that section in respect of the gains, they must be included in the computation of distributable net income.
              (d) Capital losses. Losses from the sale or exchange of capital assets shall first be netted at the trust level against any gains from the sale or exchange of capital assets, except for a capital gain that is utilized under paragraph (b)(3) of this section in determining the amount that is distributed or required to be distributed to a particular beneficiary. See § 1.642(h)-1 with respect to capital loss carryovers in the year of final termination of an estate or trust.
              (e) Examples. The following examples illustrate the rules of this section:

                Example 1.

                Under the terms of Trust's governing instrument, all income is to be paid to A for life. Trustee is given discretionary powers to invade principal for A's benefit and to deem discretionary distributions to be made from capital gains realized during the year. During Trust's first taxable year, Trust has $5,000 of dividend income and $10,000 of capital gain from the sale of securities. Pursuant to the terms of the governing instrument and applicable local law, Trustee allocates the $10,000 capital gain to principal. During the year, Trustee distributes to A $5,000, representing A's right to trust income. In addition, Trustee distributes to A $12,000, pursuant to the discretionary power to distribute principal. Trustee does not exercise the discretionary power to deem the discretionary distributions of principal as being paid from capital gains realized during the year. Therefore, the capital gains realized during the year are not included in distributable net income and the $10,000 of capital gain is taxed to the trust. In future years, Trustee must treat all discretionary distributions as not being made from any realized capital gains.

                Example 2.
                The facts are the same as in Example 1, except that Trustee intends to follow a regular practice of treating discretionary distributions of principal as being paid first from any net capital gains realized by Trust during the year. Trustee evidences this treatment by including the $10,000 capital gain in distributable net income on Trust's federal income tax return so that it is taxed to A. This treatment of the capital gains is a reasonable exercise of Trustee's discretion. In future years Trustee must treat all discretionary distributions as being made first from any realized capital gains.

                Example 3.
                The facts are the same as in Example 1, except that Trustee intends to follow a regular practice of treating discretionary distributions of principal as being paid from any net capital gains realized by Trust during the year from the sale of certain specified assets or a particular class of investments. This treatment of capital gains is a reasonable exercise of Trustee's discretion.

                Example 4.
                The facts are the same as in Example 1, except that pursuant to the terms of the governing instrument (in a provision not prohibited by applicable local law), capital gains realized by Trust are allocated to income. Because the capital gains are allocated to income pursuant to the terms of the governing instrument, the $10,000 capital gain is included in Trust's distributable net income for the taxable year.

                Example 5.
                The facts are the same as in Example 1, except that Trustee decides that discretionary distributions will be made only to the extent Trust has realized capital gains during the year and thus the discretionary distribution to A is $10,000, rather than $12,000. Because Trustee will use the amount of any realized capital gain to determine the amount of the discretionary distribution to the beneficiary, the $10,000 capital gain is included in Trust's distributable net income for the taxable year.

                Example 6.
                Trust's assets consist of Blackacre and other property. Under the terms of Trust's governing instrument, Trustee is directed to hold Blackacre for ten years and then sell it and distribute all the sales proceeds to A. Because Trustee uses the amount of the sales proceeds that includes any realized capital gain to determine the amount required to be distributed to A, any capital gain realized from the sale of Blackacre is included in Trust's distributable net income for the taxable year.

                Example 7.
                Under the terms of Trust's governing instrument, all income is to be paid to A during the Trust's term. When A reaches 35, Trust is to terminate and all the principal is to be distributed to A. Because all the assets of the trust, including all capital gains, will be actually distributed to the beneficiary at the termination of Trust, all capital gains realized in the year of termination are included in distributable net income. See § 1.641(b)-3 for the determination of the year of final termination and the taxability of capital gains realized after the terminating event and before final distribution.

                Example 8.
                The facts are the same as Example 7, except Trustee is directed to pay B $10,000 before distributing the remainder of Trust assets to A. Because the distribution to B is a gift of a specific sum of money within the meaning of section 663(a)(1), none of Trust's distributable net income that includes all of the capital gains realized during the year of termination is allocated to B's distribution.

                Example 9.
                The facts are the same as Example 7, except Trustee is directed to distribute one-half of the principal to A when A reaches 35 and the balance to A when A reaches 45. Trust assets consist entirely of stock in corporation M with a fair market value of $1,000,000 and an adjusted basis of $300,000. When A reaches 35, Trustee sells one-half of the stock and distributes the sales proceeds to A. All the sales proceeds, including all the capital gain attributable to that sale, are actually distributed to A and therefore all the capital gain is included in distributable net income.

                Example 10.
                The facts are the same as Example 9, except when A reaches 35, Trustee sells all the stock and distributes one-half of the sales proceeds to A. If authorized by the governing instrument and applicable state statute, Trustee may determine to what extent the capital gain is distributed to A. The $500,000 distribution to A may be treated as including a minimum of $200,000 of capital gain (and all of the principal amount of $300,000) and a maximum of $500,000 of the capital gain (with no principal). Trustee evidences the treatment by including the appropriate amount of capital gain in distributable net income on Trust's federal income tax return. If Trustee is not authorized by the governing instrument and applicable state statutes to determine to what extent the capital gain is distributed to A, one-half of the capital gain attributable to the sale is included in distributable net income.

                Example 11.
                The applicable state statute provides that a trustee may make an election to pay an income beneficiary an amount equal to four percent of the fair market value of the trust assets, as determined at the beginning of each taxable year, in full satisfaction of that beneficiary's right to income. State statute also provides that this unitrust amount shall be considered paid first from ordinary and tax-exempt income, then from net short-term capital gain, then from net long-term capital gain, and finally from return of principal. Trust's governing instrument provides that A is to receive each year income as defined under state statute. Trustee makes the unitrust election under state statute. At the beginning of the taxable year, Trust assets are valued at $500,000. During the year, Trust receives $5,000 of dividend income and realizes $80,000 of net long-term gain from the sale of capital assets. Trustee distributes to A $20,000 (4% of $500,000) in satisfaction of A's right to income. Net long-term capital gain in the amount of $15,000 is allocated to income pursuant to the ordering rule of the state statute and is included in distributable net income for the taxable year.

                Example 12.
                The facts are the same as in Example 11, except that neither state statute nor Trust's governing instrument has an ordering rule for the character of the unitrust amount, but leaves such a decision to the discretion of Trustee. Trustee intends to follow a regular practice of treating principal, other than capital gain, as distributed to the beneficiary to the extent that the unitrust amount exceeds Trust's ordinary and tax-exempt income. Trustee evidences this treatment by not including any capital gains in distributable net income on Trust's Federal income tax return so that the entire $80,000 capital gain is taxed to Trust. This treatment of the capital gains is a reasonable exercise of Trustee's discretion. In future years Trustee must consistently follow this treatment of not allocating realized capital gains to income.

                Example 13.
                The facts are the same as in Example 11, except that neither state statutes nor Trust's governing instrument has an ordering rule for the character of the unitrust amount, but leaves such a decision to the discretion of Trustee. Trustee intends to follow a regular practice of treating net capital gains as distributed to the beneficiary to the extent the unitrust amount exceeds Trust's ordinary and tax-exempt income. Trustee evidences this treatment by including $15,000 of the capital gain in distributable net income on Trust's Federal income tax return. This treatment of the capital gains is a reasonable exercise of Trustee's discretion. In future years Trustee must consistently treat realized capital gain, if any, as distributed to the beneficiary to the extent that the unitrust amount exceeds ordinary and tax-exempt income.

                Example 14.
                Trustee is a corporate fiduciary that administers numerous trusts. State statutes provide that a trustee may make an election to distribute to an income beneficiary an amount equal to four percent of the annual fair market value of the trust assets in full satisfaction of that beneficiary's right to income. Neither state statutes nor the governing instruments of any of the trusts administered by Trustee has an ordering rule for the character of the unitrust amount, but leaves such a decision to the discretion of Trustee. With respect to some trusts, Trustee intends to follow a regular practice of treating principal, other than capital gain, as distributed to the beneficiary to the extent that the unitrust amount exceeds the trust's ordinary and tax-exempt income. Trustee will evidence this treatment by not including any capital gains in distributable net income on the Federal income tax returns for those trusts. With respect to other trusts, Trustee intends to follow a regular practice of treating any net capital gains as distributed to the beneficiary to the extent the unitrust amount exceeds the trust's ordinary and tax-exempt income. Trustee will evidence this treatment by including net capital gains in distributable net income on the Federal income tax returns filed for these trusts. Trustee's decision with respect to each trust is a reasonable exercise of Trustee's discretion and, in future years, Trustee must treat the capital gains realized by each trust consistently with the treatment by that trust in prior years.

              (f) Effective date. This section applies for taxable years of trusts and estates ending after January 2, 2004.
              [T.D. 9102, 69 FR 18, Jan. 2, 2004]

              § 1.643(a)-4
              Extraordinary dividends and taxable stock dividends.

              In the case solely of a trust which qualifies under subpart B (section 651 and following) as a “simple trust,” there are excluded from distributable net income extraordinary dividends (whether paid in cash or in kind) or taxable stock dividends which are not distributed or credited to a beneficiary because the fiduciary in good faith determines that under the terms of the governing instrument and applicable local law such dividends are allocable to corpus. See section 665(e), paragraph (b) of § 1.665(e)-1, and paragraph (b) of § 1.665(e)-1A for the treatment of such dividends upon subsequent distribution.
              [T.D. 7204, 37 FR 17134, Aug. 25, 1972]

              § 1.643(a)-5
              Tax-exempt interest.
              (a) There is included in distributable net income any tax-exempt interest excluded from gross income under section 103, reduced by disbursements allocable to such interest which would have been deductible under section 212 but for the provisions of section 265 (relating to disallowance of deductions allocable to tax-exempt income).

              (b) If the estate or trust is allowed a charitable contributions deduction under section 642(c), the amounts specified in paragraph (a) of this section and § 1.643(a)-6 are reduced by the portion deemed to be included in income paid, permanently set aside, or to be used for the purposes specified in section 642(c). If the governing instrument or local law specifically provides as to the source out of which amounts are paid, permanently set aside, or to be used for such charitable purposes, the specific provision controls for Federal tax purposes to the extent such provision has economic effect independent of income tax consequences. See § 1.652(b)-2(b). In the absence of such specific provisions in the governing instrument or local law, an amount to which section 642(c) applies is deemed to consist of the same proportion of each class of the items of income of the estate or trust as the total of each class bears to the total of all classes. For illustrations showing the determination of the character of an amount deductible under section 642(c), see Examples 1 and 2 of § 1.662(b)-2 and § 1.662(c)-4(e).
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960, as amended by T.D. 9582, 77 FR 22485, Apr. 16, 2012]

              § 1.643(a)-6
              Income of foreign trust.
              (a) Distributable net income of a foreign trust. In the case of a foreign trust (see section 7701(a)(31)), the determination of distributable net income is subject to the following rules:
              (1) There is included in distributable net income the amounts of gross income from sources without the United States, reduced by disbursements allocable to such foreign income which would have been deductible but for the provisions of section 265 (relating to disallowance of deductions allocable to tax exempt income). See paragraph (b) of § 1.643(a)-5 for rules applicable when an estate or trust is allowed a charitable contributions deduction under section 642(c).
              (2) In the case of a distribution made by a trust before January 1, 1963, for purposes of determining the distributable net income of the trust for the taxable year in which the distribution is made, or for any prior taxable year;
              (i) Gross income from sources within the United States is determined by taking into account the provisions of section 894 (relating to income exempt under treaty); and
              (ii) Distributable net income is determined by taking into account the provisions of section 643(a)(3) (relating to exclusion of certain gains from the sale or exchange of capital assets).
              (3) In the case of a distribution made by a trust after December 31, 1962, for purposes of determining the distributable net income of the trust for any taxable year, whether ending before January 1, 1963, or after December 31, 1962;
              (i) Gross income (for the entire foreign trust) from sources within the United States is determined without regard to the provisions of section 894 (relating to income exempt under treaty);
              (ii) In respect of a foreign trust created by a U.S. person (whether such trust constitutes the whole or only a portion of the entire foreign trust) (see section 643(d) and § 1.643(d)-1), there shall be included in gross income gains from the sale or exchange of capital assets reduced by losses from such sales or exchanges to the extent such losses do not exceed gains from such sales or exchanges, and the deduction under section 1202 (relating to deduction for capital gains) shall not be taken into account; and

              (iii) In respect of a foreign trust created by a person other than a U.S. person (whether such trust constitutes the whole or only a portion of the entire foreign trust) (see section 643(d) and § 1.643(d)-1), distributable net income is determined by taking into account all of the provisions of section 643 except section 643(a)(6)(C) (relating to gains from the sale or exchange of capital assets by a foreign trust created by a U.S. person).
              (b) Examples. The application of this section, showing the computation of distributable net income for one of the taxable years for which such a computation must be made, may be illustrated by the following examples:

                Example 1.
                (1) A trust is created in 1952 under the laws of Country X by the transfer to a trustee in Country X of money and property by a U.S. person. The entire trust constitutes a foreign trust created by a U.S. person. The income from the trust corpus is to be accumulated until the beneficiary, a resident citizen of the United States who was born in 1944, reaches the age of 21 years, and upon his reaching that age, the corpus and accumulated income are to be distributed to him. The trust instrument provides that capital gains are to be allocated to corpus and are not to be paid, credited, or required to be distributed to any beneficiary during the taxable year or paid, permanently set aside, or to be used for the purposes specified in section 642(c). Under the terms of a tax convention between the United States and Country X, interest income received by the trust from U.S. sources is exempt from U.S. taxation. In 1965 the corpus and accumulated income are distributed to the beneficiary. During the taxable year 1964, the trust has the following items of income, loss, and expense:

                    Interest on bonds of a U.S. corporation
                    $10,000

                    Net long-term capital gain from U.S. sources
                    30,000

                    Gross income from investments in Country X
                    40,000

                    Net short-term capital loss from U.S. sources
                    5,000

                    Expenses allocable to gross income from investments in Country X
                    5,000

                (2) The distributable net income for the taxable year 1964 of the foreign trust created by a U.S. person, determined under section 643(a), is $70,000, computed as follows:

                    Interest on bonds of a U.S. corporation
                    $10,000

                    Gross income from investments in Country X
                    40,000

                    Net long-term capital gain from U.S. sources
                    $30,000

                    Less: Net short-term capital loss from U.S. sources
                    5,000

                    Excess of net long-term capital gain over net short-term capital loss
                    25,000

                    Total
                    75,000

                    Less: Expenses allocable to income from investments in Country X
                    5,000

                    Distributable net income
                    70,000

                (3) In determining the distributable net income of $70,000, the taxable income of the trust is computed with the following modifications: No deduction is allowed for the personal exemption of the trust (section 643(a)(2)); the interest received on bonds of a U.S. corporation is included in the trust gross income despite the fact that such interest is exempt from U.S. tax under the provisions of the tax treaty between Country X and the United States (section 643(a)(6) (see H. Con. Res. (B)); the excess of net long-term capital gain over net short-term capital loss allocable to corpus is included in distributable net income, but such excess is not subject to the deduction under section 1202 (section 643(a)(6)(C)); and the amount representing gross income from investments in Country X is included, but such amount is reduced by the amount of the disbursements allocable to such income (section 643(a)(6)(A)).

                Example 2.
                (1) The facts are the same as in example 1 except that money or property has also been transferred to the trust by a person other than a U.S. person and, pursuant to the provisions of § 1.643(d)-1, during 1964 only 60 percent of the entire trust constitutes a foreign trust created by a U.S. person.
                (2) The distributable net income for the taxable year 1964 of the foreign trust created by a U.S. person, determined under section 643(a), is $42,000 computed as follows:

                    Interest on bonds of a U.S. corporation (60 percent of $10,000)
                    $6,000

                    Gross income from investments in Country X (60 percent of $40,000)
                    24,000

                    Net long-term capital gain from U.S. sources (60 percent of $30,000)
                    $18,000

                    Less: Net short-term capital loss from U.S. sources (60 percent of $5,000)
                    3,000

                    15,000

                    Total

                    45,000

                    Less: Expenses allocable to income from investments in Country X (60 percent of $5,000)
                    3,000

                    Distributable net income
                    42,000

                (3) The distributable net income for the taxable year 1964 of the portion of the entire foreign trust which does not constitute a foreign trust created by a U.S. person, determined under section 643(a), is $18,000, computed as follows:

                    Interest on bonds of a U.S. corporation (40 percent of $10,000)
                    $4,000

                    Gross income from investments in Country X (40 percent of $40,000)
                    16,000

                    Total
                    20,000

                    Less: Expenses allocable to income from investments in Country X (40 percent of $5,000)
                    2,000

                    Distributable net income
                    18,000

                (4) The distributable net income of the entire foreign trust for the taxable year 1964 is $60,000, computed as follows:

                    Distributable net income of the foreign trust created by a U.S. person
                    $42,000

                    Distributable net income of that portion of the entire foreign trust which does not constitute a foreign trust created by a U.S. person
                    18,000

                    Distributable net income of the entire foreign trust
                    60,000

                It should be noted that the difference between the $70,000 distributable net income of the foreign trust in example 1 and the $60,000 distributable net income of the entire foreign trust in this example is due to the $10,000 (40 percent of $25,000) net capital gain (capital gain net income for taxable years beginning after December 31, 1976) which under section 643(a)(3) is excluded from the distributable net income of that portion of the foreign trust in example 2 which does not constitute a foreign trust created by a U.S. person.

              [T.D. 6989, 34 FR 731, Jan. 17, 1969, as amended by T.D. 7728, 45 FR 72650, Nov. 3, 1980]

              § 1.643(a)-7
              Dividends.
              Dividends excluded from gross income under section 116 (relating to partial exclusion of dividends received) are included in distributable net income. For this purpose, adjustments similar to those required by § 1.643(a)-5 with respect to expenses allocable to tax-exempt income and to income included in amounts paid or set aside for charitable purposes are not made. See the regulations under section 642(c).
              [T.D. 7357, 40 FR 23742, June 2, 1975]

              § 1.643(a)-8
              Certain distributions by charitable remainder trusts.
              (a) Purpose and scope. This section is intended to prevent the avoidance of the purposes of the charitable remainder trust rules regarding the characterizations of distributions from those trusts in the hands of the recipients and should be interpreted in a manner consistent with this purpose. This section applies to all charitable remainder trusts described in section 664 and the beneficiaries of such trusts.
              (b) Deemed sale by trust. (1) For purposes of section 664(b), a charitable remainder trust shall be treated as having sold, in the year in which a distribution of an annuity or unitrust amount is made from the trust, a pro rata portion of the trust assets to the extent that the distribution of the annuity or unitrust amount would (but for the application of this paragraph (b)) be characterized in the hands of the recipient as being from the category described in section 664(b)(4) and exceeds the amount of the previously undistributed
              (i) Cash contributed to the trust (with respect to which a deduction was allowable under section 170, 2055, 2106, or 2522); plus
              (ii) Basis in any contributed property (with respect to which a deduction was allowable under section 170, 2055, 2106, or 2522) that was sold by the trust.
              (2) Any transaction that has the purpose or effect of circumventing the rules in this paragraph (b) shall be disregarded.
              (3) For purposes of paragraph (b)(1) of this section, trust assets do not include cash or assets purchased with the proceeds of a trust borrowing, forward sale, or similar transaction.
              (4) Proper adjustment shall be made to any gain or loss subsequently realized for gain or loss taken into account under paragraph (b)(1) of this section.
              (c) Examples. The following examples illustrate the rules of paragraph (b) of this section:

                Example 1. Deemed sale by trust.
                Donor contributes stock having a fair market value of $2 million to a charitable remainder unitrust with a unitrust amount of 50 percent of the net fair market value of the trust assets and a two-year term. The stock has a total adjusted basis of $400,000. In Year 1, the trust receives dividend income of $20,000. As of the valuation date, the trust's assets have a net fair market value of $2,020,000 ($2 million in stock, plus $20,000 in cash). To obtain additional cash to pay the unitrust amount to the noncharitable beneficiary, the trustee borrows $990,000 against the value of the stock. The trust then distributes $1,010,000 to the beneficiary before the end of Year 1. Under section 664(b)(1), $20,000 of the distribution is characterized in the hands of the beneficiary as dividend income. The rest of the distribution, $990,000, is attributable to an amount received by the trust that did not represent either cash contributed to the trust or a return of basis in any contributed asset sold by the trust during Year 1. Under paragraph (b)(3) of this section, the stock is a trust asset because it was not purchased with the proceeds of the borrowing. Therefore, in Year 1, under paragraph (b)(1) of this section, the trust is treated as having sold $990,000 of stock and as having realized $792,000 of capital gain (the trust's basis in the shares deemed sold is $198,000). Thus, in the hands of the beneficiary, $792,000 of the distribution is characterized as capital gain under section 664(b)(2) and $198,000 is characterized as a tax-free return of corpus under section 664(b)(4). No part of the $990,000 loan is treated as acquisition indebtedness under section 514(c) because the entire loan has been recharacterized as a deemed sale.

                Example 2. Adjustment to trust's basis in assets deemed sold.
                The facts are the same as in Example 1. During Year 2, the trust sells the stock for $2,100,000. The trustee uses a portion of the proceeds of the sale to repay the outstanding loan, plus accrued interest. Under paragraph (b)(4) of this section, the trust's adjusted basis in the stock is $1,192,000 ($400,000 plus the $792,000 of gain recognized in Year 1). Therefore, the trust recognizes capital gain (as described in section 664(b)(2)) in Year 2 of $908,000.

                Example 3. Distribution of cash contributions.
                Upon the death of D, the proceeds of a life insurance policy on D's life are payable to T, a charitable remainder annuity trust. The terms of the trust provide that, for a period of three years commencing upon D's death, the trust shall pay an annuity amount equal to $x annually to A, the child of D. After the expiration of such three-year period, the remainder interest in the trust is to be transferred to charity Z. In Year 1, the trust receives payment of the life insurance proceeds and pays the appropriate pro rata portion of the $x annuity to A from the insurance proceeds. During Year 1, the trust has no income. Because the entire distribution is attributable to a cash contribution (the insurance proceeds) to the trust for which a charitable deduction was allowable under section 2055 with respect to the present value of the remainder interest passing to charity, the trust will not be treated as selling a pro rata portion of the trust assets under paragraph (b)(1) of this section. Thus, the distribution is characterized in A's hands as a tax-free return of corpus under section 664(b)(4).

              (d) Effective date. This section is applicable to distributions made by a charitable remainder trust after October 18, 1999.
              [T.D. 8926, 66 FR 1037, Jan. 5, 2001]

              § 1.643(b)-1
              Definition of income.

              For purposes of subparts A through D, part I, subchapter J, chapter 1 of the Internal Revenue Code, “income,” when not preceded by the words “taxable,” “distributable net,” “undistributed net,” or “gross,” means the amount of income of an estate or trust for the taxable year determined under the terms of the governing instrument and applicable local law. Trust provisions that depart fundamentally from traditional principles of income and principal will generally not be recognized. For example, if a trust instrument directs that all the trust income shall be paid to the income beneficiary but defines ordinary dividends and interest as principal, the trust will not be considered one that under its governing instrument is required to distribute all its income currently for purposes of section 642(b) (relating to the personal exemption) and section 651 (relating to simple trusts). Thus, items such as dividends, interest, and rents are generally allocated to income and proceeds from the sale or exchange of trust assets are generally allocated to principal. However, an allocation of amounts between income and principal pursuant to applicable local law will be respected if local law provides for a reasonable apportionment between the income and remainder beneficiaries of the total return of the trust for the year, including ordinary and tax-exempt income, capital gains, and appreciation. For example, a state statute providing that income is a unitrust amount of no less than 3% and no more than 5% of the fair market value of the trust assets, whether determined annually or averaged on a multiple year basis, is a reasonable apportionment of the total return of the trust. Similarly, a state statute that permits the trustee to make adjustments between income and principal to fulfill the trustee's duty of impartiality between the income and remainder beneficiaries is generally a reasonable apportionment of the total return of the trust. Generally, these adjustments are permitted by state statutes when the trustee invests and manages the trust assets under the state's prudent investor standard, the trust describes the amount that may or must be distributed to a beneficiary by referring to the trust's income, and the trustee after applying the state statutory rules regarding the allocation of receipts and disbursements to income and principal, is unable to administer the trust impartially. Allocations pursuant to methods prescribed by such state statutes for apportioning the total return of a trust between income and principal will be respected regardless of whether the trust provides that the income must be distributed to one or more beneficiaries or may be accumulated in whole or in part, and regardless of which alternate permitted method is actually used, provided the trust complies with all requirements of the state statute for switching methods. A switch between methods of determining trust income authorized by state statute will not constitute a recognition event for purposes of section 1001 and will not result in a taxable gift from the trust's grantor or any of the trust's beneficiaries. A switch to a method not specifically authorized by state statute, but valid under state law (including a switch via judicial decision or a binding non-judicial settlement) may constitute a recognition event to the trust or its beneficiaries for purposes of section 1001 and may result in taxable gifts from the trust's grantor and beneficiaries, based on the relevant facts and circumstances. In addition, an allocation to income of all or a part of the gains from the sale or exchange of trust assets will generally be respected if the allocation is made either pursuant to the terms of the governing instrument and applicable local law, or pursuant to a reasonable and impartial exercise of a discretionary power granted to the fiduciary by applicable local law or by the governing instrument, if not prohibited by applicable local law. This section is effective for taxable years of trusts and estates ending after January 2, 2004.
              [T.D. 9102, 69 FR 19, Jan. 2, 2004]

              § 1.643(b)-2
              Dividends allocated to corpus.
              Extraordinary dividends or taxable stock dividends which the fiduciary, acting in good faith, determines to be allocable to corpus under the terms of the governing instrument and applicable local law are not considered “income” for purposes of subpart A, B, C, or D, part I, subchapter J, chapter 1 of the Code. See section 643(a)(4), § 1.643(a)-4, § 1.643(d)-2, section 665(e), paragraph (b) of § 1.665(e)-1, and paragraph (b) of § 1.665(e)-1A for the treatment of such items in the computation of distributable net income.
              [T.D. 7204, 37 FR 17134, Aug. 25, 1972]

              § 1.643(c)-1
              Definition of “beneficiary”.
              An heir, legatee, or devisee (including an estate or trust) is a beneficiary. A trust created under a decedent's will is a beneficiary of the decedent's estate. The following persons are treated as beneficiaries:
              (a) Any person with respect to an amount used to discharge or satisfy that person's legal obligation as that term is used in § 1.662(a)-4.
              (b) The grantor of a trust with respect to an amount applied or distributed for the support of a dependent under the circumstances specified in section 677(b) out of corpus or out of other than income for the taxable year of the trust.
              (c) The trustee or cotrustee of a trust with respect to an amount applied or distributed for the support of a dependent under the circumstances specified in section 678(c) out of corpus or out of other than income for the taxable year of the trust.

              § 1.643(d)-1
              Definition of “foreign trust created by a United States person”.
              (a) In general. For the purpose of part I, subchapter J, chapter 1 of the Internal Revenue Code, the term foreign trust created by a United States person means that portion of a foreign trust (as defined in section 7701(a)(31)) attributable to money or property (including all accumulated earnings, profits, or gains attributable to such money or property) of a U.S. person (as defined in section 7701(a)(30)) transferred directly or indirectly, or under the will of a decedent who at the date of his death was a U.S. citizen or resident, to the foreign trust. A foreign trust created by a person who is not a U.S. person, to which a U.S. person transfers his money or property, is a foreign trust created by a U.S. person to the extent that the fair market value of the entire foreign trust is attributable to money or property of the U.S. person transferred to the foreign trust. The transfer of money or property to the foreign trust may be made either directly or indirectly by a U.S. person. Transfers of money or property to a foreign trust do not include transfers of money or property pursuant to a sale or exchange which is made for a full and adequate consideration. Transfers to which section 643(d) and this section apply are transfers of money or property which establish or increase the corpus of a foreign trust. The rules set forth in this section with respect to transfers by a U.S. person to a foreign trust also are applicable with respect to transfers under the will of a decedent who at the date of his death was a U.S. citizen or resident. For provisions relating to the information returns which are required to be filed with respect to the creation of or transfers to foreign trusts, see section 6048.
              (b) Determination of a foreign trust created by a U.S. person—(1) Transfers of money or property only by a U.S. person. If all the items of money or property constituting the corpus of a foreign trust are transferred to the trust by a U.S. person, the entire foreign trust is a foreign trust created by a U.S. person.
              (2) Transfers of money or property by both a U.S. person and a person other than a U.S. person; transfers required to be treated as separate funds. Where there are transfers of money or property by both a U.S. person and a person other than a U.S. person to a foreign trust, and it is necessary, either by reason of the provisions of the governing instrument of the trust or by reason of some other requirement such as local law, that the trustee treat the entire foreign trust as composed of two separate funds, one consisting of the money or property (including all accumulated earnings, profits, or gains attributable to such money or property) transferred by the U.S. person and the other consisting of the money or property (including all accumulated earnings, profits, or gains attributable to such money or property) transferred by the person other than the U.S. person, the foreign trust created by a U.S. person shall be the fund consisting of the money or property transferred by the U.S. person. See example 1 in paragraph (c) of this section.
              (3) Transfers of money or property by both a U.S. person and a person other than a U.S. person; transfers not required to be treated as separate funds. Where the corpus of a foreign trust consists of money or property transferred to the trust (simultaneously or at different times) by a U.S. person and by a person who is not a U.S. person, the foreign trust created by a U.S. person within the meaning of section 643(d) is that portion of the entire foreign trust which, immediately after any transfer of money or property to the trust, the fair market value of money or property (including all accumulated earnings, profits, or gains attributable to such money or property) transferred to the foreign trust by the U.S. person bears to the fair market value of the corpus (including all accumulated earnings, profits, or gains attributable to the corpus) of the entire foreign trust.
              (c) Examples. The provisions of paragraph (b) of this section may be illustrated by the following examples. Example 1 illustrates the application of paragraph (b)(2) of this section. Example (2) illustrates the application of paragraph (b)(3) of this section in a case where there is no provision in the governing instrument of the trust or elsewhere which would require the trustee to treat the corpus of the trust as composed of more than one fund.

                Example 1.
                On January 1, 1964, the date of the creation of a foreign trust, a U.S. person transfers to it stock of a U.S. corporation with a fair market value of $50,000. On the same day, a person other than a U.S. person transfers to the trust Country X bonds with a fair market value of $25,000. The governing instrument of the trust provides that the income from the stock of the U.S. corporation is to be accumulated until A, a U.S. beneficiary, reaches the age of 21 years, and upon his reaching that age, the stock and income accumulated thereon are to be distributed to him. The governing instrument of the trust further provides that the income from the Country X bonds is to be accumulated until B, a U.S. beneficiary, reaches the age of 21 years, and upon his reaching that age, the bonds and income accumulated thereon are to be distributed to him. To comply with the provisions of the governing instrument of the trust that the income from the stock of the U.S. corporation be accumulated and distributed to A and that the income from the Country X bonds be accumulated and distributed to B, it is necessary that the trustee treat the transfers as two separate funds. The fund consisting of the stock of the U.S. corporation is a foreign trust created by a U.S. person.

                Example 2.

                On January 1, 1964, the date of the creation of a foreign trust, a U.S. person transfers to it property having a fair market value of $60,000 and a person other than a U.S. person transfers to it property having a fair market value of $40,000. Immediately after these transfers, the foreign trust created by a U.S. person is 60 percent of the entire foreign trust, determined as follows:

                $60,000 (Value of property transferred by U.S. person) / $100,000 (Value of entire property transferred to trust) = 60 percent

                The undistributed net income for the calendar years 1964 and 1965 is $20,000 which increases the value of the entire foreign trust to $120,000 ($100,000 plus $20,000). Accordingly, as of December 31, 1965, the portion of the foreign trust created by the U.S. person is $72,000 (60 percent of $120,000). On January 1, 1966, the U.S. person transfers property having a fair market value of $40,000 increasing the value of the entire foreign trust to $160,000 ($120,000 plus $40,000) and increasing the value of the portion of the foreign trust created by the U.S. person to $112,000 ($72,000 plus $40,000). Immediately, after this transfer, the foreign trust created by the U.S. person is 70 percent of the entire foreign trust, determined as follows:

                $112,000 (Value of property transferred by U.S. person) / $160,000 (Value of entire property transferred to the trust) = 70 percent

              [T.D. 6989, 34 FR 732, Jan. 17, 1969, as amended by T.D. 9849, 84 FR 9235, Mar. 14, 2019]

              § 1.643(d)-2
              Illustration of the provisions of section 643.

              (a) The provisions of section 643 may be illustrated by the following example:

                Example.
                (1) Under the terms of the trust instrument, the income of a trust is required to be currently distributed to W during her life. Capital gains are allocable to corpus and all expenses are charges against corpus. During the taxable year the trust has the following items of income and expenses:

                    Dividends from domestic corporations
                    $30,000

                    Extraordinary dividends allocated to corpus by the trustee in good faith
                    20,000

                    Taxable interest
                    10,000

                    Tax-exempt interest
                    10,000

                    Long-term capital gains
                    10,000

                    Trustee's commissions and miscellaneous expenses allocable to corpus
                    5,000

                (2) The “income” of the trust determined under section 643(b) which is currently distributable to W is $50,000, consisting of dividends of $30,000, taxable interest of $10,000, and tax-exempt interest of $10,000. The trustee's commissions and miscellaneous expenses allocable to tax-exempt interest amount to $1,000 (10,000/50,000 × $5,000).
                (3) The “distributable net income” determined under section 643(a) amounts to $45,000, computed as follows:

                    Dividends from domestic corporations
                    $30,000

                    Taxable interest
                    10,000

                    Nontaxable interest
                    $10,000

                    Less: Expenses allocable thereto
                    1,000

                    9,000

                    Total
                    49,000

                    Less: Expenses ($5,000 less $1,000 allocable to tax-exempt interest)
                    4,000

                    Distributable net income
                    45,000

                In determining the distributable net income of $45,000, the taxable income of the trust is computed with the following modifications: No deductions are allowed for distributions to W and for personal exemption of the trust (section 643(a) (1) and (2)); capital gains allocable to corpus are excluded and the deduction allowable under section 1202 is not taken into account (section 643(a)(3)): the extraordinary dividends allocated to corpus by the trustee in good faith are excluded (sections 643(a)(4)); and the tax- exempt interest (as adjusted for expenses) and the dividend exclusion of $50 are included) section 643(a) (5) and (7)).

              (b) See paragraph (c) of the example in § 1.661(c)-2 for the computation of distributable net income where there is a charitable contributions deduction.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960. Redesignated, T.D. 6989, 34 FR 732, Jan. 1, 1969]

              § 1.643(f)-1
              Treatment of multiple trusts.
              (a) General rule. For purposes of subchapter J of chapter 1 of subtitle A of Title 26 of the United States Code, two or more trusts will be aggregated and treated as a single trust if such trusts have substantially the same grantor or grantors and substantially the same primary beneficiary or beneficiaries, and if a principal purpose for establishing one or more of such trusts or for contributing additional cash or other property to such trusts is the avoidance of Federal income tax. For purposes of applying this rule, spouses will be treated as one person.
              (b) Applicability date. The provisions of this section apply to taxable years ending after August 16, 2018.
              [T.D. 9847, 84 FR 3014, Feb. 8, 2019]

              § 1.643(h)-1
              Distributions by certain foreign trusts through intermediaries.
              (a) In general—(1) Principal purpose of tax avoidance. Except as provided in paragraph (b) of this section, for purposes of part I of subchapter J, chapter 1 of the Internal Revenue Code, and section 6048, any property (within the meaning of paragraph (f) of this section) that is transferred to a United States person by another person (an intermediary) who has received property from a foreign trust will be treated as property transferred directly by the foreign trust to the United States person if the intermediary received the property from the foreign trust pursuant to a plan one of the principal purposes of which was the avoidance of United States tax.
              (2) Principal purpose of tax avoidance deemed to exist. For purposes of paragraph (a)(1) of this section, a transfer will be deemed to have been made pursuant to a plan one of the principal purposes of which was the avoidance of United States tax if the United States person—
              (i) Is related (within the meaning of paragraph (e) of this section) to a grantor of the foreign trust, or has another relationship with a grantor of the foreign trust that establishes a reasonable basis for concluding that the grantor of the foreign trust would make a gratuitous transfer (within the meaning of § 1.671-2(e)(2)) to the United States person;
              (ii) Receives from the intermediary, within the period beginning twenty-four months before and ending twenty-four months after the intermediary's receipt of property from the foreign trust, either the property the intermediary received from the foreign trust, proceeds from such property, or property in substitution for such property; and
              (iii) Cannot demonstrate to the satisfaction of the Commissioner that—
              (A) The intermediary has a relationship with the United States person that establishes a reasonable basis for concluding that the intermediary would make a gratuitous transfer to the United States person;
              (B) The intermediary acted independently of the grantor and the trustee of the foreign trust;
              (C) The intermediary is not an agent of the United States person under generally applicable United States agency principles; and
              (D) The United States person timely complied with the reporting requirements of section 6039F, if applicable, if the intermediary is a foreign person.
              (b) Exceptions—(1) Nongratuitous transfers. Paragraph (a) of this section does not apply to the extent that either the transfer from the foreign trust to the intermediary or the transfer from the intermediary to the United States person is a transfer that is not a gratuitous transfer within the meaning of § 1.671-2(e)(2).
              (2) Grantor as intermediary. Paragraph (a) of this section does not apply if the intermediary is the grantor of the portion of the trust from which the property that is transferred is derived. For the definition of grantor, see § 1.671-2(e).
              (c) Effect of disregarding intermediary—(1) General rule. Except as provided in paragraph (c)(2) of this section, the intermediary is treated as an agent of the foreign trust, and the property is treated as transferred to the United States person in the year the property is transferred, or made available, by the intermediary to the United States person. The fair market value of the property transferred is determined as of the date of the transfer by the intermediary to the United States person. For purposes of section 665(d)(2), the term taxes imposed on the trust includes any income, war profits, and excess profits taxes imposed by any foreign country or possession of the United States on the intermediary with respect to the property transferred.
              (2) Exception. If the Commissioner determines, or if the taxpayer can demonstrate to the satisfaction of the Commissioner, that the intermediary is an agent of the United States person under generally applicable United States agency principles, the property will be treated as transferred to the United States person in the year the intermediary receives the property from the foreign trust. The fair market value of the property transferred will be determined as of the date of the transfer by the foreign trust to the intermediary. For purposes of section 901(b), any income, war profits, and excess profits taxes imposed by any foreign country or possession of the United States on the intermediary with respect to the property transferred will be treated as having been imposed on the United States person.
              (3) Computation of gross income of intermediary. If property is treated as transferred directly by the foreign trust to a United States person pursuant to this section, the fair market value of such property is not taken into account in computing the gross income of the intermediary (if otherwise required to be taken into account by the intermediary but for paragraph (a) of this section).
              (d) Transfers not in excess of $10,000. This section does not apply if, during the taxable year of the United States person, the aggregate fair market value of all property transferred to such person from all foreign trusts either directly or through one or more intermediaries does not exceed $10,000.
              (e) Related parties. For purposes of this section, a United States person is treated as related to a grantor of a foreign trust if the United States person and the grantor are related for purposes of section 643(i)(2)(B), with the following modifications—
              (1) For purposes of applying section 267 (other than section 267(f)) and section 707(b)(1), “at least 10 percent” is used instead of “more than 50 percent” each place it appears; and
              (2) The principles of section 267(b)(10), using “at least 10 percent” instead of “more than 50 percent,” apply to determine whether two corporations are related.
              (f) Definition of property. For purposes of this section, the term property includes cash.
              (g) Examples. The following examples illustrate the rules of this section. In each example, FT is an irrevocable foreign trust that is not treated as owned by any other person and the fair market value of the property that is transferred exceeds $10,000. The examples are as follows:

                Example 1. Principal purpose of tax avoidance.
                FT was created in 1980 by A, a nonresident alien, for the benefit of his children and their descendants. FT's trustee, T, determines that 1000X of accumulated income should be distributed to A's granddaughter, B, who is a resident alien. Pursuant to a plan with a principal purpose of avoiding the interest charge that would be imposed by section 668, T causes FT to make a gratuitous transfer (within the meaning of § 1.671-2(e)(2)) of 1000X to I, a foreign person. I subsequently makes a gratuitous transfer of 1000X to B. Under paragraph (a)(1) of this section, FT is deemed to have made an accumulation distribution of 1000X directly to B.

                Example 2. United States person unable to demonstrate that intermediary acted independently.
                GM and her daughter, M, are both nonresident aliens. M's daughter, D, is a resident alien. GM creates and funds FT for the benefit of her children. On July 1, 2001, FT makes a gratuitous transfer of XYZ stock to M. M immediately sells the XYZ stock and uses the proceeds to purchase ABC stock. On January 1, 2002, M makes a gratuitous transfer of the ABC stock to D. D is unable to demonstrate that M acted independently of GM and the trustee of FT in making the transfer to D. Under paragraph (a)(2) of this section, FT is deemed to have distributed the ABC stock to D. Under paragraph (c)(1) of this section, M is treated as an agent of FT, and the distribution is deemed to have been made on January 1, 2002.

                Example 3.

                United States person demonstrates that specified conditions are satisfied. Assume the same facts as in Example 2, except that M receives 1000X cash from FT instead of XYZ stock. M gives 1000X cash to D on January 1, 2002. Also assume that M receives annual income of 5000X from her own investments and that M has given D 1000X at the beginning of each year for the past ten years. Based on this and additional information provided by D, D demonstrates to the satisfaction of the Commissioner that M has a relationship with D that establishes a reasonable basis for concluding that M would make a gratuitous transfer to D, that M acted independently of GM and the trustee of FT, that M is not an agent of D under generally applicable United States agency principles, and that D timely complied with the reporting requirements of section 6039F. FT will not be deemed under paragraph (a)(2) of this section to have made a distribution to D.

                Example 4. Transfer to United States person less than 24 months before transfer to intermediary.
                Several years ago, A, a nonresident alien, created and funded FT for the benefit of his children and their descendants. A has a close friend, C, who also is a nonresident alien. A's granddaughter, B, is a resident alien. On December 31, 2001, C makes a gratuitous transfer of 1000X to B. On January 15, 2002, FT makes a gratuitous transfer of 1000X to C. B is unable to demonstrate that C has a relationship with B that would establish a reasonable basis for concluding that C would make a gratuitous transfer to B or that C acted independently of A and the trustee of FT in making the transfer to B. Under paragraph (a)(2) of this section, FT is deemed to have distributed 1000X directly to B. Under paragraph (c)(1) of this section, C is treated as an agent of FT, and the distribution is deemed to have been made on December 31, 2001.

                Example 5. United States person receives property in substitution for property transferred to intermediary.
                GM and her son, S, are both nonresident aliens. S's daughter, GD, is a resident alien. GM creates and funds FT for the benefit of her children and their descendants. On July 1, 2001, FT makes a gratuitous transfer of ABC stock with a fair market value of approximately 1000X to S. On January 1, 2002, S makes a gratuitous transfer of DEF stock with a fair market value of approximately 1000X to GD. GD is unable to demonstrate that S acted independently of GM and the trustee of FT in transferring the DEF stock to GD. Under paragraph (a)(2) of this section, FT is deemed to have distributed the DEF stock to GD. Under paragraph (c)(1) of this section, S is treated as an agent of FT, and the distribution is deemed to have been made on January 1, 2002.

                Example 6. United States person receives indirect loan from foreign trust.
                Several years ago, A, a nonresident alien, created and funded FT for the benefit of her children and their descendants. A's daughter, B, is a resident alien. B needs funds temporarily while she is starting up her own business. If FT were to loan money directly to B, section 643(i) would apply. FT deposits 500X with FB, a foreign bank, on June 30, 2001. On July 1, 2001, FB loans 400X to B. Repayment of the loan is guaranteed by FT's 500X deposit. B is unable to demonstrate to the satisfaction of the Commissioner that FB has a relationship with B that establishes a reasonable basis for concluding that FB would make a loan to B or that FB acted independently of A and the trustee of FT in making the loan. Under paragraph (a)(2) of this section, FT is deemed to have loaned 400X directly to B on July 1, 2001. Under paragraph (c)(1) of this section, FB is treated as an agent of FT. For the treatment of loans from foreign trusts, see section 643(i).

                Example 7. United States person demonstrates that specified conditions are satisfied.
                GM, a nonresident alien, created and funded FT for the benefit of her children and their descendants. One of GM's children is M, who is a resident alien. During the year 2001, FT makes a gratuitous transfer of 500X to M. M reports the 500X on Form 3520 as a distribution received from a foreign trust. During the year 2002, M makes a gratuitous transfer of 400X to her son, S, who also is a resident alien. M files a Form 709 treating the gratuitous transfer to S as a gift. Based on this and additional information provided by S, S demonstrates to the satisfaction of the Commissioner that M has a relationship with S that establishes a reasonable basis for concluding that M would make a gratuitous transfer to S, that M acted independently of GM and the trustee of FT, and that M is not an agent of S under generally applicable United States agency principles. FT will not be deemed under paragraph (a)(2) of this section to have made a distribution to S.M

                Example 8. Intermediary as agent of trust; increase in FMV.
                A, a nonresident alien, created and funded FT for the benefit of his children and their descendants. On December 1, 2001, FT makes a gratuitous transfer of XYZ stock with a fair market value of 85X to B, a nonresident alien. On November 1, 2002, B sells the XYZ stock to a third party in an arm's length transaction for 100X in cash. On November 1, 2002, B makes a gratuitous transfer of 98X to A's grandson, C, a resident alien. C is unable to demonstrate to the satisfaction of the Commissioner that B acted independently of A and the trustee of FT in making the transfer. Under paragraph (a)(2) of this section, FT is deemed to have made a distribution directly to C. Under paragraph (c)(1) of this section, B is treated as an agent of FT, and FT is deemed to have distributed 98X to C on November 1, 2002.

                Example 9. Intermediary as agent of United States person; increase in FMV.
                Assume the same facts as in Example 8, except that the Commissioner determines that B is an agent of C under generally applicable United States agency principles. Under paragraph (c)(2) of this section, FT is deemed to have distributed 85X to C on December 1, 2001. C must take the gain of 15X into account in the year 2002.

                Example 10. Intermediary as agent of trust; decrease in FMV.
                Assume the same facts as in Example 8, except that the value of the XYZ stock on November 1, 2002, is only 80X. Instead of selling the XYZ stock to a third party and transferring cash to C, B transfers the XYZ stock to C in a gratuitous transfer. Under paragraph (c)(1) of this section, FT is deemed to have distributed XYZ stock with a value of 80X to C on November 1, 2002.

                Example 11. Intermediary as agent of United States person; decrease in FMV.
                Assume the same facts as in Example 10, except that the Commissioner determines that B is an agent of C under generally applicable United States agency principles. Under paragraph (c)(2) of this section, FT is deemed to have distributed XYZ stock with a value of 85X to C on December 1, 2001.

              (h) Effective date. The rules of this section are applicable to transfers made to United States persons after August 10, 1999.
              [T.D. 8831, 64 FR 43272, Aug. 10, 1999, as amended by T.D. 8890, 65 FR 41332, July 5, 2000]

            pooled income fund actuarial tables applicable before may 1, 2009

              § 1.642(c)-6A
              Valuation of charitable remainder interests for which the valuation date is before May 1, 2009.
              (a) Valuation of charitable remainder interests for which the valuation date is before January 1, 1952. There was no provision for the qualification of pooled income funds under section 642 until 1969. See § 20.2031-7A(a) of this chapter (Estate Tax Regulations) for the determination of the present value of a charitable remainder interest created before January 1, 1952.
              (b) Valuation of charitable remainder interests for which the valuation date is after December 31, 1951, and before January 1, 1971. No charitable deduction is allowable for a transfer to a pooled income fund for which the valuation date is after the effective dates of the Tax Reform Act of 1969 unless the pooled income fund meets the requirements of section 642(c)(5). See § 20.2031-7A(b) of this chapter (Estate Tax Regulations) for the determination of the present value of a charitable remainder interest for which the valuation date is after December 31, 1951, and before January 1, 1971.
              (c) Present value of remainder interest in the case of transfers to pooled income funds for which the valuation date is after December 31, 1970, and before December 1, 1983. For the determination of the present value of a remainder interest in property transferred to a pooled income fund for which the valuation date is after December 31, 1970, and before December 1, 1983, see § 20.2031-7A(c) of this chapter (Estate Tax Regulations) and former § 1.642(c)-6(e) (as contained in the 26 CFR part 1 edition revised as of April 1, 1994).
              (d) Present value of remainder interest dependent on the termination of one life in the case of transfers to pooled income funds made after November 30, 1983, for which the valuation date is before May 1, 1989—(1) In general. For transfers to pooled income funds made after November 30, 1983, for which the valuation date is before May 1, 1989, the present value of the remainder interest at the time of the transfer of property to the fund is determined by computing the present value (at the time of the transfer) of the life income interest in the transferred property (as determined under paragraph (d)(2) of this section) and subtracting that value from the fair market value of the transferred property on the valuation date. The present value of a remainder interest that is dependent on the termination of the life of one individual is computed by use of Table G in paragraph (d)(4) of this section. For purposes of the computation under this section, the age of an individual is to be taken as the age of the individual at the individual's nearest birthday.
              (2) Present value of life income interest. The present value of the life income interest in property transferred to a pooled income fund shall be computed on the basis of:
              (i) Life contingencies determined from the values of lx that are set forth in Table LN of § 20.2031-7A(d)(6) of this chapter (Estate Tax Regulations); 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 (d)(2), the yearly rate of return of a pooled income fund is determined as provided in § 1.642(c)-6(c) unless the highest yearly rate of return is deemed to be 9 percent. For purposes of this paragraph (d)(2), 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 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. If a pooled income fund has been in existence less than 3 taxable years immediately preceding the taxable year in which the transfer of property to the fund is made, the highest yearly rate of return is deemed to be 9 percent.

              (3) Computation of value of remainder interest. The factor which is used in determining the present value of the remainder interest is the factor under the appropriate yearly rate of return in column (2) of Table G opposite the number in column (1) which corresponds to the age of the individual upon whose life the value of the remainder interest is based. If the yearly rate of return is a percentage which is between yearly rates of return for which factors are provided in Table G, a linear interpolation must be made. The present value of the remainder interest is determined by multiplying, by the factor determined under this paragraph (d)(3), the fair market value on the appropriate valuation date. If the yearly rate of return is below 2.2 percent or above 14 percent, see § 1.642(c)-6(b). This paragraph (d)(3) may be illustrated by the following example:

                Example.
                A, who will be 50 years old on April 15, 1985, transfers $100,000 to a pooled income fund on January 1, 1985, and retains a life income interest in such property. The highest yearly rate of return earned by the fund for its 3 preceding taxable years is 9.9 percent. In Table G the figure in column (2) opposite 50 years under 9.8 percent is .15653 and under 10 percent is .15257. The present value of the remainder interest is $15,455, computed as follows:

                    Factor at 9.8 percent for person aged 50
                    .15653

                    Factor at 10 percent for person aged 50
                    .15257

                    Difference
                    .00396

                    Interpolation adjustment:

                  EC14NO91.133

                    Factor at 9.8 percent for person aged 50
                    0.15653

                    Less:

                    Interpolation adjustment
                    .00198

                    Interpolated factor
                    .15455

                    Present value of remainder interest ($100,000 × .15455
                    $15,455

              (4) Actuarial tables. The following tables shall be used in the application of the provisions of this section.

                Table G
                Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Yearly rate of return
                  2.2%
                  2.4%
                  2.6%
                  2.8%
                  3.0%

                  0
                  .23930
                  .21334
                  .19077
                  .17113
                  .15401

                  1
                  .22891
                  .20224
                  .17903
                  .15880
                  .14114

                  2
                  .23297
                  .20610
                  .18265
                  .16218
                  .14429

                  3
                  .23744
                  .21035
                  .18669
                  .16600
                  .14787

                  4
                  .24212
                  .21485
                  .19098
                  .17006
                  .15171

                  5
                  .24701
                  .21955
                  .19547
                  .17434
                  .15577

                  6
                  .25207
                  .22442
                  .20015
                  .17880
                  .16001

                  7
                  .25726
                  .22944
                  .20497
                  .18342
                  .16441

                  8
                  .26259
                  .23461
                  .20995
                  .18820
                  .16898

                  9
                  .26809
                  .23995
                  .21511
                  .19315
                  .17373

                  10
                  .27373
                  .24544
                  .22043
                  .19828
                  .17865

                  11
                  .27953
                  .25110
                  .22592
                  .20358
                  .18375

                  12
                  .28546
                  .25690
                  .23156
                  .20904
                  .18902

                  13
                  .29149
                  .26280
                  .23731
                  .21462
                  .19440

                  14
                  .29757
                  .26877
                  .24312
                  .22026
                  .19986

                  15
                  .30368
                  .27476
                  .24896
                  .22593
                  .20535

                  16
                  .30978
                  .28075
                  .25481
                  .23161
                  .21085

                  17
                  .31589
                  .28676
                  .26068
                  .23732
                  .21637

                  18
                  .32204
                  .29280
                  .26659
                  .24306
                  .22193

                  19
                  .32825
                  .29892
                  .27257
                  .24889
                  .22759

                  20
                  .33457
                  .30514
                  .27867
                  .25484
                  .23336

                  21
                  .34099
                  .31148
                  .28489
                  .26092
                  .23927

                  22
                  .34751
                  .31794
                  .29124
                  .26712
                  .24532

                  23
                  .35416
                  .32452
                  .29773
                  .27348
                  .25152

                  24
                  .36096
                  .33127
                  .30439
                  .28002
                  .25791

                  25
                  .36793
                  .33821
                  .31124
                  .28676
                  .26452

                  26
                  .37509
                  .34535
                  .31832
                  .29374
                  .27136

                  27
                  .38244
                  .35269
                  .32560
                  .30093
                  .27844

                  28
                  .38998
                  .36023
                  .33311
                  .30836
                  .28577

                  29
                  .39767
                  .36795
                  .34080
                  .31599
                  .29330

                  30
                  .40553
                  .37584
                  .34868
                  .32382
                  .30104

                  31
                  .41352
                  .38388
                  .35672
                  .33182
                  .30897

                  32
                  .42165
                  .39208
                  .36494
                  .34001
                  .31710

                  33
                  .42993
                  .40044
                  .37333
                  .34839
                  .32543

                  34
                  .43834
                  .40894
                  .38188
                  .35694
                  .33395

                  35
                  .44689
                  .41760
                  .39060
                  .36567
                  .34266

                  36
                  .45556
                  .42640
                  .39947
                  .37458
                  .35156

                  37
                  .46435
                  .43534
                  .40850
                  .38365
                  .36063

                  38
                  .47325
                  .44440
                  .41767
                  .39288
                  .36987

                  39
                  .48226
                  .45358
                  .42696
                  .40225
                  .37927

                  40
                  .49136
                  .46288
                  .43640
                  .41177
                  .38884

                  41
                  .50056
                  .47228
                  .44596
                  .42143
                  .39856

                  42
                  .50988
                  .48182
                  .45566
                  .43125
                  .40846

                  43
                  .51927
                  .49145
                  .46547
                  .44120
                  .41850

                  44
                  .52874
                  .50118
                  .47540
                  .45128
                  .42869

                  45
                  .53828
                  .51099
                  .48543
                  .46146
                  .43899

                  46
                  .54788
                  .52088
                  .49554
                  .47176
                  .44943

                  47
                  .55754
                  .53083
                  .50574
                  .48216
                  .45998

                  48
                  .56726
                  .54087
                  .51604
                  .49267
                  .47065

                  49
                  .57703
                  .55097
                  .52642
                  .50327
                  .48144

                  50
                  .58685
                  .56114
                  .53688
                  .51398
                  .49234

                  51
                  .59670
                  .57136
                  .54740
                  .52476
                  .50333

                  52
                  .60658
                  .58161
                  .55798
                  .53560
                  .51441

                  53
                  .61647
                  .59189
                  .56859
                  .54651
                  .52556

                  54
                  .62635
                  .60217
                  .57923
                  .55744
                  .53675

                  55
                  .63622
                  .61246
                  .58987
                  .56840
                  .54798

                  56
                  .64606
                  .62273
                  .60052
                  .57937
                  .55923

                  57
                  .65589
                  .63299
                  .61117
                  .59037
                  .57052

                  58
                  .66569
                  .64324
                  .62181
                  .60136
                  .58183

                  59
                  .67546
                  .65347
                  .63246
                  .61237
                  .59316

                  60
                  .68521
                  .66368
                  .64309
                  .62338
                  .60450

                  61
                  .69492
                  .67388
                  .65372
                  .63440
                  .61587

                  62
                  .70461
                  .68406
                  .66434
                  .64542
                  .62726

                  63
                  .71425
                  .69420
                  .67494
                  .65643
                  .63865

                  64
                  .72384
                  .70430
                  .68550
                  .66742
                  .65002

                  65
                  .73336
                  .71434
                  .69602
                  .67837
                  .66137

                  66
                  .74281
                  .72431
                  .70647
                  .68926
                  .67267

                  67
                  .75216
                  .73419
                  .71684
                  .70009
                  .68391

                  68
                  .76143
                  .74399
                  .72714
                  .71085
                  .69509

                  69
                  .77060
                  .75370
                  .73735
                  .72153
                  .70622

                  70
                  .77969
                  .76334
                  .74750
                  .73215
                  .71728

                  71
                  .78870
                  .77290
                  .75758
                  .74272
                  .72830

                  72
                  .79764
                  .78240
                  .76760
                  .75323
                  .73928

                  73
                  .80646
                  .79178
                  .77751
                  .76364
                  .75016

                  74
                  .81511
                  .80099
                  .78725
                  .77387
                  .76086

                  75
                  .82353
                  .80995
                  .79674
                  .78386
                  .77132

                  76
                  .83169
                  .81866
                  .80596
                  .79357
                  .78149

                  77
                  .83960
                  .82710
                  .81491
                  .80301
                  .79139

                  78
                  .84727
                  .83530
                  .82360
                  .81218
                  .80101

                  79
                  .85473
                  .84328
                  .83207
                  .82112
                  .81041

                  80
                  .86201
                  .85106
                  .84034
                  .82986
                  .81960

                  81
                  .86905
                  .85861
                  .84837
                  .83835
                  .82853

                  82
                  .87585
                  .86589
                  .85612
                  .84655
                  .83717

                  83
                  .88239
                  .87291
                  .86360
                  .85447
                  .84552

                  84
                  .88873
                  .87971
                  .87085
                  .86216
                  .85362

                  85
                  .89487
                  .88630
                  .87789
                  .86963
                  .86150

                  86
                  .90070
                  .89258
                  .88459
                  .87674
                  .86901

                  87
                  .90609
                  .89838
                  .89079
                  .88332
                  .87597

                  88
                  .91106
                  .90372
                  .89650
                  .88939
                  .88239

                  89
                  .91570
                  .90872
                  .90184
                  .89507
                  .88839

                  90
                  .92014
                  .91350
                  .90696
                  .90051
                  .89416

                  91
                  .92435
                  .91804
                  .91182
                  .90569
                  .89964

                  92
                  .92822
                  .92222
                  .91630
                  .91045
                  .90469

                  93
                  .93170
                  .92597
                  .92032
                  .91474
                  .90923

                  94
                  .93477
                  .92929
                  .92387
                  .91853
                  .91325

                  95
                  .93743
                  .93216
                  .92695
                  .92181
                  .91673

                  96
                  .93967
                  .93458
                  .92955
                  .92458
                  .91966

                  97
                  .94167
                  .93674
                  .93186
                  .92704
                  .92228

                  98
                  .94342
                  .93863
                  .93389
                  .92921
                  .92457

                  99
                  94508
                  94041
                  .93580
                  .93124
                  .92673

                  100
                  .94672
                  .94218
                  .93770
                  .93326
                  .92887

                  101
                  .94819
                  .94377
                  .93940
                  .93508
                  .93080

                  102
                  .94979
                  .94550
                  .94125
                  .93704
                  .93288

                  103
                  .95180
                  .94766
                  .94357
                  .93952
                  .93550

                  104
                  .95377
                  .94979
                  .94585
                  .94194
                  .93806

                  105
                  .95663
                  .95288
                  .94916
                  .94547
                  .94181

                  106
                  .96101
                  .95762
                  .95425
                  .95091
                  .94760

                  107
                  .96688
                  .96398
                  .96110
                  .95824
                  .95539

                  108
                  .97569
                  .97354
                  .97141
                  .96928
                  .96717

                  109
                  .98924
                  .98828
                  .98733
                  .98638
                  .98544

                Table G
                Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Yearly rate of return
                  3.2%
                  3.4%
                  3.6%
                  3.8%
                  4.0%

                  0
                  .13908
                  .12603
                  .11461
                  .10461
                  .09583

                  1
                  .12570
                  .11220
                  .10036
                  .08998
                  .08086

                  2
                  .12862
                  .11489
                  .10284
                  .09225
                  .08293

                  3
                  .13198
                  .11802
                  .10576
                  .09496
                  .08544

                  4
                  .13559
                  .12141
                  .10893
                  .09793
                  .08821

                  5
                  .13943
                  .12503
                  .11234
                  .10112
                  .09121

                  6
                  .14345
                  .12884
                  .11593
                  .10451
                  .09439

                  7
                  .14763
                  .13280
                  .11968
                  .10805
                  .09773

                  8
                  .15198
                  .13694
                  .12360
                  .11176
                  .10125

                  9
                  .15652
                  .14126
                  .12771
                  .11567
                  .10495

                  10
                  .16123
                  .14576
                  .13200
                  .11975
                  .10883

                  11
                  .16613
                  .15045
                  .13648
                  .12402
                  .11290

                  12
                  .17119
                  .15531
                  .14113
                  .12847
                  .11715

                  13
                  .17638
                  .16029
                  .14591
                  .13304
                  .12152

                  14
                  .18164
                  .16535
                  .15076
                  .13769
                  .12597

                  15
                  .18693
                  .17044
                  .15565
                  .14238
                  .13045

                  16
                  .19224
                  .17554
                  .16055
                  .14707
                  .13494

                  17
                  .19756
                  .18066
                  .16547
                  .15178
                  .13945

                  18
                  .20294
                  .18584
                  .17044
                  .15655
                  .14401

                  19
                  .20840
                  .19110
                  .17550
                  .16140
                  .14866

                  20
                  .21399
                  .19650
                  .18069
                  .16639
                  .15344

                  21
                  .21972
                  .20203
                  .18602
                  .17152
                  .15836

                  22
                  .22559
                  .20771
                  .19151
                  .17680
                  .16344

                  23
                  .23162
                  .21356
                  .19716
                  .18225
                  .16869

                  24
                  .23784
                  .21960
                  .20301
                  .18791
                  .17414

                  25
                  .24429
                  .22588
                  .20910
                  .19380
                  .17984

                  26
                  .25098
                  .23240
                  .21545
                  .19996
                  .18581

                  27
                  .25792
                  .23918
                  .22206
                  .20639
                  .19205

                  28
                  .26512
                  .24623
                  .22894
                  .21310
                  .19858

                  29
                  .27253
                  .25350
                  .23605
                  .22004
                  .20534

                  30
                  .28016
                  .26100
                  .24341
                  .22724
                  .21236

                  31
                  .28799
                  .26871
                  .25097
                  .23464
                  .21961

                  32
                  .29603
                  .27664
                  .25877
                  .24230
                  .22710

                  33
                  .30428
                  .28478
                  .26679
                  .25018
                  .23484

                  34
                  .31273
                  .29314
                  .27504
                  .25830
                  .24280

                  35
                  .32139
                  .30172
                  .28351
                  .26665
                  .25102

                  36
                  .33024
                  .31050
                  .29220
                  .27523
                  .25948

                  37
                  .33929
                  .31949
                  .30111
                  .28404
                  .26816

                  38
                  .34851
                  .32867
                  .31022
                  .29305
                  .27707

                  39
                  .35791
                  .33804
                  .31953
                  .30228
                  .28620

                  40
                  .36749
                  .34759
                  .32904
                  .31172
                  .29555

                  41
                  .37724
                  .35733
                  .33874
                  .32137
                  .30512

                  42
                  .38717
                  .36727
                  .34866
                  .33124
                  .31493

                  43
                  .39727
                  .37739
                  .35877
                  .34132
                  .32495

                  44
                  .40752
                  .38768
                  .36906
                  .35159
                  .33518

                  45
                  .41791
                  .39811
                  .37952
                  .36204
                  .34560

                  46
                  .42844
                  .40871
                  .39014
                  .37267
                  .35621

                  47
                  .43910
                  .41944
                  .40092
                  .38347
                  .36701

                  48
                  .44990
                  .43034
                  .41188
                  .39446
                  .37801

                  49
                  .46083
                  .44137
                  .42299
                  .40562
                  .38919

                  50
                  .47189
                  .45256
                  .43427
                  .41695
                  .40056

                  51
                  .48306
                  .46386
                  .44567
                  .42844
                  .41209

                  52
                  .49432
                  .47528
                  .45721
                  .44006
                  .42378

                  53
                  .50567
                  .48679
                  .46886
                  .45182
                  .43562

                  54
                  .51708
                  .49838
                  .48060
                  .46367
                  .44756

                  55
                  .52854
                  .51004
                  .49242
                  .47563
                  .45962

                  56
                  .54004
                  .52175
                  .50430
                  .48766
                  .47177

                  57
                  .55159
                  .53352
                  .51626
                  .49978
                  .48402

                  58
                  .56316
                  .54533
                  .52827
                  .51196
                  .49636

                  59
                  .57478
                  .55719
                  .54036
                  .52424
                  .50879

                  60
                  .58643
                  .56910
                  .55250
                  .53658
                  .52131

                  61
                  .59811
                  .58107
                  .56471
                  .54901
                  .53393

                  62
                  .60982
                  .59307
                  .57697
                  .56150
                  .54662

                  63
                  .62155
                  .60510
                  .58928
                  .57405
                  .55940

                  64
                  .63327
                  .61714
                  .60161
                  .58664
                  .57222

                  65
                  .64498
                  .62918
                  .61395
                  .59926
                  .58508

                  66
                  .65666
                  .64120
                  .62628
                  .61188
                  .59796

                  67
                  .66829
                  .65319
                  .63859
                  .62448
                  .61083

                  68
                  .67986
                  .66512
                  .65086
                  .63706
                  .62370

                  69
                  .69139
                  .67702
                  .66311
                  .64963
                  .63656

                  70
                  .70286
                  .68888
                  .67533
                  .66218
                  .64942

                  71
                  .71431
                  .70073
                  .68754
                  .67474
                  .66231

                  72
                  .72572
                  .71255
                  .69974
                  .68730
                  .67520

                  73
                  .73704
                  .72429
                  .71188
                  .69980
                  .68805

                  74
                  .74819
                  .73586
                  .72384
                  .71214
                  .70075

                  75
                  .75909
                  .74718
                  .73557
                  .72424
                  .71320

                  76
                  .76971
                  .75822
                  .74700
                  .73606
                  .72538

                  77
                  .78004
                  .76897
                  .75815
                  .74758
                  .73726

                  78
                  .79010
                  .77944
                  .76902
                  .75883
                  .74886

                  79
                  .79993
                  .78968
                  .77965
                  .76984
                  .76023

                  80
                  .80955
                  .79971
                  .79008
                  .78064
                  .77140

                  81
                  .81891
                  .80948
                  .80024
                  .79118
                  .78230

                  82
                  .82796
                  .81894
                  .81009
                  .80140
                  .79288

                  83
                  .83672
                  .82810
                  .81962
                  .81131
                  .80314

                  84
                  .84525
                  .83700
                  82891
                  .82096
                  .81314

                  85
                  .85352
                  .84567
                  .83795
                  .83037
                  .82291

                  86
                  .86141
                  .85394
                  .84659
                  .83936
                  .83224

                  87
                  .86874
                  .86162
                  .85461
                  .84771
                  .84092

                  88
                  .87549
                  .86870
                  .86201
                  .85542
                  .84893

                  89
                  .88182
                  .87534
                  .86895
                  .86266
                  .85645

                  90
                  .88789
                  .88171
                  .87562
                  86961
                  .86369

                  91
                  .89367
                  .88779
                  .88198
                  .87625
                  .87059

                  92
                  .89900
                  .89338
                  .88784
                  .88237
                  .87697

                  93
                  .90379
                  .89842
                  .89312
                  .88788
                  .88271

                  94
                  .90803
                  .90288
                  .89780
                  .89277
                  .88781

                  95
                  .91171
                  .90675
                  .90185
                  .89701
                  .89223

                  96
                  .91481
                  .91001
                  .90527
                  .90058
                  .89594

                  97
                  .91757
                  .91291
                  .90831
                  .90376
                  .89926

                  98
                  .91999
                  .91546
                  .91098
                  .90655
                  .90217

                  99
                  .92227
                  .91786
                  .91349
                  .90917
                  .90490

                  100
                  .92453
                  .92023
                  .91598
                  .91177
                  .90761

                  101
                  .92656
                  .92236
                  .91821
                  .91410
                  .91003

                  102
                  .92875
                  .92467
                  .92063
                  .91662
                  .91266

                  103
                  .93152
                  .92758
                  .92367
                  .91980
                  91597

                  104
                  .93423
                  .93042
                  .92665
                  .92291
                  .91920

                  105
                  .93818
                  .93458
                  .93101
                  .92747
                  .92395

                  106
                  .94430
                  .94104
                  .93779
                  .93457
                  .93127

                  107
                  95256
                  .94975
                  .94696
                  .94418
                  .94143

                  108
                  .96507
                  96298
                  .96090
                  .95883
                  .95676

                  109
                  .98450
                  .98356
                  .98263
                  .98170
                  .98077

                Table G
                Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Yearly rate of return
                  4.2%
                  4.4%
                  4.6%
                  4.8%
                  5.0%

                  0
                  .08811
                  .08132
                  .07534
                  .07006
                  .06539

                  1
                  .07283
                  .06576
                  .05952
                  .05400
                  .04912

                  2
                  .07471
                  .06746
                  .06106
                  .05539
                  .05037

                  3
                  .07704
                  .06962
                  .06304
                  .05722
                  .05205

                  4
                  .07962
                  .07202
                  .06528
                  .05930
                  .05398

                  5
                  .08243
                  .07464
                  .06773
                  .06159
                  .05612

                  6
                  .08542
                  .07745
                  .07037
                  .06406
                  .05844

                  7
                  .08857
                  .08042
                  .07316
                  .06669
                  .06091

                  8
                  .09189
                  .08355
                  .07612
                  .06948
                  .06354

                  9
                  .09540
                  .08687
                  .07926
                  .07245
                  .06635

                  10
                  .09908
                  .09037
                  .08258
                  .07560
                  .06934

                  11
                  .10296
                  .09406
                  .08609
                  .07894
                  .07251

                  12
                  .10701
                  .09793
                  .08977
                  .08245
                  .07586

                  13
                  .11119
                  .10191
                  .09358
                  .08608
                  .07932

                  14
                  .11544
                  .10597
                  .09745
                  .08978
                  .08285

                  15
                  .11972
                  .11007
                  .10136
                  .09350
                  .08640

                  16
                  .12402
                  .11416
                  .10527
                  .09723
                  .08995

                  17
                  .12832
                  .11827
                  .10919
                  .10096
                  .09351

                  18
                  .13268
                  .12243
                  .11315
                  .10474
                  .09711

                  19
                  .13712
                  .12667
                  .11720
                  .10860
                  .10078

                  20
                  .14170
                  .13105
                  .12138
                  .11259
                  .10459

                  21
                  .14642
                  .13557
                  .12570
                  .11671
                  .10853

                  22
                  .15129
                  .14024
                  .13017
                  .12099
                  .11261

                  23
                  .15634
                  .14508
                  .13481
                  .12544
                  .11687

                  24
                  .16159
                  .15013
                  .13967
                  .13009
                  .12133

                  25
                  .16709
                  .15543
                  .14477
                  .13500
                  .12604

                  26
                  .17286
                  .16101
                  .15014
                  .14018
                  .13103

                  27
                  .17891
                  .16686
                  .15580
                  .14564
                  .13630

                  28
                  .18525
                  .17301
                  .16175
                  .15140
                  .14187

                  29
                  .19183
                  .17940
                  .16796
                  .15742
                  .14770

                  30
                  .19867
                  .18606
                  .17443
                  .16370
                  .15380

                  31
                  .20574
                  .19295
                  .18114
                  .17023
                  .16013

                  32
                  .21307
                  .20010
                  .18811
                  .17702
                  .16674

                  33
                  .22064
                  .20751
                  .19535
                  .18407
                  .17362

                  34
                  .22846
                  .21516
                  .20283
                  .19138
                  .18075

                  35
                  .23653
                  .22307
                  .21058
                  .19896
                  .18816

                  36
                  .24484
                  .23124
                  .21859
                  .20681
                  .19584

                  37
                  .25340
                  .23966
                  .22685
                  .21492
                  .20379

                  38
                  .26219
                  .24831
                  .23536
                  .22328
                  .21199

                  39
                  .27120
                  .25720
                  .24411
                  .23188
                  .22044

                  40
                  .28045
                  .26633
                  .25311
                  .24075
                  .22916

                  41
                  .28992
                  .27569
                  .26236
                  .24986
                  .23814

                  42
                  .29965
                  .28532
                  .27188
                  .25926
                  .24741

                  43
                  .30960
                  .29518
                  .28163
                  .26890
                  .25693

                  44
                  .31977
                  .30527
                  .29164
                  .27880
                  .26671

                  45
                  .33013
                  .31557
                  .30185
                  .28892
                  .27673

                  46
                  .34071
                  .32609
                  .31230
                  .29929
                  .28700

                  47
                  .35148
                  .33681
                  .32296
                  .30988
                  .29750

                  48
                  .36246
                  .34777
                  .33387
                  .32072
                  .30826

                  49
                  .37364
                  .35893
                  .34499
                  .33179
                  .31927

                  50
                  .38503
                  .37030
                  .35634
                  .34310
                  .33053

                  51
                  .39659
                  .38187
                  .36790
                  .35462
                  .34201

                  52
                  .40832
                  .39362
                  .37965
                  .36636
                  .35371

                  53
                  .42021
                  .40554
                  .39158
                  .37829
                  .36562

                  54
                  .43222
                  .41760
                  .40367
                  .39039
                  .37771

                  55
                  .44436
                  .42980
                  .41591
                  .40264
                  .38997

                  56
                  .45660
                  .44212
                  .42828
                  .41504
                  .40239

                  57
                  .46897
                  .45456
                  .44079
                  .42760
                  .41498

                  58
                  .48142
                  .46712
                  .45342
                  .44030
                  .42771

                  59
                  .49399
                  .47980
                  .46620
                  .45314
                  .44062

                  60
                  .50666
                  .49260
                  .47910
                  .46613
                  .45367

                  61
                  .51944
                  .50552
                  .49214
                  .47927
                  .46690

                  62
                  .53232
                  .51856
                  .50531
                  .49256
                  .48028

                  63
                  .54529
                  .53169
                  .51860
                  .50598
                  .49381

                  64
                  .55832
                  .54491
                  .53198
                  .51950
                  .50746

                  65
                  .57140
                  .55819
                  .54544
                  .53312
                  .52121

                  66
                  .58451
                  .57152
                  .55895
                  .54681
                  .53506

                  67
                  .59763
                  .58486
                  .57251
                  .56054
                  .54896

                  68
                  .61076
                  .59823
                  .58609
                  .57432
                  .56292

                  69
                  .62390
                  .61162
                  .59971
                  .58816
                  .57695

                  70
                  .63705
                  .62503
                  .61337
                  .60204
                  .59104

                  71
                  .65023
                  .63849
                  .62709
                  .61600
                  .60522

                  72
                  .66344
                  .65199
                  .64086
                  .63003
                  .61949

                  73
                  .67661
                  .66547
                  .65463
                  .64407
                  .63378

                  74
                  .68964
                  .67882
                  .66827
                  .65798
                  .64796

                  75
                  .70243
                  .69193
                  .68168
                  .67168
                  .66192

                  76
                  .71495
                  .70477
                  .69482
                  .68511
                  .67563

                  77
                  .72717
                  .71731
                  .70768
                  .69826
                  .68905

                  78
                  .73912
                  .72959
                  .72026
                  .71114
                  .70221

                  79
                  .75083
                  .74163
                  .73262
                  .72379
                  .71515

                  80
                  .76235
                  .75348
                  .74479
                  .73627
                  .72792

                  81
                  .77360
                  .76506
                  .75669
                  .74848
                  .74043

                  82
                  .78452
                  .77632
                  .76827
                  .76036
                  .75260

                  83
                  .79513
                  .78725
                  .77952
                  .77192
                  .76446

                  84
                  .80547
                  .79792
                  .79051
                  .78322
                  .77606

                  85
                  .81557
                  .80836
                  .80126
                  .79429
                  .78742

                  86
                  .82524
                  .81835
                  .81157
                  .80489
                  .79832

                  87
                  .83423
                  .82764
                  .82115
                  .81477
                  .80847

                  88
                  .84253
                  .83623
                  .83002
                  .82390
                  .81787

                  89
                  .85033
                  .84430
                  .83836
                  .83250
                  .82672

                  90
                  .85784
                  .85208
                  .84639
                  .84079
                  .83525

                  91
                  .86502
                  .85951
                  .85408
                  .84871
                  .84342

                  92
                  .87164
                  .86638
                  .86118
                  .85605
                  .85098

                  93
                  .87761
                  .87257
                  .86759
                  .86267
                  .85781

                  94
                  .88290
                  .87806
                  .87327
                  .86854
                  .86386

                  95
                  .88750
                  .88282
                  .87820
                  .87364
                  .86913

                  96
                  .89136
                  .88683
                  .88236
                  .87793
                  .87355

                  97
                  .89481
                  .89041
                  .88606
                  .88176
                  .87750

                  98
                  .89783
                  .89354
                  .88930
                  .88511
                  .88096

                  99
                  .90067
                  .89649
                  .89235
                  .88826
                  .88420

                  100
                  .90349
                  .89941
                  .89538
                  .89138
                  .88743

                  101
                  .90600
                  .90202
                  .89807
                  .89416
                  .89029

                  102
                  .90873
                  .90484
                  .90099
                  .89717
                  .89339

                  103
                  .91217
                  .90841
                  .90468
                  .90099
                  .99733

                  104
                  .91553
                  .91188
                  .90827
                  .90469
                  .90114

                  105
                  .92047
                  .91701
                  .91358
                  .91018
                  .90680

                  106
                  .92819
                  .92504
                  .92191
                  .91880
                  .91571

                  107
                  .93868
                  .93596
                  .93325
                  .93056
                  .92788

                  108
                  .95471
                  .95267
                  .95064
                  .94862
                  .94661

                  109
                  .97985
                  .97893
                  .97801
                  .97710
                  .97619

                Table G
                Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Yearly rate of return
                  5.2%
                  5.4%
                  5.6%
                  5.8%
                  6.0%

                  0
                  .06126
                  .05759
                  .05433
                  .05143
                  .04884

                  1
                  .04480
                  .04096
                  .03754
                  .03450
                  .03179

                  2
                  .04591
                  .04194
                  .03841
                  .03527
                  .03246

                  3
                  .04745
                  .04336
                  .03972
                  .03646
                  .03355

                  4
                  .04924
                  .04502
                  .04125
                  .03789
                  .03487

                  5
                  .05124
                  .04689
                  .04300
                  .03952
                  .03639

                  6
                  .05342
                  .04893
                  .04492
                  .04131
                  .03808

                  7
                  .05574
                  .05112
                  .04697
                  .04324
                  .03990

                  8
                  .05822
                  .05346
                  .04918
                  .04533
                  .04186

                  9
                  .06089
                  .05598
                  .05156
                  .04759
                  .04400

                  10
                  .06372
                  .05866
                  .05411
                  .05000
                  .04630

                  11
                  .06673
                  .06153
                  .05684
                  .05260
                  .04877

                  12
                  .06992
                  .06457
                  .05973
                  .05536
                  .05141

                  13
                  .07322
                  .06772
                  .06274
                  .05824
                  .05415

                  14
                  .07659
                  .07093
                  .06581
                  .06117
                  .05695

                  15
                  .07998
                  .07417
                  .06890
                  .06411
                  .05976

                  16
                  .08337
                  .07739
                  .07197
                  .06704
                  .06255

                  17
                  .08675
                  .08062
                  .07504
                  .06996
                  .06533

                  18
                  .09018
                  .08387
                  .07813
                  .07290
                  .06813

                  19
                  .09367
                  .08720
                  .08130
                  .07591
                  .07099

                  20
                  .09730
                  .09065
                  .08458
                  .07904
                  .07397

                  21
                  .10106
                  .09423
                  .08800
                  .08229
                  .07707

                  22
                  .10496
                  .09796
                  .09155
                  .08568
                  .08030

                  23
                  .10903
                  .10185
                  .09526
                  .08923
                  .08368

                  24
                  .11330
                  .10594
                  .09918
                  .09297
                  .08726

                  25
                  .11782
                  .11028
                  .10334
                  .09696
                  .09108

                  26
                  .12262
                  .11489
                  .10778
                  .10122
                  .09518

                  27
                  .12771
                  .11979
                  .11249
                  .10576
                  .09955

                  28
                  .13309
                  .12499
                  .11751
                  .11060
                  .10421

                  29
                  .13873
                  .13044
                  .12278
                  .11570
                  .10914

                  30
                  .14464
                  .13617
                  .12833
                  .12107
                  .11433

                  31
                  .15079
                  .14214
                  .13412
                  .12668
                  .11977

                  32
                  .15722
                  .14838
                  .14018
                  .13256
                  .12548

                  33
                  .16391
                  .15490
                  .14652
                  .13873
                  .13147

                  34
                  .17087
                  .16168
                  .15312
                  .14515
                  .13772

                  35
                  .17811
                  .16874
                  .16001
                  .15186
                  .14426

                  36
                  .18562
                  .17608
                  .16717
                  .15886
                  .15108

                  37
                  .19340
                  .18369
                  .17462
                  .16613
                  .15819

                  38
                  .20144
                  .19157
                  .18233
                  .17368
                  .16557

                  39
                  .20974
                  .19971
                  .19031
                  .18149
                  .17322

                  40
                  .21830
                  .20812
                  .19856
                  .18959
                  .18115

                  41
                  .22714
                  .21681
                  .20710
                  .19797
                  .18938

                  42
                  .23627
                  .22579
                  .21594
                  .20665
                  .19791

                  43
                  .24566
                  .23505
                  .22505
                  .21562
                  .20673

                  44
                  .25532
                  .24458
                  .23445
                  .22488
                  .21585

                  45
                  .26522
                  .25436
                  .24410
                  .23440
                  .22523

                  46
                  .27538
                  .26441
                  .25402
                  .24420
                  .23490

                  47
                  .28579
                  .27471
                  .26421
                  .25427
                  .24484

                  48
                  .29647
                  .28529
                  .27469
                  .26463
                  .25508

                  49
                  .30739
                  .29613
                  .28543
                  .27527
                  .26562

                  50
                  .31859
                  .30724
                  .29646
                  .28620
                  .27645

                  51
                  .33001
                  .31860
                  .30774
                  .29740
                  .28755

                  52
                  .34167
                  .33020
                  .31928
                  .30886
                  .29893

                  53
                  .35355
                  .34204
                  .33105
                  .32057
                  .31056

                  54
                  .36562
                  .35407
                  .34304
                  .33250
                  .32243

                  55
                  .37787
                  .36630
                  .35523
                  .34465
                  .33452

                  56
                  .39029
                  .37870
                  .36761
                  .35699
                  .34682

                  57
                  .40289
                  .39130
                  .38020
                  .36956
                  .35935

                  58
                  .41565
                  .40408
                  .39297
                  .38231
                  .37208

                  59
                  .42859
                  .41704
                  .40595
                  .39529
                  .38504

                  60
                  .44170
                  .43019
                  .41912
                  .40847
                  .39822

                  61
                  .45499
                  .44353
                  .43250
                  .42187
                  .41164

                  62
                  .46845
                  .45706
                  .44607
                  .43548
                  .42527

                  63
                  .48208
                  .47076
                  .45984
                  .44930
                  .43913

                  64
                  .49583
                  .48461
                  .47377
                  .46329
                  .45317

                  65
                  .50971
                  .49859
                  .48784
                  .47744
                  .46738

                  66
                  .52369
                  .51269
                  .50204
                  .49173
                  .48175

                  67
                  .53774
                  .52688
                  .51635
                  .50614
                  .49625

                  68
                  .55187
                  .54115
                  .53075
                  .52066
                  .51088

                  69
                  .56607
                  .55551
                  .54526
                  .53530
                  .52563

                  70
                  .58035
                  .56997
                  .55987
                  .55006
                  .54053

                  71
                  .59474
                  .58455
                  .57463
                  .56498
                  .55559

                  72
                  .60923
                  .59924
                  .58952
                  .58004
                  .57082

                  73
                  .62375
                  .61398
                  .60446
                  .59518
                  .58613

                  74
                  .63818
                  .62864
                  .61933
                  .61026
                  .60140

                  75
                  .65240
                  .64310
                  .63402
                  .62515
                  .61649

                  76
                  .66636
                  .65731
                  .64846
                  .63981
                  .63135

                  77
                  .68005
                  .67124
                  .66263
                  .65420
                  .64596

                  78
                  .69347
                  .68492
                  .67655
                  .66836
                  .66033

                  79
                  .70669
                  .69840
                  .69028
                  .68232
                  .67452

                  80
                  .71973
                  .71171
                  .70384
                  .69613
                  .68856

                  81
                  .73252
                  .72477
                  .71717
                  .70970
                  .70237

                  82
                  .74499
                  .73751
                  .73016
                  .72295
                  .71587

                  83
                  .75713
                  .74992
                  .74284
                  .73589
                  .72905

                  84
                  .76901
                  .76208
                  .75527
                  .74857
                  .74198

                  85
                  .78067
                  .77402
                  .76748
                  .76104
                  .75471

                  86
                  .79185
                  .78548
                  .77921
                  .77304
                  .76695

                  87
                  .80228
                  .79617
                  .79015
                  .78423
                  .77838

                  88
                  .81193
                  .80607
                  .80029
                  .79460
                  .78899

                  89
                  .82102
                  .81540
                  .80985
                  .80438
                  .79899

                  90
                  .82979
                  .82441
                  .81909
                  .81384
                  .80867

                  91
                  .83820
                  .83304
                  .82795
                  .82292
                  .81796

                  92
                  .84598
                  .84104
                  .83616
                  .83134
                  .82657

                  93
                  .85300
                  .84826
                  .84357
                  .83894
                  .83437

                  94
                  .85924
                  .85468
                  .85017
                  .84570
                  .84130

                  95
                  .86466
                  .86025
                  .85589
                  .85158
                  .84732

                  96
                  .86922
                  .86494
                  .86071
                  .85652
                  .85238

                  97
                  .87329
                  .86913
                  .86501
                  .86093
                  .85690

                  98
                  .87685
                  .87279
                  .86877
                  .86479
                  .86085

                  99
                  .88019
                  .87622
                  .87230
                  .86841
                  .86456

                  100
                  .88351
                  .87964
                  .87580
                  .87200
                  .86824

                  101
                  .88646
                  .88267
                  .87891
                  .87519
                  .87150

                  102
                  .88965
                  .88594
                  .88227
                  .87863
                  .87503

                  103
                  .89370
                  .89011
                  .88654
                  .88301
                  .87952

                  104
                  .89763
                  .89414
                  .89068
                  .88725
                  .88385

                  105
                  .90345
                  .90013
                  .89683
                  .89356
                  .89032

                  106
                  .91265
                  .90961
                  .90658
                  .90358
                  .90060

                  107
                  .92522
                  .92258
                  .91995
                  .91734
                  .91474

                  108
                  .94461
                  .94262
                  .94063
                  .93866
                  .93670

                  109
                  .97529
                  .97438
                  .97348
                  .97259
                  .97170

                Table G
                Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Yearly rate of return
                  6.2%
                  6.4%
                  6.6%
                  6.8%
                  7.0%

                  0
                  .04653
                  .04447
                  .04262
                  .04095
                  .03946

                  1
                  .02937
                  .02720
                  .02525
                  .02351
                  .02194

                  2
                  .02994
                  .02769
                  .02567
                  .02385
                  .02221

                  3
                  .03094
                  .02860
                  .02650
                  .02460
                  .02290

                  4
                  .03216
                  .02973
                  .02755
                  .02558
                  .92380

                  5
                  .03359
                  .03106
                  .02879
                  .02674
                  .02488

                  6
                  .03517
                  .03255
                  .03019
                  .02805
                  .02612

                  7
                  .03688
                  .03416
                  .03171
                  .02949
                  .02747

                  8
                  .03874
                  .03592
                  .03337
                  .03106
                  .02896

                  9
                  .04077
                  .03784
                  .03519
                  .03279
                  .03061

                  10
                  .04295
                  .03992
                  .03717
                  .03467
                  .03240

                  11
                  .04531
                  .04217
                  .03931
                  .03672
                  .03436

                  12
                  .04782
                  .04457
                  .04161
                  .03892
                  .02647

                  13
                  .05045
                  .04708
                  .04402
                  .04122
                  .03868

                  14
                  .05312
                  .04964
                  .04646
                  .04357
                  .04093

                  15
                  .05581
                  .05220
                  .04891
                  .04591
                  .04317

                  16
                  .05847
                  .05474
                  .05134
                  .04822
                  .04538

                  17
                  .06111
                  .05726
                  .05374
                  .05051
                  .04756

                  18
                  .06378
                  .05979
                  .05615
                  .05280
                  .04974

                  19
                  .06650
                  .06238
                  .05861
                  .05514
                  .05196

                  20
                  .06933
                  .06507
                  .06117
                  .05758
                  .05429

                  21
                  .07228
                  .06788
                  .06384
                  .06013
                  .05671

                  22
                  .07535
                  .07081
                  .06664
                  .06279
                  .05925

                  23
                  .07858
                  .07389
                  .06958
                  .06559
                  .06192

                  24
                  .08201
                  .07717
                  .07270
                  .06858
                  .06477

                  25
                  .08567
                  .08067
                  .07606
                  .07179
                  .06785

                  26
                  .08960
                  .08444
                  .07968
                  .07527
                  .07118

                  27
                  .09380
                  .08849
                  .08357
                  .07901
                  .07478

                  28
                  .09830
                  .09283
                  .08775
                  .08304
                  .07867

                  29
                  .10306
                  .09742
                  .09218
                  .08732
                  .08280

                  30
                  .10808
                  .10228
                  .09688
                  .09187
                  .08720

                  31
                  .11335
                  .10738
                  .10182
                  .09665
                  .09182

                  32
                  .11889
                  .11275
                  .10704
                  .10170
                  .09672

                  33
                  .12471
                  .11840
                  .11252
                  .10703
                  .10189

                  34
                  .13079
                  .12432
                  .11827
                  .11261
                  .10732

                  35
                  .13716
                  .13052
                  .12431
                  .11849
                  .11305

                  36
                  .14381
                  .13701
                  .13063
                  .12465
                  .11905

                  37
                  .15075
                  .14378
                  .13724
                  .13110
                  .12534

                  38
                  .15796
                  .15083
                  .14412
                  .13782
                  .13190

                  39
                  .16545
                  .15815
                  .15129
                  .14483
                  .13875

                  40
                  .17322
                  .16576
                  .15874
                  .15212
                  .14589

                  41
                  .18129
                  .17367
                  .16649
                  .15971
                  .15332

                  42
                  .18967
                  .18190
                  .17456
                  .16763
                  .16108

                  43
                  .19834
                  .19041
                  .18293
                  .17585
                  .16915

                  44
                  .20731
                  .19924
                  .19160
                  .18437
                  .17753

                  45
                  .21655
                  .20834
                  .20055
                  .19318
                  .18619

                  46
                  .22608
                  .21773
                  .20981
                  .20229
                  .19516

                  47
                  .23590
                  .22741
                  .21935
                  .21170
                  .20443

                  48
                  .24602
                  .23741
                  .22922
                  .22144
                  .21403

                  49
                  .25644
                  .24770
                  .23939
                  .23148
                  .22394

                  50
                  .26716
                  .25831
                  .24989
                  .24185
                  .23419

                  51
                  .27816
                  .26921
                  .26068
                  .25253
                  .24475

                  52
                  .28945
                  .28040
                  .27176
                  .26351
                  .25562

                  53
                  .30100
                  .29187
                  .28313
                  .27478
                  .26679

                  54
                  .31279
                  .30357
                  .29475
                  .28631
                  .27822

                  55
                  .32482
                  .31553
                  .30663
                  .29810
                  .28992

                  56
                  .33707
                  .32771
                  .31875
                  .31014
                  .30188

                  57
                  .34955
                  .34015
                  .33112
                  .32244
                  .31411

                  58
                  .36225
                  .35280
                  .34372
                  .33499
                  .32659

                  59
                  .37519
                  .36571
                  .35659
                  .34781
                  .33936

                  60
                  .38836
                  .37886
                  .36971
                  .36089
                  .35239

                  61
                  .40177
                  .39226
                  .38309
                  .37425
                  .36572

                  62
                  .41542
                  .40591
                  .39674
                  .38788
                  .37932

                  63
                  .42930
                  .41981
                  .41064
                  .40178
                  .39321

                  64
                  .44338
                  .43392
                  .42477
                  .41591
                  .40734

                  65
                  .45765
                  .44823
                  .43910
                  .43027
                  .42171

                  66
                  .47208
                  .46271
                  .45364
                  .44483
                  .43630

                  67
                  .48666
                  .47736
                  .46834
                  .45958
                  .45108

                  68
                  .50138
                  .49215
                  .48320
                  .47450
                  .46605

                  69
                  .51624
                  .50711
                  .49824
                  .48961
                  .48122

                  70
                  .53125
                  .52223
                  .51345
                  .50491
                  .49660

                  71
                  .54645
                  .53755
                  .52889
                  .52045
                  .51223

                  72
                  .56183
                  .55307
                  .54453
                  .53621
                  .52809

                  73
                  .57731
                  .56870
                  .56030
                  .55211
                  .54412

                  74
                  .59275
                  .58431
                  .57606
                  .56801
                  .56015

                  75
                  .60803
                  .59976
                  .59168
                  .58379
                  .57607

                  76
                  .62308
                  .61500
                  .60709
                  .59936
                  .59179

                  77
                  .63789
                  .63000
                  .62227
                  .61470
                  .60730

                  78
                  .65247
                  .64477
                  .63723
                  .62984
                  .62261

                  79
                  .66687
                  .65938
                  .65203
                  .64483
                  .63777

                  80
                  .68114
                  .67386
                  .66672
                  .65971
                  .65284

                  81
                  .69518
                  .68812
                  .68119
                  .67438
                  .66770

                  82
                  .70891
                  .70207
                  .69535
                  .68875
                  .68227

                  83
                  .72232
                  .71572
                  .70922
                  .70283
                  .69655

                  84
                  .73550
                  .72913
                  .72285
                  .71668
                  .71061

                  85
                  .74847
                  .74234
                  .73630
                  .73035
                  .72449

                  86
                  .76096
                  .75506
                  .74925
                  .74353
                  .73789

                  87
                  .77263
                  .76696
                  .76137
                  .75585
                  .75042

                  88
                  .78345
                  .77799
                  .77261
                  .76730
                  .76207

                  89
                  .79367
                  .78842
                  .78323
                  .77812
                  .77308

                  90
                  .80356
                  .79851
                  .79353
                  .78862
                  .78376

                  91
                  .81306
                  .80821
                  .80344
                  .79871
                  .79405

                  92
                  .82187
                  .81722
                  .81263
                  .80810
                  .80361

                  93
                  .82984
                  .82538
                  .82096
                  .81659
                  .81228

                  94
                  .83694
                  .83263
                  .82837
                  .82416
                  .81999

                  95
                  .84310
                  .83893
                  .83481
                  .83073
                  .82670

                  96
                  .84829
                  .84424
                  .84023
                  .83626
                  .83234

                  97
                  .85291
                  .84897
                  .84506
                  .84120
                  .83738

                  98
                  .85696
                  .85310
                  .84929
                  .84551
                  .84177

                  99
                  .86075
                  .85698
                  .85325
                  .84956
                  .84590

                  100
                  .86452
                  .86084
                  .85719
                  .85357
                  .85000

                  101
                  .86785
                  .86424
                  .86066
                  .85711
                  .85360

                  102
                  .87146
                  .86792
                  .86442
                  .86094
                  .85750

                  103
                  .87605
                  .87261
                  .86921
                  .86583
                  .86248

                  104
                  .88047
                  .87713
                  .87382
                  .87053
                  .86727

                  105
                  .88710
                  .88390
                  .88073
                  .87758
                  .87446

                  106
                  .89764
                  .89471
                  .89179
                  .88889
                  .88601

                  107
                  .91216
                  .90960
                  .90705
                  .90451
                  .90199

                  108
                  .93474
                  .93280
                  .93086
                  .92894
                  .92702

                  109
                  .97081
                  .96992
                  .96904
                  .96816
                  .96729

                Table G
                Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Yearly rate of return
                  7.2%
                  7.4%
                  7.6%
                  7.8%
                  8.0%

                  0
                  .03811
                  .03689
                  .03579
                  .03479
                  .03388

                  1
                  .02052
                  .01924
                  .01809
                  .01704
                  .01609

                  2
                  .02074
                  .01940
                  .01819
                  .01710
                  .01611

                  3
                  .02136
                  .01996
                  .01870
                  .01756
                  .01652

                  4
                  .02219
                  .02074
                  .01942
                  .01822
                  .01713

                  5
                  .02321
                  .02169
                  .02031
                  .01905
                  .01791

                  6
                  .02437
                  .02278
                  .02134
                  .02003
                  .01883

                  7
                  .02565
                  .02399
                  .02248
                  .02111
                  .01986

                  8
                  .02706
                  .02533
                  .02376
                  .02232
                  .02101

                  9
                  .02863
                  .02682
                  .02518
                  .02367
                  .02230

                  10
                  .03034
                  .02846
                  .02674
                  .02517
                  .02373

                  11
                  .03221
                  .03025
                  .02846
                  .02682
                  .02532

                  12
                  .03424
                  .03219
                  .03032
                  .02861
                  .02704

                  13
                  .03635
                  .03422
                  .03228
                  .03049
                  .02885

                  14
                  .03851
                  .03630
                  .03427
                  .03240
                  .03069

                  15
                  .04066
                  .03836
                  .03624
                  .03430
                  .03252

                  16
                  .04277
                  .04037
                  .03817
                  .03615
                  .03429

                  17
                  .04485
                  .04236
                  .04007
                  .03796
                  .03602

                  18
                  .04693
                  .04434
                  .04196
                  .03976
                  .03773

                  19
                  .04904
                  .04635
                  .04387
                  .04159
                  .03947

                  20
                  .05125
                  .04845
                  .04588
                  .04349
                  .04129

                  21
                  .05356
                  .05065
                  .04797
                  .04549
                  .04319

                  22
                  .05597
                  .05295
                  .05016
                  .04758
                  .04519

                  23
                  .05853
                  .05539
                  .05248
                  .04979
                  .04730

                  24
                  .06124
                  .05799
                  .05497
                  .05217
                  .04957

                  25
                  .06420
                  .06081
                  .05767
                  .05475
                  .05205

                  26
                  .06739
                  .06388
                  .06062
                  .05758
                  .05476

                  27
                  .07086
                  .06721
                  .06382
                  .06067
                  .05773

                  28
                  .07460
                  .07082
                  .06730
                  .06402
                  .06097

                  29
                  .07859
                  .07467
                  .07102
                  .06762
                  .06444

                  30
                  .08284
                  .07879
                  .07500
                  .07146
                  .06815

                  31
                  .08733
                  .08312
                  .07920
                  .07553
                  .07209

                  32
                  .09207
                  .08773
                  .08366
                  .07986
                  .07629

                  33
                  .09709
                  .09260
                  .08839
                  .08445
                  .08075

                  34
                  .10237
                  .09773
                  .09338
                  .08929
                  .08546

                  35
                  .10794
                  .10315
                  .09865
                  .09442
                  .09045

                  36
                  .11379
                  .10884
                  .10420
                  .09983
                  .09572

                  37
                  .11992
                  .11483
                  .11003
                  .10552
                  .10126

                  38
                  .12633
                  .12108
                  .11614
                  .11148
                  .10708

                  39
                  .13302
                  .12762
                  .12253
                  .11772
                  .11318

                  40
                  .14000
                  .13445
                  .12921
                  .12425
                  .11957

                  41
                  .14728
                  .14158
                  .13619
                  .13109
                  .12626

                  42
                  .15490
                  .14904
                  .14350
                  .13825
                  .13328

                  43
                  .16260
                  .15680
                  .15111
                  .145072
                  .14060

                  44
                  17104
                  .16488
                  .15905
                  .15351
                  .14825

                  45
                  .17955
                  .17326
                  .16727
                  .16159
                  .15619

                  46
                  .18838
                  .18194
                  .17582
                  .16999
                  .16445

                  47
                  .19751
                  .19093
                  .18467
                  .17870
                  .17302

                  48
                  .20698
                  .20026
                  .19386
                  .18776
                  .18194

                  49
                  .21676
                  .20991
                  .20338
                  .19715
                  .19119

                  50
                  .22689
                  .21991
                  .21325
                  .20689
                  .20080

                  51
                  .23732
                  .23023
                  .22344
                  .21695
                  .21074

                  52
                  .24808
                  .24086
                  .23396
                  .22735
                  .22102

                  53
                  .25914
                  .25181
                  .24479
                  .23807
                  .24252

                  54
                  .27047
                  .26304
                  .25591
                  .24908
                  .25372

                  55
                  .28208
                  .27455
                  .26733
                  .26039
                  .25372

                  56
                  .29395
                  .28633
                  .37901
                  .27197
                  .26521

                  57
                  .30610
                  .29840
                  .29099
                  .28386
                  .27700

                  58
                  .31851
                  .31074
                  .30325
                  .29604
                  .28909

                  59
                  .33122
                  .32337
                  .31581
                  .30853
                  .30150

                  60
                  .34420
                  .33630
                  .32867
                  .32132
                  .31422

                  61
                  .35748
                  .34953
                  .34185
                  .33444
                  .32727

                  62
                  .37106
                  .36307
                  .35535
                  .34788
                  .34066

                  63
                  .38492
                  .37691
                  .36915
                  .36165
                  .35438

                  64
                  .39905
                  .39102
                  .38324
                  .37571
                  .36841

                  65
                  .41342
                  .40539
                  .39760
                  .39005
                  .38272

                  66
                  .42803
                  .42000
                  .41221
                  .40465
                  .39731

                  67
                  .44283
                  .43483
                  .42705
                  .41949
                  .41215

                  68
                  .45784
                  .44987
                  .44211
                  .43457
                  .42724

                  69
                  .47307
                  .46513
                  .45741
                  .44990
                  .44254

                  70
                  .48851
                  .48063
                  .47296
                  .46549
                  .45821

                  71
                  .50422
                  .49641
                  .48880
                  .48139
                  .47416

                  72
                  .52018
                  .51246
                  .50493
                  .49758
                  .49042

                  73
                  .53631
                  .52870
                  .52126
                  .51400
                  .50691

                  74
                  .55247
                  .54497
                  .53764
                  .53048
                  .52347

                  75
                  .56852
                  .56115
                  .55393
                  .54687
                  .53997

                  76
                  .58439
                  .57714
                  .57005
                  .56311
                  .55632

                  77
                  .60005
                  .59294
                  .58599
                  .57917
                  .57249

                  78
                  .61551
                  .60856
                  .60174
                  .59506
                  .58851

                  79
                  .63084
                  .62405
                  .61739
                  .61085
                  .60443

                  80
                  .64609
                  .63946
                  .63296
                  .62657
                  .62030

                  81
                  .66114
                  .65469
                  .64835
                  .64213
                  .63602

                  82
                  .67589
                  .66963
                  .66347
                  .65742
                  .65146

                  83
                  .60937
                  .68429
                  .67831
                  .67243
                  .66664

                  84
                  .70463
                  .69875
                  .69296
                  .68726
                  .68165

                  85
                  .71872
                  .71304
                  .70745
                  .70194
                  .69651

                  86
                  .73233
                  .72685
                  .72146
                  .71614
                  .71089

                  87
                  .74507
                  .73978
                  .73458
                  .72944
                  .72438

                  88
                  .75691
                  .75181
                  .74679
                  .74183
                  .73694

                  89
                  .76810
                  .76319
                  .75834
                  .75355
                  .74883

                  90
                  .77897
                  .77424
                  .76957
                  .76496
                  .76040

                  91
                  .78945
                  .78490
                  .78040
                  .77596
                  .77158

                  92
                  .79919
                  .79481
                  .79048
                  .78621
                  .78198

                  93
                  .80801
                  .80380
                  .79963
                  .79550
                  .79143

                  94
                  .81587
                  .81180
                  .80777
                  .80379
                  .79985

                  95
                  .82271
                  .81877
                  .81487
                  .81100
                  .80719

                  96
                  .82846
                  .82462
                  .82083
                  .81707
                  .81335

                  97
                  .83360
                  .82985
                  .82615
                  .82248
                  .81885

                  98
                  .33808
                  .83441
                  .83079
                  .82720
                  .82365

                  99
                  .84228
                  .83869
                  .83514
                  .83163
                  .82815

                  100
                  .84645
                  .84294
                  .83947
                  .83603
                  .83262

                  101
                  .85012
                  .84668
                  .84327
                  .83988
                  .83653

                  102
                  .85409
                  .85072
                  .84737
                  .84405
                  .84077

                  103
                  .85917
                  .85588
                  .85262
                  .84939
                  .84619

                  104
                  .86403
                  .86083
                  .85765
                  .85449
                  .85136

                  105
                  .87136
                  .86829
                  .86524
                  .86221
                  .85921

                  106
                  .88315
                  .88032
                  .87750
                  .87470
                  .87192

                  107
                  .89949
                  .89700
                  .89452
                  .89206
                  .88961

                  108
                  .92511
                  .92321
                  .92132
                  .91944
                  .91757

                  109
                  .96642
                  .96555
                  .96468
                  .96382
                  .96296

                Table G
                Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Yearly rate of return
                  8.2%
                  8.4%
                  8.6%
                  8.8%
                  9.0%

                  0
                  .03305
                  .03230
                  .03161
                  .03098
                  .03040

                  1
                  .01523
                  .01444
                  .01372
                  .01307
                  .01247

                  2
                  .01520
                  .01438
                  .01362
                  .01294
                  .01230

                  3
                  .01557
                  .01470
                  .01391
                  .01319
                  .01253

                  4
                  .01613
                  .01522
                  .01439
                  .01363
                  .01294

                  5
                  .01687
                  .01591
                  .01504
                  .01424
                  .01351

                  6
                  .01774
                  .01674
                  .01582
                  .01498
                  .01421

                  7
                  .01871
                  .01766
                  .01670
                  .01581
                  .01500

                  8
                  .01980
                  .01870
                  .01769
                  .01676
                  .01591

                  9
                  .02104
                  .01989
                  .01883
                  .01785
                  .01695

                  10
                  .02241
                  .02120
                  .02009
                  .01906
                  .01812

                  11
                  .02394
                  .02267
                  .02150
                  .02042
                  .01943

                  12
                  .02560
                  .02427
                  .02305
                  .02192
                  .02088

                  13
                  .02734
                  .02595
                  .02467
                  .02349
                  .02240

                  14
                  .02912
                  .02766
                  .02632
                  .02509
                  .02394

                  15
                  .03087
                  .02935
                  .02795
                  .02666
                  .02546

                  16
                  .03257
                  .03099
                  .02952
                  .02817
                  .02691

                  17
                  .03423
                  .03257
                  .03104
                  .02962
                  .02831

                  18
                  .03586
                  .03414
                  .03253
                  .03105
                  .02967

                  19
                  .03752
                  .03572
                  .03404
                  .03249
                  .03105

                  20
                  .03925
                  .03737
                  .03562
                  .03399
                  .03248

                  21
                  .04107
                  .03910
                  .03727
                  .03557
                  .03398

                  22
                  .04297
                  .04091
                  .03899
                  .03722
                  .03556

                  23
                  .04498
                  .04283
                  .04083
                  .03897
                  .03723

                  24
                  .04715
                  .04491
                  .04282
                  .04087
                  .03905

                  25
                  .04953
                  .04718
                  .04499
                  .04295
                  .04105

                  26
                  .05213
                  .04968
                  .04740
                  .04527
                  .04327

                  27
                  .05499
                  .05243
                  .05005
                  .04782
                  .04573

                  28
                  .05811
                  .05545
                  .05295
                  .05062
                  .04844

                  29
                  .06146
                  .05868
                  .05608
                  .05365
                  .05136

                  30
                  .06506
                  .06217
                  .05945
                  .05691
                  .05452

                  31
                  .06888
                  .06586
                  .06303
                  .06038
                  .05789

                  32
                  .07295
                  .06981
                  .06687
                  .06410
                  .06149

                  33
                  .07728
                  .07401
                  .07095
                  .06806
                  .06535

                  34
                  .08185
                  .07846
                  .07527
                  .07227
                  .06944

                  35
                  .08671
                  .08319
                  .07988
                  .07675
                  .07380

                  36
                  .09184
                  .08819
                  .08475
                  .08150
                  .07843

                  37
                  .09725
                  .09347
                  .08989
                  .08652
                  .08332

                  38
                  .10293
                  .09901
                  .09531
                  .09180
                  .08848

                  39
                  .10889
                  .10483
                  .10099
                  .09736
                  .09391

                  40
                  .11514
                  .11094
                  .10697
                  .10320
                  .09963

                  41
                  .12168
                  .11735
                  .11324
                  .10934
                  .10564

                  42
                  .12856
                  .12409
                  .11984
                  .11581
                  .11197

                  43
                  .13574
                  .13113
                  .12675
                  .12258
                  .11862

                  44
                  .14325
                  .13850
                  .13398
                  .12967
                  .12558

                  45
                  .15105
                  .14616
                  .14150
                  .13706
                  .13283

                  46
                  .15917
                  .15414
                  .14935
                  .14478
                  .14041

                  47
                  .16760
                  .16244
                  .15751
                  .15280
                  .14831

                  48
                  .17639
                  .17109
                  .16602
                  .16119
                  .15656

                  49
                  .18551
                  .18007
                  .17488
                  .16991
                  .16516

                  50
                  .19499
                  .18942
                  .18410
                  .17900
                  .17412

                  51
                  .20480
                  .19911
                  .19366
                  .18844
                  .18343

                  52
                  .21495
                  .20914
                  .20357
                  .19822
                  .19309

                  53
                  .22544
                  .21951
                  .21381
                  .20835
                  .20309

                  54
                  .23622
                  .23018
                  .22437
                  .21878
                  .21341

                  55
                  .24732
                  .24116
                  .23524
                  .22954
                  .22406

                  56
                  .25870
                  .25244
                  .24641
                  .24060
                  .23501

                  57
                  .27040
                  .26404
                  .25791
                  .25200
                  .24630

                  58
                  .28239
                  .27594
                  .26971
                  .26370
                  .25791

                  59
                  .29472
                  .28817
                  .28186
                  .27576
                  .26987

                  60
                  .30736
                  .30074
                  .29434
                  .28816
                  .28218

                  61
                  .32035
                  .31365
                  .30718
                  .30092
                  .29486

                  62
                  .33368
                  .32692
                  .32038
                  .31405
                  .30791

                  63
                  .34735
                  .34054
                  .33394
                  .32754
                  .32134

                  64
                  .36133
                  .35448
                  .34783
                  .34138
                  .33512

                  65
                  .37562
                  .36873
                  .36204
                  .35554
                  .34924

                  66
                  .39019
                  .38327
                  .37655
                  .37002
                  .36367

                  67
                  .40502
                  .39809
                  .39134
                  .38479
                  .37841

                  68
                  .42011
                  .41317
                  .40642
                  .39985
                  .39345

                  69
                  .43547
                  .42854
                  .42179
                  .41522
                  .40882

                  70
                  .45112
                  .44421
                  .43748
                  .43091
                  .42451

                  71
                  .46711
                  .46023
                  .45352
                  .44698
                  .44059

                  72
                  .48342
                  .47659
                  .46992
                  .46341
                  .45705

                  73
                  .49998
                  .49321
                  .48660
                  .48014
                  .47382

                  74
                  .51663
                  .50994
                  .50339
                  .49699
                  .49073

                  75
                  .53322
                  .52661
                  .52014
                  .51381
                  .50762

                  76
                  .54967
                  .54315
                  .53678
                  .53053
                  .52440

                  77
                  .56595
                  .55954
                  .55326
                  .54710
                  .54106

                  78
                  .58209
                  .57579
                  .56961
                  .56355
                  .55761

                  79
                  .59814
                  .59196
                  .58590
                  .57995
                  .57410

                  80
                  .61415
                  .60810
                  .60217
                  .59633
                  .59060

                  81
                  .63001
                  .62410
                  .61830
                  .61260
                  .60699

                  82
                  .64561
                  .63985
                  .63419
                  .62862
                  .62314

                  83
                  .66095
                  .65535
                  .64983
                  .64441
                  .63907

                  84
                  .67612
                  .67068
                  .66533
                  .66005
                  .65486

                  85
                  .69116
                  .68589
                  .68070
                  .67559
                  .67055

                  86
                  .70573
                  .70063
                  .69561
                  .69066
                  .68578

                  87
                  .71939
                  .71446
                  .70961
                  .70481
                  .70009

                  88
                  .73211
                  .72735
                  .72265
                  .71801
                  .71343

                  89
                  .74417
                  .73956
                  .73501
                  .73053
                  .72609

                  90
                  .75590
                  .75146
                  .74707
                  .74273
                  .73845

                  91
                  .76724
                  .76296
                  .75873
                  .75454
                  .75041

                  92
                  .77781
                  .77368
                  .76960
                  .76556
                  .76158

                  93
                  .78740
                  .78342
                  .77948
                  .77558
                  .77173

                  94
                  .79596
                  .79210
                  .78829
                  .78452
                  .78079

                  95
                  .80341
                  .79967
                  .79597
                  .79231
                  .78869

                  96
                  .80967
                  .80603
                  .80242
                  .79885
                  .79532

                  97
                  .81526
                  .81170
                  .80818
                  .80470
                  .80125

                  98
                  .82013
                  .81665
                  .81320
                  .80979
                  .80641

                  99
                  .82470
                  .82129
                  .81791
                  .81456
                  .81125

                  100
                  .82924
                  .82590
                  .82258
                  .81930
                  .81605

                  101
                  .83322
                  .82993
                  .82667
                  .82344
                  .82024

                  102
                  .83751
                  .83428
                  .83108
                  .82791
                  .82477

                  103
                  .84301
                  .83986
                  .83674
                  .83365
                  .83058

                  104
                  .84826
                  .84518
                  .84213
                  .83910
                  .83610

                  105
                  .85623
                  .85327
                  .85033
                  .84741
                  .84452

                  106
                  .86915
                  .86641
                  .86369
                  .86098
                  .85829

                  107
                  .88718
                  .88476
                  .88236
                  .87997
                  .87759

                  108
                  .91571
                  .91385
                  .91201
                  .91017
                  .90834

                  109
                  .96211
                  .96125
                  .96041
                  .95956
                  .95872

                Table G
                Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Yearly rate of return
                  9.2%
                  9.4%
                  9.6%
                  9.8%
                  10.0%

                  0
                  .02987
                  .02938
                  .02893
                  .02851
                  .02812

                  1
                  .01192
                  .01141
                  .01094
                  .01051
                  .01012

                  2
                  .01173
                  .01119
                  .01070
                  .01025
                  .00983

                  3
                  .01192
                  .01136
                  .01084
                  .01036
                  .00992

                  4
                  .01229
                  .01170
                  .01116
                  .01066
                  .01019

                  5
                  .01283
                  .01221
                  .01164
                  .01111
                  .01062

                  6
                  .01350
                  .01284
                  .01224
                  .01168
                  .01116

                  7
                  .01425
                  .01356
                  .01292
                  .01233
                  .01178

                  8
                  .01512
                  .01439
                  .01372
                  .01309
                  .01252

                  9
                  .01612
                  .01535
                  .01464
                  .01398
                  .01337

                  10
                  .01724
                  .01644
                  .01569
                  .01499
                  .01435

                  11
                  .01851
                  .01766
                  .01688
                  .01615
                  .01547

                  12
                  .01991
                  .01902
                  .01819
                  .01742
                  .01671

                  13
                  .02139
                  .02045
                  .01958
                  .01877
                  .01802

                  14
                  .02288
                  .02190
                  .02098
                  .02013
                  .01934

                  15
                  .02435
                  .02331
                  .02235
                  .02146
                  .02063

                  16
                  .02575
                  .02466
                  .02366
                  .02272
                  .02185

                  17
                  .02709
                  .02595
                  .02490
                  .02391
                  .02300

                  18
                  .02839
                  .02721
                  .02610
                  .02507
                  .02410

                  19
                  .02971
                  .02846
                  .02730
                  .02621
                  .02520

                  20
                  .03108
                  .02977
                  .02855
                  .02741
                  .02635

                  21
                  .03251
                  .03114
                  .02986
                  .02866
                  .02755

                  22
                  .03402
                  .03258
                  .03123
                  .02998
                  .02880

                  23
                  .03562
                  .03410
                  .03269
                  .03137
                  .03014

                  24
                  .03735
                  .03577
                  .03428
                  .03290
                  .03159

                  25
                  .03927
                  .03761
                  .03605
                  .03459
                  .03322

                  26
                  .04141
                  .03966
                  .03803
                  .03649
                  .03505

                  27
                  .04377
                  .04194
                  .04023
                  .03861
                  .03710

                  28
                  .04639
                  .04447
                  .04267
                  .04098
                  .03938

                  29
                  .04922
                  .04721
                  .04532
                  .04354
                  .04187

                  30
                  .05228
                  .05017
                  .04819
                  .04633
                  .04457

                  31
                  .05554
                  .05334
                  .05126
                  .04930
                  .04746

                  32
                  .05904
                  .05674
                  .05456
                  .05251
                  .05058

                  33
                  .06279
                  .06038
                  .05810
                  .05595
                  .05392

                  34
                  .06677
                  .06435
                  .06187
                  .05962
                  .05750

                  35
                  .07102
                  .06839
                  .06590
                  .06355
                  .06132

                  36
                  .07553
                  .07278
                  .07019
                  .06773
                  .06540

                  37
                  .08030
                  .07745
                  .07474
                  .07217
                  .06974

                  38
                  .08534
                  .08237
                  .07955
                  .07687
                  .07433

                  39
                  .09065
                  .08755
                  .08462
                  .08182
                  .07917

                  40
                  .09624
                  .09302
                  .08996
                  .08706
                  .08429

                  41
                  .10212
                  .09878
                  .09560
                  .09258
                  .08970

                  42
                  .10833
                  .10486
                  .10156
                  .09842
                  .09543

                  43
                  .11484
                  .11125
                  .10783
                  .10456
                  .10145

                  44
                  .12167
                  .11795
                  .11441
                  .11102
                  .10779

                  45
                  .12880
                  .12495
                  .12128
                  .11777
                  .11442

                  46
                  .13625
                  .13227
                  .12847
                  .12484
                  .12137

                  47
                  .14402
                  .13991
                  .13599
                  .13223
                  .12863

                  48
                  .15214
                  .14791
                  .14385
                  .13997
                  .13626

                  49
                  .16060
                  .15625
                  .15207
                  .14806
                  .14422

                  50
                  .16944
                  .16496
                  .16065
                  .15653
                  .15257

                  51
                  .17862
                  .17401
                  .16959
                  .16534
                  .16126

                  52
                  .18816
                  .18343
                  .17888
                  .17451
                  .17031

                  53
                  .19805
                  .19320
                  .18853
                  .18404
                  .17972

                  54
                  .20825
                  .20328
                  .19850
                  .19390
                  .18946

                  55
                  .21878
                  .21370
                  .20881
                  .20409
                  .19954

                  56
                  .22963
                  .22443
                  .21943
                  .21460
                  .20994

                  57
                  .24081
                  .23551
                  .23040
                  .22546
                  .22069

                  58
                  .25231
                  .24691
                  .24170
                  .23665
                  .23178

                  59
                  .26418
                  .25868
                  .25336
                  .24822
                  .24325

                  60
                  .27640
                  .27081
                  .26540
                  .26016
                  .25509

                  61
                  .28899
                  .28332
                  .27782
                  .27249
                  .26733

                  62
                  .30197
                  .29622
                  .29064
                  .28523
                  .27998

                  63
                  .31533
                  .30950
                  .30385
                  .29836
                  .29304

                  64
                  .32905
                  .32316
                  .31743
                  .31188
                  .30648

                  65
                  .34311
                  .33716
                  .33138
                  .32576
                  .32030

                  66
                  .35751
                  .35151
                  .34568
                  .34001
                  .33449

                  67
                  .37221
                  .36618
                  .36030
                  .35459
                  .34902

                  68
                  .38723
                  .38116
                  .37526
                  .36950
                  .36390

                  69
                  .40257
                  .39649
                  .39056
                  .38478
                  .37914

                  70
                  .41826
                  .41217
                  .40623
                  .40043
                  .39478

                  71
                  .43435
                  .42827
                  .42233
                  .41652
                  .41086

                  72
                  .45084
                  .44478
                  .43885
                  .43305
                  .42739

                  73
                  .46765
                  .46161
                  .45571
                  .44994
                  .44429

                  74
                  .48460
                  .47861
                  .47274
                  .46700
                  .46138

                  75
                  .50155
                  .49561
                  .48979
                  .48409
                  .47851

                  76
                  .51841
                  .51253
                  .50677
                  .50112
                  .49559

                  77
                  .53514
                  .52934
                  .52364
                  .51806
                  .51258

                  78
                  .55177
                  .54605
                  .54043
                  .53492
                  .52951

                  79
                  .56837
                  .56273
                  .55720
                  .55177
                  .54643

                  80
                  .58497
                  .57944
                  .57401
                  .56866
                  .56341

                  81
                  .60148
                  .59606
                  .59073
                  .58548
                  .58033

                  82
                  .61775
                  .61245
                  .60723
                  .60210
                  .59705

                  83
                  .63381
                  .62863
                  .62354
                  .61852
                  .61358

                  84
                  .64974
                  .64470
                  .63973
                  .63484
                  .63002

                  85
                  .66558
                  .66068
                  .65586
                  .65110
                  .64641

                  86
                  .68096
                  .67622
                  .67154
                  .66692
                  .66236

                  87
                  .69542
                  .69082
                  .68628
                  .68180
                  .67738

                  88
                  .70891
                  .70445
                  .70005
                  .69570
                  .69141

                  89
                  .72172
                  .71739
                  .71312
                  .70891
                  .70474

                  90
                  .73422
                  .73004
                  .72591
                  .72182
                  .71779

                  91
                  .74632
                  .74229
                  .73829
                  .73435
                  .73045

                  92
                  .75763
                  .75373
                  .74988
                  .74606
                  .74229

                  93
                  .76791
                  .76414
                  .76042
                  .75673
                  .75308

                  94
                  .77710
                  .77345
                  .76983
                  .76626
                  .76272

                  95
                  .78510
                  .78155
                  .77804
                  .77457
                  .77113

                  96
                  .79183
                  .78837
                  .78494
                  .78155
                  .77819

                  97
                  .79783
                  .79445
                  .79110
                  .78779
                  .78450

                  98
                  .80306
                  .79975
                  .79647
                  .79322
                  .79000

                  99
                  .80797
                  .80471
                  .80149
                  .79830
                  .79514

                  100
                  .81283
                  .80964
                  .80648
                  .80335
                  .80025

                  101
                  .81708
                  .81394
                  .81082
                  .80774
                  .80468

                  102
                  .82165
                  .81856
                  .81550
                  .81247
                  .80946

                  103
                  .82754
                  .82452
                  .82153
                  .81857
                  .81563

                  104
                  .83312
                  .83017
                  .82723
                  .82433
                  .82144

                  105
                  .84165
                  .83880
                  .83597
                  .83316
                  .83038

                  106
                  .85562
                  .85297
                  .85034
                  .84772
                  .84512

                  107
                  .87523
                  .87288
                  .87054
                  .86822
                  .86591

                  108
                  .90652
                  .90471
                  .90291
                  .90111
                  .89932

                  109
                  .95788
                  .95704
                  .95620
                  .95537
                  .95455

                Table G
                Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Yearly rate of return
                  10.2%
                  10.4%
                  10.6%
                  10.8%
                  11.0%

                  0
                  .02776
                  .02743
                  .02712
                  .02682
                  .02655

                  1
                  .00975
                  .00941
                  .00909
                  .00880
                  .00852

                  2
                  .00945
                  .00909
                  .00875
                  .00844
                  .00816

                  3
                  .00952
                  .00914
                  .00879
                  .00846
                  .00815

                  4
                  .00976
                  .00936
                  .00899
                  .00865
                  .00832

                  5
                  .01016
                  .00974
                  .00935
                  .00898
                  .00864

                  6
                  .01068
                  .01023
                  .00981
                  .00943
                  .00907

                  7
                  .01128
                  .01080
                  .01036
                  .00995
                  .00957

                  8
                  .01198
                  .01148
                  .01101
                  .01058
                  .01017

                  9
                  .01281
                  .01228
                  .01179
                  .01133
                  .01090

                  10
                  .01375
                  .01319
                  .01267
                  .01219
                  .01173

                  11
                  .01483
                  .01425
                  .01370
                  .01318
                  .01270

                  12
                  .01604
                  .01542
                  .01484
                  .01430
                  .01379

                  13
                  .01732
                  .01666
                  .01605
                  .01548
                  .01494

                  14
                  .01860
                  .01792
                  .01727
                  .01667
                  .01610

                  15
                  .01986
                  .01913
                  .01845
                  .01782
                  .01723

                  16
                  .02103
                  .02027
                  .01956
                  .01889
                  .01827

                  17
                  .02214
                  .02134
                  .02059
                  .01989
                  .01923

                  18
                  .02320
                  .02236
                  .02157
                  .02084
                  .02014

                  19
                  .02426
                  .02337
                  .02254
                  .02177
                  .02104

                  20
                  .02536
                  .02442
                  .02355
                  .02273
                  .02197

                  21
                  .02650
                  .02552
                  .02460
                  .02374
                  .02293

                  22
                  .02770
                  .02667
                  .02570
                  .02479
                  .02394

                  23
                  .02898
                  .02789
                  .02687
                  .02591
                  .02501

                  24
                  .03037
                  .02923
                  .02815
                  .02714
                  .02619

                  25
                  .03194
                  .03073
                  .02960
                  .02853
                  .02752

                  26
                  .03370
                  .03243
                  .03123
                  .03010
                  .02904

                  27
                  .03568
                  .03434
                  .03307
                  .03188
                  .03076

                  28
                  .03789
                  .03647
                  .03514
                  .03389
                  .03271

                  29
                  .04029
                  .03880
                  .03740
                  .03608
                  .03483

                  30
                  .04291
                  .04135
                  .03987
                  .03848
                  .03716

                  31
                  .04572
                  .04407
                  .04252
                  .04105
                  .03966

                  32
                  .04875
                  .04702
                  .04538
                  .04384
                  .04237

                  33
                  .05200
                  .05019
                  .04847
                  .04684
                  .04530

                  34
                  .05548
                  .05358
                  .05177
                  .05006
                  .04843

                  35
                  .05921
                  .05722
                  .05532
                  .05352
                  .05181

                  36
                  .06319
                  .06110
                  .05911
                  .05722
                  .05543

                  37
                  .06743
                  .06524
                  .06315
                  .06117
                  .05929

                  38
                  .07191
                  .06962
                  .06744
                  .06536
                  .06338

                  39
                  .07665
                  .074425
                  .07197
                  .06980
                  .06773

                  40
                  .08166
                  .07916
                  .07677
                  .07450
                  .07233

                  41
                  .08696
                  .08434
                  .08185
                  .07947
                  .07721

                  42
                  .09257
                  .08985
                  .08725
                  .08477
                  .08239

                  43
                  .09848
                  .09564
                  .09293
                  .09034
                  .08787

                  44
                  .10470
                  .10175
                  .09893
                  .09623
                  .09365

                  45
                  .11121
                  .10815
                  .10522
                  .10241
                  .09972

                  46
                  .11805
                  .11486
                  .11182
                  .10890
                  .10610

                  47
                  .12519
                  .12189
                  .11873
                  .11569
                  .11279

                  48
                  .13269
                  .12927
                  .12600
                  .12285
                  .11983

                  49
                  .14054
                  .13600
                  .13361
                  .13035
                  .12721

                  50
                  .14876
                  .14511
                  .14160
                  .13822
                  .13497

                  51
                  .15734
                  .15356
                  .14994
                  .14645
                  .14309

                  52
                  .16627
                  .16238
                  .15864
                  .15504
                  .15156

                  53
                  .17557
                  .17156
                  .16770
                  .16399
                  .16040

                  54
                  .18519
                  .18107
                  .17710
                  .17327
                  .16957

                  55
                  .19515
                  .19092
                  .18684
                  .18290
                  .17909

                  56
                  .20544
                  .20110
                  .19691
                  .19286
                  .18894

                  57
                  .21609
                  .21164
                  .20734
                  .20318
                  .19916

                  58
                  .22707
                  .22252
                  .21811
                  .21385
                  .20972

                  59
                  .23844
                  .23378
                  .22928
                  .22491
                  .22068

                  60
                  .25018
                  .24543
                  .24082
                  .23636
                  .23203

                  61
                  .26233
                  .25749
                  .25279
                  .24823
                  .24381

                  62
                  .27490
                  .26996
                  .26517
                  .26052
                  .25601

                  63
                  .28787
                  .28286
                  .27798
                  .27325
                  .26865

                  64
                  .30124
                  .29615
                  .29120
                  .28639
                  .28171

                  65
                  .31500
                  .30983
                  .30481
                  .29993
                  .29517

                  66
                  .32912
                  .32390
                  .31881
                  .31386
                  .30904

                  67
                  .34360
                  .33832
                  .33318
                  .32817
                  .32328

                  68
                  .35843
                  .35311
                  .34791
                  .34285
                  .33791

                  69
                  .37365
                  .36828
                  .36305
                  .35794
                  .35296

                  70
                  .38925
                  .38386
                  .37860
                  .37346
                  .36844

                  71
                  .40532
                  .39991
                  .39463
                  .38946
                  .38442

                  72
                  .42185
                  .41644
                  .41115
                  .40597
                  .40091

                  73
                  .43876
                  .43336
                  .42807
                  .42289
                  .41782

                  74
                  .45588
                  .45050
                  .44522
                  .44005
                  .43499

                  75
                  .47304
                  .46769
                  .46244
                  .45729
                  .45225

                  76
                  .49016
                  .48485
                  .47963
                  .47451
                  .46949

                  77
                  .50721
                  .50193
                  .49676
                  .49168
                  .48670

                  78
                  .52419
                  .51898
                  .51385
                  .50882
                  .50388

                  79
                  .54119
                  .53604
                  .53097
                  .52600
                  .52111

                  80
                  .55825
                  .55318
                  .54819
                  .54328
                  .53846

                  81
                  .57526
                  .57027
                  .56536
                  .56053
                  .55578

                  82
                  .59208
                  .58718
                  .58236
                  .57762
                  .57295

                  83
                  .60871
                  .60392
                  .59920
                  .59455
                  .58997

                  84
                  .62527
                  .62059
                  .61597
                  .61143
                  .60695

                  85
                  .64179
                  .63723
                  .63273
                  .62830
                  .62393

                  86
                  .65787
                  .65344
                  .64907
                  .64475
                  .64050

                  87
                  .67302
                  .66871
                  .66446
                  .66026
                  .65612

                  88
                  .68717
                  .68298
                  .67885
                  .67477
                  .67074

                  89
                  .70063
                  .69656
                  .69255
                  .68858
                  .68466

                  90
                  .71380
                  .70986
                  .70597
                  .70212
                  .69831

                  91
                  .72659
                  .72278
                  .71901
                  .71528
                  .71160

                  92
                  .73856
                  .73488
                  .73123
                  .72762
                  .72405

                  93
                  .74947
                  .74590
                  .74236
                  .73887
                  .73541

                  94
                  .75922
                  .75575
                  .75233
                  .74893
                  .74557

                  95
                  .76773
                  .76436
                  .76102
                  .75772
                  .75445

                  96
                  .77487
                  .77158
                  .76832
                  .76510
                  .76190

                  97
                  .78125
                  .77803
                  .77485
                  .77169
                  .76856

                  98
                  .78681
                  .78365
                  .78052
                  .77742
                  .77435

                  99
                  .79201
                  .78891
                  .78583
                  .78279
                  .77977

                  100
                  .79717
                  .79412
                  .79111
                  .78811
                  .78515

                  101
                  .80165
                  .79865
                  .79568
                  .79273
                  .78981

                  102
                  .80648
                  .80353
                  .80060
                  .79769
                  .79481

                  103
                  .81271
                  .80982
                  .80695
                  .80411
                  .80129

                  104
                  .81858
                  .81574
                  .81292
                  .81013
                  .80736

                  105
                  .83761
                  .82487
                  .82214
                  .81943
                  .81675

                  106
                  .84254
                  .83998
                  .83743
                  .83490
                  .83238

                  107
                  .86362
                  .86133
                  .85906
                  .85681
                  .85456

                  108
                  .89755
                  .89577
                  .89401
                  .89226
                  .89051

                  109
                  .95372
                  .95290
                  .95208
                  .95126
                  .95045

                Table G
                Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Yearly rate of return
                  11.2%
                  11.4%
                  11.6%
                  11.8%
                  12.0%

                  0
                  .02630
                  .02606
                  .02583
                  .02562
                  .02542

                  1
                  .00827
                  .00803
                  .00780
                  .00759
                  .00739

                  2
                  .00789
                  .00763
                  .00740
                  .00718
                  .00697

                  3
                  .00787
                  .00760
                  .00736
                  .00712
                  .00690

                  4
                  .00802
                  .00774
                  .00748
                  .00723
                  .00700

                  5
                  .00832
                  .00802
                  .00774
                  .00748
                  .00724

                  6
                  .00873
                  .00841
                  .00812
                  .00784
                  .00758

                  7
                  .00921
                  .00888
                  .00856
                  .00827
                  .00799

                  8
                  .00979
                  .00944
                  .00910
                  .00879
                  .00850

                  9
                  .01049
                  .01012
                  .00976
                  .00943
                  .00912

                  10
                  .01131
                  .01091
                  .01053
                  .01018
                  .00985

                  11
                  .01225
                  .01183
                  .01143
                  .01106
                  .01070

                  12
                  .01331
                  .01286
                  .01244
                  .01205
                  .01168

                  13
                  .01444
                  .01397
                  .01352
                  .01311
                  .01271

                  14
                  .01558
                  .01508
                  .01461
                  .01417
                  .01375

                  15
                  .01667
                  .01614
                  .01565
                  .01519
                  .01475

                  16
                  .01768
                  .01713
                  .01661
                  .01612
                  .01566

                  17
                  .01862
                  .01803
                  .01749
                  .01697
                  .01649

                  18
                  .01949
                  .01888
                  .01831
                  .01776
                  .01725

                  19
                  .02035
                  .01971
                  .01910
                  .01853
                  .01799

                  20
                  .02124
                  .02056
                  .01992
                  .01932
                  .01875

                  21
                  .02217
                  .02145
                  .02078
                  .02014
                  .01954

                  22
                  .02313
                  .02238
                  .02166
                  .02099
                  .02035

                  23
                  .02416
                  .02336
                  .02261
                  .02190
                  .02122

                  24
                  .02529
                  .02445
                  .02365
                  .02290
                  .02218

                  25
                  .02657
                  .02568
                  .02484
                  .02404
                  .02328

                  26
                  .02804
                  .02710
                  .02620
                  .02536
                  .02456

                  27
                  .02970
                  .02870
                  .02776
                  .02686
                  .02601

                  28
                  .03159
                  .03053
                  .02953
                  .02858
                  .02768

                  29
                  .03365
                  .03253
                  .03147
                  .03047
                  .02951

                  30
                  .03591
                  .03473
                  .03361
                  .03255
                  .03154

                  31
                  .03834
                  .03709
                  .03591
                  .03478
                  .03372

                  32
                  .04098
                  .03966
                  .03841
                  .03722
                  .03610

                  33
                  .04383
                  .04244
                  .04112
                  .03987
                  .03867

                  34
                  .04689
                  .04543
                  .04403
                  .04271
                  .04145

                  35
                  .05019
                  .04865
                  .04718
                  .04578
                  .04445

                  36
                  .05372
                  .05210
                  .05055
                  .04907
                  .04767

                  37
                  .05749
                  .05578
                  .05416
                  .05260
                  .05112

                  38
                  .06150
                  .05970
                  .05799
                  .05636
                  .05480

                  39
                  .06575
                  .06387
                  .06207
                  .06035
                  .05871

                  40
                  .07026
                  .06828
                  .06639
                  .06459
                  .06286

                  41
                  .07504
                  .07297
                  .07099
                  .06909
                  .06728

                  42
                  .08013
                  .07796
                  .07589
                  .07390
                  .07200

                  43
                  .08550
                  .08323
                  .08106
                  .07898
                  .07699

                  44
                  .09118
                  .08881
                  .08654
                  .08437
                  .08228

                  45
                  .09714
                  .09467
                  .09230
                  .09003
                  .08784

                  46
                  .10341
                  .10084
                  .09837
                  .09599
                  .09371

                  47
                  .10999
                  .10731
                  .10473
                  .10226
                  .09988

                  48
                  .11693
                  .11414
                  .11145
                  .10888
                  .10639

                  49
                  .12420
                  .12130
                  .11852
                  .11583
                  .11325

                  50
                  .13185
                  .12884
                  .12595
                  .12316
                  .12047

                  51
                  .13985
                  .13674
                  .13373
                  .13084
                  .12805

                  52
                  .14822
                  .14499
                  .14188
                  .13888
                  .13598

                  53
                  .15695
                  .15361
                  .15039
                  .14729
                  .14428

                  54
                  .16601
                  .16256
                  .15924
                  .15602
                  .15292

                  55
                  .17542
                  .17186
                  .16843
                  .16511
                  .16190

                  56
                  .18516
                  .18150
                  .17796
                  .17454
                  .17122

                  57
                  .19527
                  .19150
                  .18786
                  .18433
                  .18091

                  58
                  .20573
                  .20186
                  .19811
                  .19448
                  .19096

                  59
                  .21659
                  .21262
                  .20877
                  .20504
                  .20142

                  60
                  .22784
                  .22377
                  .21982
                  .21599
                  .21227

                  61
                  .23952
                  .23535
                  .23131
                  .22738
                  .22357

                  62
                  .25163
                  .24737
                  .24324
                  .23922
                  .23531

                  63
                  .26418
                  .25984
                  .25561
                  .25151
                  .24751

                  64
                  .27716
                  .27273
                  .26842
                  .26423
                  .26015

                  65
                  .29054
                  .28604
                  .28165
                  .27738
                  .27322

                  66
                  .30434
                  .29976
                  .29530
                  .29096
                  .28672

                  67
                  .31852
                  .31388
                  .30935
                  .30494
                  .30063

                  68
                  .33310
                  .32840
                  .32381
                  .31933
                  .31496

                  69
                  .34809
                  .34334
                  .33870
                  .33417
                  .32975

                  70
                  .36353
                  .35874
                  .35405
                  .34948
                  .34500

                  71
                  .37948
                  .37466
                  .36994
                  .36532
                  .36081

                  72
                  .39595
                  .39111
                  .38636
                  .38172
                  .37718

                  73
                  .41286
                  .40801
                  .40325
                  .39859
                  .39403

                  74
                  .43004
                  .42518
                  .42042
                  .41575
                  .41118

                  75
                  .44730
                  .44245
                  .43770
                  .43304
                  .42846

                  76
                  .46457
                  .45974
                  .45500
                  .45035
                  .44579

                  77
                  .48181
                  .47700
                  .47229
                  .46766
                  .46311

                  78
                  .49903
                  .49426
                  .48958
                  .48497
                  .48045

                  79
                  .51631
                  .51159
                  .50694
                  .50238
                  .49789

                  80
                  .53371
                  .52905
                  .52446
                  .51994
                  .51550

                  81
                  .55110
                  .54650
                  .54197
                  .53752
                  .53313

                  82
                  .56835
                  .56382
                  .55937
                  .55497
                  .55065

                  83
                  .58546
                  .58101
                  .57663
                  .57231
                  .56806

                  84
                  .60253
                  .59817
                  .59388
                  .58965
                  .58547

                  85
                  .61961
                  .61536
                  .61116
                  .60703
                  .60294

                  86
                  .63630
                  .63215
                  .62806
                  .62402
                  .62004

                  87
                  .65203
                  .64800
                  .64401
                  .64007
                  .63619

                  88
                  .66676
                  .66282
                  .65894
                  .65510
                  .65131

                  89
                  .68079
                  .67696
                  .67318
                  .66944
                  .66574

                  90
                  .69455
                  .69084
                  .68716
                  .68353
                  .67993

                  91
                  .70795
                  .70435
                  .70078
                  .69726
                  .69377

                  92
                  .72052
                  .71703
                  .71357
                  .71015
                  .70677

                  93
                  .73198
                  .72860
                  .72524
                  .72192
                  .71864

                  94
                  .74225
                  .73896
                  .73570
                  .73248
                  .72928

                  95
                  .75121
                  .74801
                  .74483
                  .74169
                  .73858

                  96
                  .75874
                  .75561
                  .75250
                  .74943
                  .74639

                  97
                  .76546
                  .76240
                  .75936
                  .75635
                  .75336

                  98
                  .77131
                  .76830
                  .76531
                  .76235
                  .75942

                  99
                  .77678
                  .77382
                  .77088
                  .76798
                  .76509

                  100
                  .78221
                  .77930
                  .77642
                  .77356
                  .77072

                  101
                  .78691
                  .78404
                  .78119
                  .77837
                  .77557

                  102
                  .79196
                  .78912
                  .78632
                  .78353
                  .78077

                  103
                  .79849
                  .79572
                  .79297
                  .79024
                  .78753

                  104
                  .80460
                  .80188
                  .79917
                  .79648
                  .79381

                  105
                  .81408
                  .81143
                  .80881
                  .80620
                  .80361

                  106
                  .82989
                  .82740
                  .82494
                  .82249
                  .82006

                  107
                  .85233
                  .85012
                  .84791
                  .84572
                  .84353

                  108
                  .88877
                  .88704
                  .88532
                  .88361
                  .88190

                  109
                  .94964
                  .94883
                  .94803
                  .94723
                  .94643

                Table G
                Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Yearly rate of return
                  12.2%
                  12.4%
                  12.6%
                  12.8%
                  13.0%

                  0
                  .02523
                  .02505
                  .02488
                  .02472
                  .02456

                  1
                  .00721
                  .00703
                  .00687
                  .00671
                  .00657

                  2
                  .00678
                  .00659
                  .00642
                  .00626
                  .00610

                  3
                  .00670
                  .00650
                  .00632
                  .00615
                  .00599

                  4
                  .00678
                  .00658
                  .00638
                  .00620
                  .00603

                  5
                  .00701
                  .00679
                  .00658
                  .00639
                  .00620

                  6
                  .00733
                  .00710
                  .00688
                  .00668
                  .00648

                  7
                  .00733
                  .00748
                  .00725
                  .00703
                  .00682

                  8
                  .00822
                  .00796
                  .00771
                  .00748
                  .00726

                  9
                  .00882
                  .00854
                  .00828
                  .00803
                  .00780

                  10
                  .00953
                  .00924
                  .00896
                  .00869
                  .00844

                  11
                  .01037
                  .01006
                  .00976
                  .00948
                  .00922

                  12
                  .01132
                  .01099
                  .01068
                  .01038
                  .01010

                  13
                  .01234
                  .01199
                  .01166
                  .01134
                  .01104

                  14
                  .01336
                  .01299
                  .01264
                  .01231
                  .01199

                  15
                  .01434
                  .01395
                  .01358
                  .01323
                  .01289

                  16
                  .01522
                  .01481
                  .01442
                  .01405
                  .01371

                  17
                  .01603
                  .01559
                  .01518
                  .01480
                  .01443

                  18
                  .01677
                  .01631
                  .01588
                  .01547
                  .01508

                  19
                  .01748
                  .01700
                  .01654
                  .01611
                  .01570

                  20
                  .01821
                  .01770
                  .01722
                  .01677
                  .01633

                  21
                  .01897
                  .01843
                  .01792
                  .01744
                  .01698

                  22
                  .01975
                  .01918
                  .01864
                  .01813
                  .01765

                  23
                  .02059
                  .01998
                  .01941
                  .01887
                  .01836

                  24
                  .02151
                  .02087
                  .02027
                  .01970
                  .01915

                  25
                  .02257
                  .02189
                  .02125
                  .02064
                  .02006

                  26
                  .02380
                  .02308
                  .02240
                  .02175
                  .02114

                  27
                  .02521
                  .02445
                  .02373
                  .02304
                  .02239

                  28
                  .02683
                  .02602
                  .02525
                  .02452
                  .02383

                  29
                  .02861
                  .02775
                  .02694
                  .02616
                  .02543

                  30
                  .03058
                  .02967
                  .02881
                  .02798
                  .02720

                  31
                  .03270
                  .03174
                  .03082
                  .02995
                  .02911

                  32
                  .03502
                  .03400
                  .03303
                  .03210
                  .03122

                  33
                  .03754
                  .03646
                  .03543
                  .03444
                  .03350

                  34
                  .04025
                  .03910
                  .03801
                  .03697
                  .03597

                  35
                  .04318
                  .04197
                  .04081
                  .03971
                  .03865

                  36
                  .04633
                  .04505
                  .04383
                  .04266
                  .04154

                  37
                  .04971
                  .04836
                  .04707
                  .04583
                  .04465

                  38
                  .05331
                  .05188
                  .05052
                  .04922
                  .04797

                  39
                  .05714
                  .05564
                  .05420
                  .05282
                  .05150

                  40
                  .06121
                  .05963
                  .05812
                  .05667
                  .05528

                  41
                  .06554
                  .06388
                  .06229
                  .06076
                  .05929

                  42
                  .07018
                  .06843
                  .06675
                  .06514
                  .06360

                  43
                  .07508
                  .07324
                  .07148
                  .06979
                  .06817

                  44
                  .08028
                  .07325
                  .07651
                  .07473
                  .07303

                  45
                  .08575
                  .08373
                  .08180
                  .07993
                  .07814

                  46
                  .09152
                  .08941
                  .08738
                  .08543
                  .08355

                  47
                  .09759
                  .09539
                  .09326
                  .09122
                  .08926

                  48
                  .10401
                  .10171
                  .09949
                  .09735
                  .09530

                  49
                  .11076
                  .10836
                  .10605
                  .10382
                  .10167

                  50
                  .11788
                  .11538
                  .11297
                  .11065
                  .10840

                  51
                  .12535
                  .12276
                  .12025
                  .11782
                  .11548

                  52
                  .13319
                  .13049
                  .12788
                  .12536
                  .12292

                  53
                  .14139
                  .13858
                  .13588
                  .13326
                  .13072

                  54
                  .14992
                  .14701
                  .14420
                  .14149
                  .13885

                  55
                  .15880
                  .15579
                  .15288
                  .15006
                  .14733

                  56
                  .16801
                  .16491
                  .16190
                  .15898
                  .15615

                  57
                  .17760
                  .17439
                  .17128
                  .16827
                  .16534

                  58
                  .18755
                  .18424
                  .18103
                  .17792
                  .17489

                  59
                  .19790
                  .19450
                  .19119
                  .18798
                  .18486

                  60
                  .20866
                  .20516
                  .20175
                  .19844
                  .19523

                  61
                  .21986
                  .21626
                  .21276
                  .20936
                  .20605

                  62
                  .23151
                  .22782
                  .22423
                  .22073
                  .21733

                  63
                  .24362
                  .23984
                  .23616
                  .23257
                  .22908

                  64
                  .25617
                  .25231
                  .24854
                  .24487
                  .24129

                  65
                  .26917
                  .26522
                  .26137
                  .25761
                  .25395

                  66
                  .28259
                  .27857
                  .27464
                  .27081
                  .26707

                  67
                  .29643
                  .29233
                  .28833
                  .28443
                  .38061

                  68
                  .31070
                  .30653
                  .30246
                  .29849
                  .29461

                  69
                  .32542
                  .32120
                  .31707
                  .31303
                  .30908

                  70
                  .34063
                  .33635
                  .33217
                  .32807
                  .32407

                  71
                  .35639
                  .35207
                  .34784
                  .34370
                  .33965

                  72
                  .37273
                  .36837
                  .36410
                  .35993
                  .35583

                  73
                  .38955
                  .38517
                  .38088
                  .37667
                  .37255

                  74
                  .40670
                  .40230
                  .39799
                  .39377
                  .38962

                  75
                  .42398
                  .41958
                  .41526
                  .41102
                  .40686

                  76
                  .44131
                  .43691
                  .43259
                  .42825
                  .42419

                  77
                  .45864
                  .45425
                  .44994
                  .44571
                  .44155

                  78
                  .47601
                  .47164
                  .46734
                  .46312
                  .45897

                  79
                  .49348
                  .48914
                  .48487
                  .48067
                  .47654

                  80
                  .51112
                  .50682
                  .50259
                  .49842
                  .49432

                  81
                  .52881
                  .52455
                  .52036
                  .51624
                  .51218

                  82
                  .54639
                  .54219
                  .53805
                  .53398
                  .52996

                  83
                  .56386
                  .55973
                  .55566
                  .55164
                  .54768

                  84
                  .58136
                  .57730
                  .57329
                  .56934
                  .56545

                  85
                  .59891
                  .59494
                  .59102
                  .58715
                  .58333

                  86
                  .61610
                  .61222
                  .60839
                  .60460
                  .60086

                  87
                  .62335
                  .62856
                  .62481
                  .62111
                  .61746

                  88
                  .64757
                  .64386
                  .64021
                  .63659
                  .63302

                  89
                  .66209
                  .65848
                  .65491
                  .65139
                  .64790

                  90
                  .67638
                  .67287
                  .66939
                  .66596
                  .66256

                  91
                  .69032
                  .68691
                  .68353
                  .68019
                  .67689

                  92
                  .70342
                  .70011
                  .69683
                  .69359
                  .69038

                  93
                  .71539
                  .71217
                  .70899
                  .70584
                  .70271

                  94
                  .72612
                  .72299
                  .71989
                  .71683
                  .71379

                  95
                  .73550
                  .43245
                  .72943
                  .72643
                  .72347

                  96
                  .74337
                  .74039
                  .73743
                  .73450
                  .73160

                  97
                  .75041
                  .74748
                  .74458
                  .74171
                  .73886

                  98
                  .74652
                  .75364
                  .75079
                  .74797
                  .74517

                  99
                  .76224
                  .75941
                  .75660
                  .75382
                  .75106

                  100
                  .76791
                  .76513
                  .76237
                  .75963
                  .75692

                  101
                  .77280
                  .77005
                  .76732
                  .67462
                  .76194

                  102
                  .77804
                  .77532
                  .77263
                  .76996
                  .76732

                  103
                  .78485
                  .78218
                  .77954
                  .77692
                  .77432

                  104
                  .79117
                  .78854
                  .78594
                  .78335
                  .78078

                  105
                  .80103
                  .79848
                  .78595
                  .79343
                  .79093

                  106
                  .81764
                  .81524
                  .81285
                  .81048
                  .80813

                  107
                  .84137
                  .93921
                  .83706
                  .83493
                  .83281

                  108
                  .88020
                  .87851
                  .87682
                  .87515
                  .87348

                  109
                  .94563
                  .94484
                  .94405
                  .94326
                  .94248

                Table G
                Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Yearly rate of return
                  13.2%
                  13.4%
                  13.6%
                  13.8%
                  14.0%

                  0
                  .02442
                  .02428
                  .02414
                  .02402
                  .02389

                  1
                  .00643
                  .00629
                  .00617
                  .00605
                  .00594

                  2
                  .00596
                  .00582
                  .00569
                  .00556
                  .00544

                  3
                  .00583
                  .00569
                  .00555
                  .00542
                  .00529

                  4
                  .00586
                  .00571
                  .00556
                  .00542
                  .00529

                  5
                  .00603
                  .00587
                  .00571
                  .00556
                  .00542

                  6
                  .00630
                  .00612
                  .00595
                  .00580
                  .00565

                  7
                  .00663
                  .00644
                  .00626
                  .00610
                  .00594

                  8
                  .00705
                  .00685
                  .00666
                  .00648
                  .00631

                  9
                  .00757
                  .00736
                  .00716
                  .00697
                  .00679

                  10
                  .00821
                  .00798
                  .00777
                  .00756
                  .00737

                  11
                  .00896
                  .00872
                  .00850
                  .00828
                  .00807

                  12
                  .00983
                  .00958
                  .00934
                  .00911
                  .00889

                  13
                  .01076
                  .01049
                  .01024
                  .00999
                  .00976

                  14
                  .01170
                  .01141
                  .01114
                  .01088
                  .01064

                  15
                  .01258
                  .01228
                  .01200
                  .01172
                  .01147

                  16
                  .01337
                  .01306
                  .01276
                  .01247
                  .01220

                  17
                  .01408
                  .01375
                  .01343
                  .01313
                  .01284

                  18
                  .01471
                  .01436
                  .01403
                  .01371
                  .01341

                  19
                  .01531
                  .01494
                  .01459
                  .01426
                  .01394

                  20
                  .01592
                  .01553
                  .01516
                  .01481
                  .01447

                  21
                  .01655
                  .01614
                  .01574
                  .01537
                  .01502

                  22
                  .01719
                  .01675
                  .01634
                  .01594
                  .01557

                  23
                  .01787
                  .01741
                  .01697
                  .01655
                  .01615

                  24
                  .01863
                  .01814
                  .01768
                  .01723
                  .01681

                  25
                  .01952
                  .01899
                  .01850
                  .01802
                  .01757

                  26
                  .02056
                  .02000
                  .01947
                  .01897
                  .01849

                  27
                  .02177
                  .02118
                  .02061
                  .02008
                  .01956

                  28
                  .02317
                  .02254
                  .02194
                  .02137
                  .02082

                  29
                  .02472
                  .02405
                  .02342
                  .02281
                  .02223

                  30
                  .02645
                  .02574
                  .02506
                  .02441
                  .02379

                  31
                  .02832
                  .02756
                  .02684
                  .02615
                  .02549

                  32
                  .03037
                  .02957
                  .02880
                  .02806
                  .02736

                  33
                  .03261
                  .03175
                  .03093
                  .03015
                  .02940

                  34
                  .03502
                  .03411
                  .03324
                  .03241
                  .03162

                  35
                  .03764
                  .03668
                  .03576
                  .03488
                  .03403

                  36
                  .04048
                  .03945
                  .03847
                  .03754
                  .03664

                  37
                  .04352
                  .04244
                  .04140
                  .04040
                  .03945

                  38
                  .04677
                  .04563
                  .04453
                  .04347
                  .04246

                  39
                  .05024
                  .04903
                  .04787
                  .04675
                  .04568

                  40
                  .05394
                  .05266
                  .05143
                  .05025
                  .04912

                  41
                  .05789
                  .05653
                  .05524
                  .05399
                  .05279

                  42
                  .06212
                  .06069
                  .05932
                  .05800
                  .05674

                  43
                  .06661
                  .06511
                  .06366
                  .06227
                  .06093

                  44
                  .07138
                  .06980
                  .06828
                  .06682
                  .06541

                  45
                  .07642
                  .07476
                  .07316
                  .07162
                  .07013

                  46
                  .08174
                  .08000
                  .07832
                  .07670
                  .07514

                  47
                  .08736
                  .08553
                  .08377
                  .08207
                  .08042

                  48
                  .09331
                  .09140
                  .08955
                  .08776
                  .08604

                  49
                  .09959
                  .09759
                  .09565
                  .09378
                  .09198

                  50
                  .10624
                  .10414
                  .10212
                  .10016
                  .09827

                  51
                  .11322
                  .11104
                  .10892
                  .10688
                  .10490

                  52
                  .12057
                  .11829
                  .11608
                  .11395
                  .11188

                  53
                  .12827
                  .12590
                  .12360
                  .12138
                  .11922

                  54
                  .13631
                  .13384
                  .13145
                  .12913
                  .12689

                  55
                  .14469
                  .14213
                  .13964
                  .13724
                  .13490

                  56
                  .15341
                  .15075
                  .14817
                  .14567
                  .14324

                  57
                  .16250
                  .15975
                  .15708
                  .15448
                  .15196

                  58
                  .17196
                  .16911
                  .16634
                  .16365
                  .16104

                  59
                  .18183
                  .17888
                  .17602
                  .17324
                  .17053

                  60
                  .19210
                  .18906
                  .18611
                  .18323
                  .18043

                  61
                  .20283
                  .19970
                  .19665
                  .19368
                  .19079

                  62
                  .21402
                  .21079
                  .20766
                  .20460
                  .20162

                  63
                  .22568
                  .22237
                  .21914
                  .21600
                  .21293

                  64
                  .23780
                  .23440
                  .23109
                  .22786
                  .22471

                  65
                  .25038
                  .24690
                  .24350
                  .24019
                  .23695

                  66
                  .26342
                  .25986
                  .25638
                  .25298
                  .24967

                  67
                  .27689
                  .27325
                  .26970
                  .26623
                  .26284

                  68
                  .29081
                  .28711
                  .28248
                  .27994
                  .27647

                  69
                  .30523
                  .30145
                  .29776
                  .29415
                  .29062

                  70
                  .32015
                  .31632
                  .31257
                  .30890
                  .30530

                  71
                  .33568
                  .33179
                  .32799
                  .32426
                  .32061

                  72
                  .35182
                  .34789
                  .34404
                  .34027
                  .33657

                  73
                  .36851
                  .36455
                  .36066
                  .35685
                  .35311

                  74
                  .38555
                  .38156
                  .37765
                  .37381
                  .37004

                  75
                  .40278
                  .39877
                  .39484
                  .39098
                  .38710

                  76
                  .42010
                  .41608
                  .41213
                  .40826
                  .40445

                  77
                  .43746
                  .43344
                  .42949
                  .42561
                  .42179

                  78
                  .45489
                  .45088
                  .44693
                  .44305
                  .43923

                  79
                  .47248
                  .46848
                  .46454
                  .46067
                  .45686

                  80
                  .49028
                  .48631
                  .48240
                  .47854
                  .47475

                  82
                  .50818
                  .50423
                  .50035
                  .49653
                  .59276

                  82
                  .52600
                  .52210
                  .51826
                  .51447
                  .51074

                  83
                  .54377
                  .53992
                  .53613
                  .53238
                  .52869

                  84
                  .56160
                  .55781
                  .55407
                  .55038
                  .54674

                  85
                  .57956
                  .57584
                  .57216
                  .56854
                  .56496

                  86
                  .59717
                  .59353
                  .58993
                  .58638
                  .58287

                  87
                  .61385
                  .61028
                  .60676
                  .60328
                  .59984

                  88
                  .62950
                  .62601
                  .62256
                  .61915
                  .61578

                  89
                  .64445
                  .64104
                  .63767
                  .63434
                  .63105

                  90
                  .65920
                  .65588
                  .65259
                  .64934
                  .64612

                  91
                  .67362
                  .67039
                  .66719
                  .66402
                  .66089

                  92
                  .68720
                  .68405
                  .68094
                  .67786
                  .67481

                  93
                  .69962
                  .69657
                  .69354
                  .69054
                  .68757

                  94
                  .71078
                  .70780
                  .70485
                  .70193
                  .69903

                  95
                  .72053
                  .71763
                  .71475
                  .71189
                  .70906

                  96
                  .72872
                  .72587
                  .72305
                  .72026
                  .71748

                  97
                  .73604
                  .73325
                  .73048
                  .72773
                  .72501

                  98
                  .74239
                  .73964
                  .73692
                  .73422
                  .73154

                  99
                  .74833
                  .74562
                  .74294
                  .74028
                  .73764

                  100
                  .75423
                  .75156
                  .74892
                  .74630
                  .74370

                  101
                  .75928
                  .75664
                  .75403
                  .75144
                  .74887

                  102
                  .76469
                  .76209
                  .75950
                  .75694
                  .75440

                  103
                  .77174
                  .76918
                  .76664
                  .76413
                  .76163

                  104
                  .77824
                  .77571
                  .77320
                  .77071
                  .76824

                  105
                  .78845
                  .78599
                  .78354
                  .78111
                  .77870

                  106
                  .80579
                  .80346
                  .80115
                  .79885
                  .79657

                  107
                  .83070
                  .82860
                  .82652
                  .82444
                  .82238

                  108
                  .87182
                  .87016
                  .86852
                  .86688
                  .86525

                  109
                  .94170
                  .94092
                  .94014
                  .93937
                  .93860

              (e) Present value of the remainder interest in the case of transfers to pooled income funds for which the valuation date is after April 30, 1989, and before May 1, 1999—(1) In general. In the case of transfers to pooled income funds for which the valuation date is after April 30, 1989, and before May 1, 1999, 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)(5) 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. If the valuation date of a transfer to a pooled income fund is after April 30, 1989, and before June 10, 1994, a transferor can rely on Notice 89-24, 1989-1 C.B. 660, or Notice 89-60, 1989-1 C.B. 700, in valuing the transferred interest. (See § 601.601(d)(2)(ii)(b) of this chapter.)
              (2) 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 80CNSMT in § 20.2031-7A(e)(4) of this chapter (Estate Tax Regulations); 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)-6(e)(3)(ii) apply for the determining the yearly rate of return.
              (3) Pooled income funds in existence less than 3 taxable years. The provisions of § 1.642(c)-6(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.

              (4) 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 (e)(5) 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 (e)(5) 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 (e)(5) of this section are contained in Table S in Internal Revenue Service Publication 1457, “Actuarial Values, Alpha Volume,” (8-89). Publication 1457 is no longer available for purchase from the Superintendent of Documents, United States Government Printing Office, Washington, DC 20402. However, pertinent factors in this publication may be obtained by a written request to: CC:DOM:CORP:R (IRS Publication 1457), room 5226, Internal Revenue Service, POB 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)-6(e)(5).
              (5) Actuarial tables. In the case of transfers for which the valuation date is after April 30, 1989, and before May 1, 1999, 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 80CNSMT Single Life Remainder Factors
                [Applicable After April 30, 1989, and Before May 1, 1999]

                  Age
                  Interest rate
                  4.2%
                  4.4%
                  4.6%
                  4.8%
                  5.0%
                  5.2%
                  5.4%
                  5.6%
                  5.8%
                  6.0%

                  0
                  .07389
                  .06749
                  .06188
                  .05695
                  .05261
                  .04879
                  .04541
                  .04243
                  .03978
                  .03744

                  1
                  .06494
                  .05832
                  .05250
                  .04738
                  .04287
                  .03889
                  .03537
                  .03226
                  .02950
                  .02705

                  2
                  .06678
                  .05999
                  .05401
                  .04874
                  .04410
                  .03999
                  .03636
                  .03314
                  .03028
                  .02773

                  3
                  .06897
                  .06200
                  .05587
                  .05045
                  .04567
                  .04143
                  .03768
                  .03435
                  .03139
                  .02875

                  4
                  .07139
                  .06425
                  .05796
                  .05239
                  .04746
                  .04310
                  .03922
                  .03578
                  .03271
                  .02998

                  5
                  .07401
                  .06669
                  .06023
                  .05451
                  .04944
                  .04494
                  .04094
                  .03738
                  .03421
                  .03137

                  6
                  .07677
                  .06928
                  .06265
                  .05677
                  .05156
                  .04692
                  .04279
                  .03911
                  .03583
                  .03289

                  7
                  .07968
                  .07201
                  .06521
                  .05918
                  .05381
                  .04903
                  .04477
                  .04097
                  .03757
                  .03453

                  8
                  .08274
                  .07489
                  .06792
                  .06172
                  .05621
                  .05129
                  .04689
                  .04297
                  .03945
                  .03630

                  9
                  .08597
                  .07794
                  .07079
                  .06443
                  .05876
                  .05370
                  .04917
                  .04511
                  .04148
                  .03821

                  10
                  .08936
                  .08115
                  .07383
                  .06730
                  .06147
                  .05626
                  .05159
                  .04741
                  .04365
                  .04027

                  11
                  .09293
                  .08453
                  .07704
                  .07035
                  .06436
                  .05900
                  .05419
                  .04988
                  .04599
                  .04250

                  12
                  .09666
                  .08807
                  .08040
                  .07354
                  .06739
                  .06188
                  .05693
                  .05248
                  .04847
                  .04486

                  13
                  .10049
                  .09172
                  .08387
                  .07684
                  .07053
                  .06487
                  .05977
                  .05518
                  .05104
                  .04731

                  14
                  .10437
                  .09541
                  .08738
                  .08017
                  .07370
                  .06788
                  .06263
                  .05791
                  .05364
                  .04978

                  15
                  .10827
                  .09912
                  .09090
                  .08352
                  .07688
                  .07090
                  .06551
                  .06064
                  .05623
                  .05225

                  16
                  .11220
                  .10285
                  .09445
                  .08689
                  .08008
                  .07394
                  .06839
                  .06337
                  .05883
                  .05472

                  17
                  .11615
                  .10661
                  .09802
                  .09028
                  .08330
                  .07699
                  .07129
                  .06612
                  .06144
                  .05719

                  18
                  .12017
                  .11043
                  .10165
                  .09373
                  .08656
                  .08009
                  .07422
                  .06890
                  .06408
                  .05969

                  19
                  .12428
                  .11434
                  .10537
                  .09726
                  .08992
                  .08327
                  .07724
                  .07177
                  .06679
                  .06226

                  20
                  .12850
                  .11836
                  .10919
                  .10089
                  .09337
                  .08654
                  .08035
                  .07471
                  .06959
                  .06492

                  21
                  .13282
                  .12248
                  .11311
                  .10462
                  .09692
                  .08991
                  .08355
                  .07775
                  .07247
                  .06765

                  22
                  .13728
                  .12673
                  .11717
                  .10848
                  .10059
                  .09341
                  .08686
                  .08090
                  .07546
                  .07049

                  23
                  .14188
                  .13113
                  .12136
                  .11248
                  .10440
                  .09703
                  .09032
                  .08418
                  .07858
                  .07345

                  24
                  .14667
                  .13572
                  .12575
                  .11667
                  .10839
                  .10084
                  .09395
                  .08764
                  .08187
                  .07659

                  25
                  .15167
                  .14051
                  .13034
                  .12106
                  .11259
                  .10486
                  .09778
                  .09130
                  .08536
                  .07991

                  26
                  .15690
                  .14554
                  .13517
                  .12569
                  .11703
                  .10910
                  .10184
                  .09518
                  .08907
                  .08346

                  27
                  .16237
                  .15081
                  .14024
                  .13056
                  .12171
                  .11359
                  .10614
                  .09930
                  .09302
                  .08724

                  28
                  .16808
                  .15632
                  .14555
                  .13567
                  .12662
                  .11831
                  .11068
                  .10366
                  .09720
                  .09125

                  29
                  .17404
                  .16208
                  .15110
                  .14104
                  .13179
                  .12329
                  .11547
                  .10827
                  .10163
                  .09551

                  30
                  .18025
                  .16808
                  .15692
                  .14665
                  .13721
                  .12852
                  .12051
                  .11313
                  .10631
                  .10002

                  31
                  .18672
                  .17436
                  .16300
                  .15255
                  .14291
                  .13403
                  .12584
                  .11827
                  .11127
                  .10480

                  32
                  .19344
                  .18090
                  .16935
                  .15870
                  .14888
                  .13980
                  .13142
                  .12367
                  .11650
                  .10985

                  33
                  .20044
                  .18772
                  .17598
                  .16514
                  .15513
                  .14587
                  .13730
                  .12936
                  .12201
                  .11519

                  34
                  .20770
                  .19480
                  .18287
                  .17185
                  .16165
                  .15221
                  .14345
                  .13533
                  .12780
                  .12080

                  35
                  .21522
                  .20215
                  .19005
                  .17884
                  .16846
                  .15883
                  .14989
                  .14159
                  .13388
                  .12670

                  36
                  .22299
                  .20974
                  .19747
                  .18609
                  .17552
                  .16571
                  .15660
                  .14812
                  .14022
                  .13287

                  37
                  .23101
                  .21760
                  .20516
                  .19360
                  .18286
                  .17288
                  .16358
                  .15492
                  .14685
                  .13933

                  38
                  .23928
                  .22572
                  .21311
                  .20139
                  .19048
                  .18032
                  .17085
                  .16201
                  .15377
                  .14607

                  39
                  .24780
                  .23409
                  .22133
                  .20945
                  .19837
                  .18804
                  .17840
                  .16939
                  .16097
                  .15310

                  40
                  .25658
                  .24273
                  .22982
                  .21778
                  .20654
                  .19605
                  .18624
                  .17706
                  .16847
                  .16043

                  41
                  .26560
                  .25163
                  .23858
                  .22639
                  .21499
                  .20434
                  .19436
                  .18502
                  .17627
                  .16806

                  42
                  .27486
                  .26076
                  .24758
                  .23525
                  .22370
                  .21289
                  .20276
                  .19326
                  .18434
                  .17597

                  43
                  .28435
                  .27013
                  .25683
                  .24436
                  .23268
                  .22172
                  .21143
                  .20177
                  .19270
                  .18416

                  44
                  .29407
                  .27975
                  .26633
                  .25373
                  .24191
                  .23081
                  .22038
                  .21057
                  .20134
                  .19265

                  45
                  .30402
                  .28961
                  .27608
                  .26337
                  .25142
                  .24019
                  .22962
                  .21966
                  .21028
                  .20144

                  46
                  .31420
                  .29970
                  .28608
                  .27326
                  .26120
                  .24983
                  .23913
                  .22904
                  .21951
                  .21053

                  47
                  .32460
                  .31004
                  .29632
                  .28341
                  .27123
                  .25975
                  .24892
                  .23870
                  .22904
                  .21991

                  48
                  .33521
                  .32058
                  .30679
                  .29379
                  .28151
                  .26992
                  .25897
                  .24862
                  .23883
                  .22957

                  49
                  .34599
                  .33132
                  .31746
                  .30438
                  .29201
                  .28032
                  .26926
                  .25879
                  .24888
                  .23949

                  50
                  .35695
                  .34224
                  .32833
                  .31518
                  .30273
                  .29094
                  .27978
                  .26921
                  .25918
                  .24966

                  51
                  .36809
                  .35335
                  .33940
                  .32619
                  .31367
                  .30180
                  .29055
                  .27987
                  .26973
                  .26010

                  52
                  .37944
                  .36468
                  .35070
                  .33744
                  .32486
                  .31292
                  .30158
                  .29081
                  .28057
                  .27083

                  53
                  .39098
                  .37622
                  .36222
                  .34892
                  .33629
                  .32429
                  .31288
                  .30203
                  .29170
                  .28186

                  54
                  .40269
                  .38794
                  .37393
                  .36062
                  .34795
                  .33590
                  .32442
                  .31349
                  .30308
                  .29316

                  55
                  .41457
                  .39985
                  .38585
                  .37252
                  .35983
                  .34774
                  .33621
                  .32522
                  .31474
                  .30473

                  56
                  .42662
                  .41194
                  .39796
                  .38464
                  .37193
                  .35981
                  .34824
                  .33720
                  .32666
                  .31658

                  57
                  .43884
                  .42422
                  .41028
                  .39697
                  .38426
                  .37213
                  .36053
                  .34945
                  .33885
                  .32872

                  58
                  .45123
                  .43668
                  .42279
                  .40951
                  .39682
                  .38468
                  .37307
                  .36196
                  .35132
                  .34114

                  59
                  .46377
                  .44931
                  .43547
                  .42224
                  .40958
                  .39745
                  .38584
                  .37471
                  .36405
                  .35383

                  60
                  .47643
                  .46206
                  .44830
                  .43513
                  .42250
                  .41040
                  .39880
                  .38767
                  .37699
                  .36674

                  61
                  .48916
                  .47491
                  .46124
                  .44814
                  .43556
                  .42350
                  .41192
                  .40080
                  .39012
                  .37985

                  62
                  .50196
                  .48783
                  .47427
                  .46124
                  .44874
                  .43672
                  .42518
                  .41408
                  .40340
                  .39314

                  63
                  .51480
                  .50081
                  .48736
                  .47444
                  .46201
                  .45006
                  .43856
                  .42749
                  .41684
                  .40658

                  64
                  .52770
                  .51386
                  .50054
                  .48773
                  .47540
                  .46352
                  .45208
                  .44105
                  .43043
                  .42019

                  65
                  .54069
                  .52701
                  .51384
                  .50115
                  .48892
                  .47713
                  .46577
                  .45480
                  .44422
                  .43401

                  66
                  .55378
                  .54029
                  .52727
                  .51472
                  .50262
                  .49093
                  .47965
                  .46876
                  .45824
                  .44808

                  67
                  .56697
                  .55368
                  .54084
                  .52845
                  .51648
                  .50491
                  .49373
                  .48293
                  .47248
                  .46238

                  68
                  .58026
                  .56717
                  .55453
                  .54231
                  .53049
                  .51905
                  .50800
                  .49729
                  .48694
                  .47691

                  69
                  .59358
                  .58072
                  .56828
                  .55624
                  .54459
                  .53330
                  .52238
                  .51179
                  .50154
                  .49160

                  70
                  .60689
                  .59427
                  .58205
                  .57021
                  .55874
                  .54762
                  .53683
                  .52638
                  .51624
                  .50641

                  71
                  .62014
                  .60778
                  .59578
                  .58415
                  .57287
                  .56193
                  .55131
                  .54100
                  .53099
                  .52126

                  72
                  .63334
                  .62123
                  .60948
                  .59808
                  .58700
                  .57624
                  .56579
                  .55563
                  .54577
                  .53617

                  73
                  .64648
                  .63465
                  .62315
                  .61198
                  .60112
                  .59056
                  .58029
                  .57030
                  .56059
                  .55113

                  74
                  .65961
                  .64806
                  .63682
                  .62590
                  .61527
                  .60492
                  .59485
                  .58504
                  .57550
                  .56620

                  75
                  .67274
                  .66149
                  .65054
                  .63987
                  .62948
                  .61936
                  .60950
                  .59990
                  .59053
                  .58140

                  76
                  .68589
                  .67495
                  .66429
                  .65390
                  .64377
                  .63390
                  .62427
                  .61487
                  .60570
                  .59676

                  77
                  .69903
                  .68841
                  .67806
                  .66796
                  .65811
                  .64849
                  .63910
                  .62993
                  .62097
                  .61223

                  78
                  .71209
                  .70182
                  .69179
                  .68199
                  .67242
                  .66307
                  .65393
                  .64501
                  .63628
                  .62775

                  79
                  .72500
                  .71507
                  .70537
                  .69588
                  .68660
                  .67754
                  .66867
                  .65999
                  .65151
                  .64321

                  80
                  .73768
                  .72809
                  .71872
                  .70955
                  .70058
                  .69180
                  .68320
                  .67479
                  .66655
                  .65849

                  81
                  .75001
                  .74077
                  .73173
                  .72288
                  .71422
                  .70573
                  .69741
                  .68926
                  .68128
                  .67345

                  82
                  .76195
                  .75306
                  .74435
                  .73582
                  .72746
                  .71926
                  .71123
                  .70335
                  .69562
                  .68804

                  83
                  .77346
                  .76491
                  .75654
                  .74832
                  .74026
                  .73236
                  .72460
                  .71699
                  .70952
                  .70219

                  84
                  .78456
                  .77636
                  .76831
                  .76041
                  .75265
                  .74503
                  .73756
                  .73021
                  .72300
                  .71592

                  85
                  .79530
                  .78743
                  .77971
                  .77212
                  .76466
                  .75733
                  .75014
                  .74306
                  .73611
                  .72928

                  86
                  .80560
                  .79806
                  .79065
                  .78337
                  .77621
                  .76917
                  .76225
                  .75544
                  .74875
                  .74216

                  87
                  .81535
                  .80813
                  .80103
                  .79404
                  .78717
                  .78041
                  .77375
                  .76720
                  .76076
                  .75442

                  88
                  .82462
                  .81771
                  .81090
                  .80420
                  .79760
                  .79111
                  .78472
                  .77842
                  .77223
                  .76612

                  89
                  .83356
                  .82694
                  .82043
                  .81401
                  .80769
                  .80147
                  .79533
                  .78929
                  .78334
                  .77747

                  90
                  .84225
                  .83593
                  .82971
                  .82357
                  .81753
                  .81157
                  .80570
                  .79991
                  .79420
                  .78857

                  91
                  .85058
                  .84455
                  .83861
                  .83276
                  .82698
                  .82129
                  .81567
                  .81013
                  .80466
                  .79927

                  92
                  .85838
                  .85263
                  .84696
                  .84137
                  .83585
                  .83040
                  .82503
                  .81973
                  .81449
                  .80933

                  93
                  .86557
                  .86009
                  .85467
                  .84932
                  .84405
                  .83884
                  .83370
                  .82862
                  .82360
                  .81865

                  94
                  .87212
                  .86687
                  .86169
                  .85657
                  .85152
                  .84653
                  .84160
                  .83673
                  .83192
                  .82717

                  95
                  .87801
                  .87298
                  .86801
                  .86310
                  .85825
                  .85345
                  .84872
                  .84404
                  .83941
                  .83484

                  96
                  .88322
                  .87838
                  .87360
                  .86888
                  .86420
                  .85959
                  .85502
                  .85051
                  .84605
                  .84165

                  97
                  .88795
                  .88328
                  .87867
                  .87411
                  .86961
                  .86515
                  .86074
                  .85639
                  .85208
                  .84782

                  98
                  .89220
                  .88769
                  .88323
                  .87883
                  .87447
                  .87016
                  .86589
                  .86167
                  .85750
                  .85337

                  99
                  .89612
                  .89176
                  .88745
                  .88318
                  .87895
                  .87478
                  .87064
                  .86656
                  .86251
                  .85850

                  100
                  .89977
                  .89555
                  .89136
                  .88722
                  .88313
                  .87908
                  .87506
                  .87109
                  .86716
                  .86327

                  101
                  .90326
                  .89917
                  .89511
                  .89110
                  .88712
                  .88318
                  .87929
                  .87543
                  .87161
                  .86783

                  102
                  .90690
                  .90294
                  .89901
                  .89513
                  .89128
                  .88746
                  .88369
                  .87995
                  .87624
                  .87257

                  103
                  .91076
                  .90694
                  .90315
                  .89940
                  .89569
                  .89200
                  .88835
                  .88474
                  .88116
                  .87760

                  104
                  .91504
                  .91138
                  .90775
                  .90415
                  .90058
                  .89704
                  .89354
                  .89006
                  .88661
                  .88319

                  105
                  .92027
                  .91681
                  .91337
                  .90996
                  .90658
                  .90322
                  .89989
                  .89659
                  .89331
                  .89006

                  106
                  .92763
                  .92445
                  .92130
                  .91816
                  .91506
                  .91197
                  .90890
                  .90586
                  .90284
                  .89983

                  107
                  .93799
                  .93523
                  .93249
                  .92977
                  .92707
                  .92438
                  .92170
                  .91905
                  .91641
                  .91378

                  108
                  .95429
                  .95223
                  .95018
                  .94814
                  .94611
                  .94409
                  .94208
                  .94008
                  .93809
                  .93611

                  109
                  .97985
                  .97893
                  .97801
                  .97710
                  .97619
                  .97529
                  .97438
                  .97348
                  .97259
                  .97170

                Table S—Based on Life Table 80CNSMT Single Life Remainder Factors
                [Applicable After April 30, 1989, and Before May 1, 1999]

                  Age
                  Interest rate
                  6.2%
                  6.4%
                  6.6%
                  6.8%
                  7.0%
                  7.2%
                  7.4%
                  7.6%
                  7.8%
                  8.0%

                  0
                  .03535
                  .03349
                  .03183
                  .03035
                  .02902
                  .02783
                  .02676
                  .02579
                  .02492
                  .02413

                  1
                  .02486
                  .02292
                  .02119
                  .01963
                  .01824
                  .01699
                  .01587
                  .01486
                  .01395
                  .01312

                  2
                  .02547
                  .02345
                  .02164
                  .02002
                  .01857
                  .01727
                  .01609
                  .01504
                  .01408
                  .01321

                  3
                  .02640
                  .02429
                  .02241
                  .02073
                  .01921
                  .01785
                  .01662
                  .01552
                  .01451
                  .01361

                  4
                  .02753
                  .02535
                  .02339
                  .02163
                  .02005
                  .01863
                  .01735
                  .01619
                  .01514
                  .01418

                  5
                  .02883
                  .02656
                  .02453
                  .02269
                  .02105
                  .01956
                  .01822
                  .01700
                  .01590
                  .01490

                  6
                  .03026
                  .02790
                  .02578
                  .02387
                  .02215
                  .02060
                  .01919
                  .01792
                  .01677
                  .01572

                  7
                  .03180
                  .02935
                  .02714
                  .02515
                  .02336
                  .02174
                  .02027
                  .01894
                  .01773
                  .01664

                  8
                  .03347
                  .03092
                  .02863
                  .02656
                  .02469
                  .02300
                  .02146
                  .02007
                  .01881
                  .01766

                  9
                  .03528
                  .03263
                  .03025
                  .02810
                  .02615
                  .02438
                  .02278
                  .02133
                  .02000
                  .01880

                  10
                  .03723
                  .03449
                  .03201
                  .02977
                  .02774
                  .02590
                  .02423
                  .02271
                  .02133
                  .02006

                  11
                  .03935
                  .03650
                  .03393
                  .03160
                  .02949
                  .02757
                  .02583
                  .02424
                  .02279
                  .02147

                  12
                  .04160
                  .03865
                  .03598
                  .03356
                  .03136
                  .02936
                  .02755
                  .02589
                  .02438
                  .02299

                  13
                  .04394
                  .04088
                  .03811
                  .03560
                  .03331
                  .03123
                  .02934
                  .02761
                  .02603
                  .02458

                  14
                  .04629
                  .04312
                  .04025
                  .03764
                  .03527
                  .03311
                  .03113
                  .02933
                  .02768
                  .02617

                  15
                  .04864
                  .04536
                  .04238
                  .03968
                  .03721
                  .03496
                  .03290
                  .03103
                  .02930
                  .02773

                  16
                  .05099
                  .04759
                  .04451
                  .04170
                  .03913
                  .03679
                  .03466
                  .03270
                  .03090
                  .02926

                  17
                  .05333
                  .04982
                  .04662
                  .04370
                  .04104
                  .03861
                  .03638
                  .03434
                  .03247
                  .03075

                  18
                  .05570
                  .05207
                  .04875
                  .04573
                  .04296
                  .04044
                  .03812
                  .03599
                  .03404
                  .03225

                  19
                  .05814
                  .05438
                  .05095
                  .04781
                  .04494
                  .04231
                  .03990
                  .03769
                  .03565
                  .03378

                  20
                  .06065
                  .05677
                  .05321
                  .04996
                  .04698
                  .04424
                  .04173
                  .03943
                  .03731
                  .03535

                  21
                  .06325
                  .05922
                  .05554
                  .05217
                  .04907
                  .04623
                  .04362
                  .04122
                  .03901
                  .03697

                  22
                  .06594
                  .06178
                  .05797
                  .05447
                  .05126
                  .04831
                  .04559
                  .04309
                  .04078
                  .03865

                  23
                  .06876
                  .06446
                  .06051
                  .05688
                  .05355
                  .05048
                  .04766
                  .04505
                  .04265
                  .04042

                  24
                  .07174
                  .06729
                  .06321
                  .05945
                  .05599
                  .05281
                  .04987
                  .04715
                  .04465
                  .04233

                  25
                  .07491
                  .07031
                  .06609
                  .06219
                  .05861
                  .05530
                  .05224
                  .04941
                  .04680
                  .04438

                  26
                  .07830
                  .07355
                  .06918
                  .06515
                  .06142
                  .05799
                  .05481
                  .05187
                  .04915
                  .04662

                  27
                  .08192
                  .07702
                  .07250
                  .06832
                  .06446
                  .06090
                  .05759
                  .05454
                  .05170
                  .04906

                  28
                  .08577
                  .08071
                  .07603
                  .07171
                  .06772
                  .06402
                  .06059
                  .05740
                  .05445
                  .05170

                  29
                  .08986
                  .08464
                  .07981
                  .07534
                  .07120
                  .06736
                  .06380
                  .06049
                  .05742
                  .05456

                  30
                  .09420
                  .08882
                  .08383
                  .07921
                  .07492
                  .07095
                  .06725
                  .06381
                  .06061
                  .05763

                  31
                  .09881
                  .09327
                  .08812
                  .08335
                  .07891
                  .07479
                  .07095
                  .06738
                  .06405
                  .06095

                  32
                  .10369
                  .09797
                  .09267
                  .08774
                  .08315
                  .07888
                  .07491
                  .07120
                  .06774
                  .06451

                  33
                  .10885
                  .10297
                  .09750
                  .09241
                  .08767
                  .08325
                  .07913
                  .07529
                  .07170
                  .06834

                  34
                  .11430
                  .10824
                  .10261
                  .09736
                  .09246
                  .08790
                  .08363
                  .07964
                  .07592
                  .07243

                  35
                  .12002
                  .11380
                  .10800
                  .10259
                  .09754
                  .09282
                  .08841
                  .08428
                  .08041
                  .07679

                  36
                  .12602
                  .11963
                  .11366
                  .10809
                  .10288
                  .09800
                  .09344
                  .08917
                  .08516
                  .08140

                  37
                  .13230
                  .12574
                  .11961
                  .11387
                  .10850
                  .10347
                  .09876
                  .09433
                  .09018
                  .08628

                  38
                  .13887
                  .13214
                  .12584
                  .11994
                  .11441
                  .10922
                  .10436
                  .09978
                  .09549
                  .09145

                  39
                  .14573
                  .13883
                  .13237
                  .12630
                  .12061
                  .11527
                  .11025
                  .10553
                  .10109
                  .09690

                  40
                  .15290
                  .14583
                  .13920
                  .13297
                  .12712
                  .12162
                  .11644
                  .11157
                  .10698
                  .10266

                  41
                  .16036
                  .15312
                  .14633
                  .13994
                  .13393
                  .12827
                  .12294
                  .11792
                  .11318
                  .10871

                  42
                  .16810
                  .16071
                  .15375
                  .14720
                  .14103
                  .13522
                  .12973
                  .12456
                  .11967
                  .11505

                  43
                  .17614
                  .16858
                  .16146
                  .15475
                  .14842
                  .14245
                  .13682
                  .13149
                  .12645
                  .12169

                  44
                  .18447
                  .17675
                  .16948
                  .16261
                  .15613
                  .15000
                  .14421
                  .13873
                  .13355
                  .12864

                  45
                  .19310
                  .18524
                  .17780
                  .17078
                  .16414
                  .15787
                  .15192
                  .14630
                  .14096
                  .13591

                  46
                  .20204
                  .19402
                  .18644
                  .17926
                  .17247
                  .16604
                  .15995
                  .15418
                  .14870
                  .14350

                  47
                  .21128
                  .20311
                  .19538
                  .18806
                  .18112
                  .17454
                  .16830
                  .16238
                  .15676
                  .15141

                  48
                  .22080
                  .21249
                  .20462
                  .19716
                  .19007
                  .18335
                  .17696
                  .17090
                  .16513
                  .15964

                  49
                  .23059
                  .22214
                  .21413
                  .20653
                  .19930
                  .19244
                  .18591
                  .17970
                  .17379
                  .16816

                  50
                  .24063
                  .23206
                  .22391
                  .21617
                  .20881
                  .20180
                  .19514
                  .18879
                  .18274
                  .17697

                  51
                  .25095
                  .24225
                  .23398
                  .22610
                  .21861
                  .21147
                  .20466
                  .19818
                  .19199
                  .18609

                  52
                  .26157
                  .25275
                  .24436
                  .23636
                  .22874
                  .22147
                  .21453
                  .20791
                  .20159
                  .19556

                  53
                  .27249
                  .26357
                  .25505
                  .24694
                  .23919
                  .23180
                  .22474
                  .21799
                  .21154
                  .20537

                  54
                  .28369
                  .27466
                  .26604
                  .25782
                  .24995
                  .24244
                  .23526
                  .22839
                  .22181
                  .21552

                  55
                  .29518
                  .28605
                  .27734
                  .26900
                  .26103
                  .25341
                  .24611
                  .23912
                  .23243
                  .22601

                  56
                  .30695
                  .29774
                  .28893
                  .28050
                  .27242
                  .26469
                  .25728
                  .25019
                  .24338
                  .23685

                  57
                  .31902
                  .30973
                  .30084
                  .29232
                  .28415
                  .27632
                  .26881
                  .26161
                  .25469
                  .24805

                  58
                  .33138
                  .32203
                  .31306
                  .30446
                  .29621
                  .28829
                  .28069
                  .27339
                  .26637
                  .25962

                  59
                  .34402
                  .33461
                  .32558
                  .31691
                  .30859
                  .30059
                  .29290
                  .28550
                  .27839
                  .27155

                  60
                  .35690
                  .34745
                  .33836
                  .32963
                  .32124
                  .31317
                  .30540
                  .29792
                  .29073
                  .28379

                  61
                  .36999
                  .36050
                  .35137
                  .34259
                  .33414
                  .32601
                  .31817
                  .31062
                  .30334
                  .29633

                  62
                  .38325
                  .37374
                  .36458
                  .35576
                  .34726
                  .33907
                  .33117
                  .32356
                  .31621
                  .30912

                  63
                  .39669
                  .38717
                  .37799
                  .36913
                  .36060
                  .35236
                  .34441
                  .33674
                  .32933
                  .32217

                  64
                  .41031
                  .40078
                  .39159
                  .38272
                  .37415
                  .36588
                  .35789
                  .35016
                  .34270
                  .33548

                  65
                  .42416
                  .41464
                  .40545
                  .39656
                  .38798
                  .37968
                  .37166
                  .36390
                  .35639
                  .34912

                  66
                  .43825
                  .42876
                  .41958
                  .41070
                  .40211
                  .39380
                  .38576
                  .37797
                  .37043
                  .36312

                  67
                  .45260
                  .44315
                  .43399
                  .42513
                  .41655
                  .40824
                  .40019
                  .39238
                  .38482
                  .37749

                  68
                  .46720
                  .45779
                  .44868
                  .43985
                  .43129
                  .42299
                  .41494
                  .40713
                  .39956
                  .39221

                  69
                  .48197
                  .47263
                  .46357
                  .45478
                  .44625
                  .43798
                  .42995
                  .42215
                  .41458
                  .40722

                  70
                  .49686
                  .48760
                  .47861
                  .46988
                  .46140
                  .45316
                  .44516
                  .43738
                  .42983
                  .42248

                  71
                  .51182
                  .50265
                  .49374
                  .48508
                  .47666
                  .46847
                  .46051
                  .45276
                  .44523
                  .43790

                  72
                  .52685
                  .51778
                  .50896
                  .50038
                  .49203
                  .48390
                  .47599
                  .46829
                  .46079
                  .45349

                  73
                  .54194
                  .53298
                  .52426
                  .51578
                  .50751
                  .49946
                  .49161
                  .48397
                  .47652
                  .46926

                  74
                  .55714
                  .54832
                  .53972
                  .53134
                  .52317
                  .51520
                  .50744
                  .49986
                  .49247
                  .48527

                  75
                  .57250
                  .56382
                  .55536
                  .54710
                  .53904
                  .53118
                  .52351
                  .51601
                  .50870
                  .50156

                  76
                  .58803
                  .57951
                  .57120
                  .56308
                  .55515
                  .54740
                  .53984
                  .53245
                  .52522
                  .51817

                  77
                  .60369
                  .59535
                  .58720
                  .57923
                  .57144
                  .56383
                  .55639
                  .54912
                  .54200
                  .53504

                  78
                  .61942
                  .61126
                  .60329
                  .59549
                  .58787
                  .58040
                  .57310
                  .56596
                  .55896
                  .55212

                  79
                  .63508
                  .62713
                  .61935
                  .61174
                  .60428
                  .59698
                  .58983
                  .58283
                  .57597
                  .56925

                  80
                  .65059
                  .64285
                  .63527
                  .62785
                  .62058
                  .61345
                  .60646
                  .59961
                  .59290
                  .58632

                  81
                  .66579
                  .65827
                  .65090
                  .64368
                  .63659
                  .62965
                  .62283
                  .61615
                  .60959
                  .60316

                  82
                  .68061
                  .67332
                  .66616
                  .65914
                  .65226
                  .64550
                  .63886
                  .63235
                  .62595
                  .61968

                  83
                  .69499
                  .68793
                  .68099
                  .67418
                  .66749
                  .66092
                  .65447
                  .64813
                  .64191
                  .63579

                  84
                  .70896
                  .70213
                  .69541
                  .68881
                  .68233
                  .67595
                  .66969
                  .66353
                  .65748
                  .65153

                  85
                  .72256
                  .71596
                  .70947
                  .70308
                  .69681
                  .69063
                  .68456
                  .67859
                  .67271
                  .66693

                  86
                  .73569
                  .72931
                  .72305
                  .71688
                  .71081
                  .70484
                  .69896
                  .69318
                  .68748
                  .68188

                  87
                  .74818
                  .74204
                  .73599
                  .73003
                  .72417
                  .71839
                  .71271
                  .70711
                  .70159
                  .69616

                  88
                  .76011
                  .75419
                  .74836
                  .74261
                  .73695
                  .73137
                  .72588
                  .72046
                  .71512
                  .70986

                  89
                  .77169
                  .76599
                  .76037
                  .75484
                  .74938
                  .74400
                  .73870
                  .73347
                  .72831
                  .72323

                  90
                  .78302
                  .77755
                  .77215
                  .76683
                  .76158
                  .75640
                  .75129
                  .74625
                  .74128
                  .73638

                  91
                  .79395
                  .78870
                  .78352
                  .77842
                  .77337
                  .76840
                  .76349
                  .75864
                  .75385
                  .74913

                  92
                  .80423
                  .79920
                  .79423
                  .78933
                  .78449
                  .77971
                  .77499
                  .77033
                  .76572
                  .76118

                  93
                  .81377
                  .80894
                  .80417
                  .79946
                  .79481
                  .79022
                  .78568
                  .78120
                  .77677
                  .77239

                  94
                  .82247
                  .81784
                  .81325
                  .80873
                  .80425
                  .79983
                  .79547
                  .79115
                  .78688
                  .78266

                  95
                  .83033
                  .82586
                  .82145
                  .81709
                  .81278
                  .80852
                  .80431
                  .80014
                  .79602
                  .79195

                  96
                  .83729
                  .83298
                  .82872
                  .82451
                  .82034
                  .81622
                  .81215
                  .80812
                  .80414
                  .80019

                  97
                  .84361
                  .83944
                  .83532
                  .83124
                  .82721
                  .82322
                  .81927
                  .81537
                  .81151
                  .80769

                  98
                  .84929
                  .84525
                  .84126
                  .83730
                  .83339
                  .82952
                  .82569
                  .82190
                  .81815
                  .81443

                  99
                  .85454
                  .85062
                  .84674
                  .84290
                  .83910
                  .83534
                  .83161
                  .82792
                  .82427
                  .82066

                  100
                  .85942
                  .85561
                  .85184
                  .84810
                  .84440
                  .84074
                  .83711
                  .83352
                  .82997
                  .82644

                  101
                  .86408
                  .86037
                  .85670
                  .85306
                  .84946
                  .84589
                  .84236
                  .83886
                  .83539
                  .83196

                  102
                  .86894
                  .86534
                  .86177
                  .85823
                  .85473
                  .85126
                  .84782
                  .84442
                  .84104
                  .83770

                  103
                  .87408
                  .87060
                  .86714
                  .86371
                  .86032
                  .85695
                  .85362
                  .85031
                  .84703
                  .84378

                  104
                  .87980
                  .87644
                  .87311
                  .86980
                  .86653
                  .86328
                  .86005
                  .85686
                  .85369
                  .85054

                  105
                  .88684
                  .88363
                  .88046
                  .87731
                  .87418
                  .87108
                  .86800
                  .86494
                  .86191
                  .85890

                  106
                  .89685
                  .89389
                  .89095
                  .88804
                  .88514
                  .88226
                  .87940
                  .87656
                  .87374
                  .87094

                  107
                  .91117
                  .90858
                  .90600
                  .90344
                  .90089
                  .89836
                  .89584
                  .89334
                  .89085
                  .88838

                  108
                  .93414
                  .93217
                  .93022
                  .92828
                  .92634
                  .92442
                  .92250
                  .92060
                  .91870
                  .91681

                  109
                  .97081
                  .96992
                  .96904
                  .96816
                  .96729
                  .96642
                  .96555
                  .96468
                  .96382
                  .96296

                Table S—Based on Life Table 80CNSMT Single Life Remainder Factors
                [Applicable After April 30, 1989, and Before May 1, 1999]

                  Age
                  Interest rate
                  8.2%
                  8.4%
                  8.6%
                  8.8%
                  9.0%
                  9.2%
                  9.4%
                  9.6%
                  9.8%
                  10.0%

                  0
                  .02341
                  .02276
                  .02217
                  .02163
                  .02114
                  .02069
                  .02027
                  .01989
                  .01954
                  .01922

                  1
                  .01237
                  .01170
                  .01108
                  .01052
                  .01000
                  .00953
                  .00910
                  .00871
                  .00834
                  .00801

                  2
                  .01243
                  .01172
                  .01107
                  .01048
                  .00994
                  .00944
                  .00899
                  .00857
                  .00819
                  .00784

                  3
                  .01278
                  .01203
                  .01135
                  .01073
                  .01016
                  .00964
                  .00916
                  .00872
                  .00832
                  .00795

                  4
                  .01332
                  .01253
                  .01182
                  .01116
                  .01056
                  .01001
                  .00951
                  .00904
                  .00862
                  .00822

                  5
                  .01400
                  .01317
                  .01241
                  .01172
                  .01109
                  .01051
                  .00998
                  .00949
                  .00904
                  .00862

                  6
                  .01477
                  .01390
                  .01310
                  .01238
                  .01171
                  .01110
                  .01054
                  .01002
                  .00954
                  .00910

                  7
                  .01563
                  .01472
                  .01389
                  .01312
                  .01242
                  .01178
                  .01118
                  .01064
                  .01013
                  .00966

                  8
                  .01660
                  .01564
                  .01477
                  .01396
                  .01322
                  .01254
                  .01192
                  .01134
                  .01081
                  .01031

                  9
                  .01770
                  .01669
                  .01577
                  .01492
                  .01414
                  .01342
                  .01276
                  .01216
                  .01159
                  .01107

                  10
                  .01891
                  .01785
                  .01688
                  .01599
                  .01517
                  .01442
                  .01372
                  .01308
                  .01249
                  .01194

                  11
                  .02026
                  .01915
                  .01814
                  .01720
                  .01634
                  .01555
                  .01481
                  .01414
                  .01351
                  .01293

                  12
                  .02173
                  .02056
                  .01950
                  .01852
                  .01761
                  .01678
                  .01601
                  .01529
                  .01463
                  .01402

                  13
                  .02326
                  .02204
                  .02092
                  .01989
                  .01895
                  .01807
                  .01726
                  .01651
                  .01582
                  .01517

                  14
                  .02478
                  .02351
                  .02234
                  .02126
                  .02027
                  .01935
                  .01850
                  .01771
                  .01698
                  .01630

                  15
                  .02628
                  .02495
                  .02372
                  .02259
                  .02155
                  .02058
                  .01969
                  .01886
                  .01810
                  .01738

                  16
                  .02774
                  .02635
                  .02507
                  .02388
                  .02279
                  .02178
                  .02084
                  .01997
                  .01917
                  .01842

                  17
                  .02917
                  .02772
                  .02637
                  .02513
                  .02399
                  .02293
                  .02194
                  .02103
                  .02018
                  .01940

                  18
                  .03059
                  .02907
                  .02767
                  .02637
                  .02517
                  .02406
                  .02302
                  .02207
                  .02118
                  .02035

                  19
                  .03205
                  .03046
                  .02899
                  .02763
                  .02637
                  .02521
                  .02412
                  .02312
                  .02218
                  .02131

                  20
                  .03355
                  .03188
                  .03035
                  .02892
                  .02760
                  .02638
                  .02524
                  .02419
                  .02320
                  .02229

                  21
                  .03509
                  .03334
                  .03173
                  .03024
                  .02886
                  .02758
                  .02638
                  .02527
                  .02424
                  .02328

                  22
                  .03669
                  .03487
                  .03318
                  .03162
                  .03017
                  .02882
                  .02757
                  .02640
                  .02532
                  .02430

                  23
                  .03837
                  .03646
                  .03470
                  .03306
                  .03154
                  .03013
                  .02881
                  .02759
                  .02644
                  .02538

                  24
                  .04018
                  .03819
                  .03634
                  .03463
                  .03303
                  .03155
                  .03016
                  .02888
                  .02767
                  .02655

                  25
                  .04214
                  .04006
                  .03812
                  .03633
                  .03465
                  .03309
                  .03164
                  .03029
                  .02902
                  .02784

                  26
                  .04428
                  .04210
                  .04008
                  .03820
                  .03644
                  .03481
                  .03328
                  .03186
                  .03052
                  .02928

                  27
                  .04662
                  .04434
                  .04223
                  .04025
                  .03841
                  .03670
                  .03509
                  .03360
                  .03219
                  .03088

                  28
                  .04915
                  .04677
                  .04456
                  .04249
                  .04056
                  .03876
                  .03708
                  .03550
                  .03403
                  .03264

                  29
                  .05189
                  .04941
                  .04709
                  .04493
                  .04291
                  .04102
                  .03925
                  .03760
                  .03604
                  .03458

                  30
                  .05485
                  .05226
                  .04984
                  .04757
                  .04546
                  .04348
                  .04162
                  .03988
                  .03825
                  .03671

                  31
                  .05805
                  .05535
                  .05282
                  .05045
                  .04824
                  .04616
                  .04421
                  .04238
                  .04067
                  .03905

                  32
                  .06149
                  .05867
                  .05603
                  .05356
                  .05124
                  .04906
                  .04702
                  .04510
                  .04329
                  .04160

                  33
                  .06520
                  .06226
                  .05950
                  .05692
                  .05449
                  .05221
                  .05007
                  .04806
                  .04616
                  .04438

                  34
                  .06916
                  .06609
                  .06322
                  .06052
                  .05799
                  .05560
                  .05336
                  .05125
                  .04926
                  .04738

                  35
                  .07339
                  .07020
                  .06720
                  .06439
                  .06174
                  .05925
                  .05690
                  .05469
                  .05260
                  .05063

                  36
                  .07787
                  .07455
                  .07143
                  .06850
                  .06573
                  .06313
                  .06068
                  .05836
                  .05617
                  .05411

                  37
                  .08262
                  .07917
                  .07593
                  .07287
                  .06999
                  .06727
                  .06470
                  .06228
                  .05999
                  .05783

                  38
                  .08765
                  .08407
                  .08069
                  .07751
                  .07451
                  .07167
                  .06899
                  .06646
                  .06407
                  .06180

                  39
                  .09296
                  .08925
                  .08574
                  .08243
                  .07931
                  .07635
                  .07356
                  .07092
                  .06841
                  .06604

                  40
                  .09858
                  .09472
                  .09109
                  .08765
                  .08440
                  .08132
                  .07841
                  .07565
                  .07303
                  .07055

                  41
                  .10449
                  .10050
                  .09673
                  .09316
                  .08978
                  .08658
                  .08355
                  .08067
                  .07794
                  .07535

                  42
                  .11069
                  .10656
                  .10265
                  .09895
                  .09544
                  .09212
                  .08896
                  .08596
                  .08312
                  .08041

                  43
                  .11718
                  .11291
                  .10887
                  .10503
                  .10140
                  .09794
                  .09466
                  .09154
                  .08858
                  .08576

                  44
                  .12399
                  .11958
                  .11540
                  .11143
                  .10766
                  .10407
                  .10067
                  .09743
                  .09434
                  .09141

                  45
                  .13111
                  .12656
                  .12224
                  .11814
                  .11423
                  .11052
                  .10699
                  .10362
                  .10042
                  .09736

                  46
                  .13856
                  .13387
                  .12941
                  .12516
                  .12113
                  .11728
                  .11362
                  .11013
                  .10680
                  .10363

                  47
                  .14633
                  .14150
                  .13690
                  .13252
                  .12835
                  .12438
                  .12059
                  .11697
                  .11352
                  .11022

                  48
                  .15442
                  .14945
                  .14471
                  .14020
                  .13589
                  .13179
                  .12787
                  .12412
                  .12055
                  .11713

                  49
                  .16280
                  .15769
                  .15281
                  .14816
                  .14373
                  .13949
                  .13544
                  .13157
                  .12787
                  .12433

                  50
                  .17147
                  .16622
                  .16121
                  .15643
                  .15186
                  .14749
                  .14331
                  .13931
                  .13548
                  .13182

                  51
                  .18045
                  .17507
                  .16993
                  .16501
                  .16030
                  .15580
                  .15150
                  .14737
                  .14342
                  .13963

                  52
                  .18979
                  .18427
                  .17899
                  .17394
                  .16911
                  .16448
                  .16004
                  .15579
                  .15172
                  .14780

                  53
                  .19947
                  .19383
                  .18842
                  .18324
                  .17828
                  .17352
                  .16896
                  .16458
                  .16038
                  .15635

                  54
                  .20950
                  .20372
                  .19819
                  .19288
                  .18779
                  .18291
                  .17822
                  .17372
                  .16940
                  .16524

                  55
                  .21986
                  .21397
                  .20831
                  .20288
                  .19767
                  .19266
                  .18785
                  .18322
                  .17878
                  .17450

                  56
                  .23058
                  .22457
                  .21879
                  .21324
                  .20791
                  .20278
                  .19785
                  .19310
                  .18854
                  .18414

                  57
                  .24167
                  .23554
                  .22965
                  .22399
                  .21854
                  .21329
                  .20824
                  .20338
                  .19870
                  .19419

                  58
                  .25314
                  .24690
                  .24090
                  .23512
                  .22956
                  .22420
                  .21904
                  .21407
                  .20927
                  .20464

                  59
                  .26497
                  .25863
                  .25252
                  .24664
                  .24097
                  .23550
                  .23023
                  .22515
                  .22024
                  .21551

                  60
                  .27712
                  .27068
                  .26448
                  .25849
                  .25272
                  .24716
                  .24178
                  .23659
                  .23158
                  .22674

                  61
                  .28956
                  .28304
                  .27674
                  .27067
                  .26480
                  .25913
                  .25366
                  .24837
                  .24325
                  .23831

                  62
                  .30228
                  .29567
                  .28929
                  .28312
                  .27717
                  .27141
                  .26584
                  .26045
                  .25524
                  .25020

                  63
                  .31525
                  .30857
                  .30211
                  .29586
                  .28982
                  .28397
                  .27832
                  .27284
                  .26754
                  .26240

                  64
                  .32851
                  .32176
                  .31522
                  .30890
                  .30278
                  .29685
                  .29111
                  .28555
                  .28016
                  .27493

                  65
                  .34209
                  .33528
                  .32868
                  .32229
                  .31610
                  .31010
                  .30429
                  .29865
                  .29317
                  .28787

                  66
                  .35604
                  .34918
                  .34253
                  .33609
                  .32983
                  .32377
                  .31788
                  .31217
                  .30663
                  .30124

                  67
                  .37037
                  .36347
                  .35678
                  .35028
                  .34398
                  .33786
                  .33191
                  .32614
                  .32053
                  .31508

                  68
                  .38508
                  .37815
                  .37142
                  .36489
                  .35854
                  .35237
                  .34638
                  .34055
                  .33488
                  .32937

                  69
                  .40008
                  .39313
                  .38638
                  .37982
                  .37344
                  .36724
                  .36120
                  .35533
                  .34961
                  .34405

                  70
                  .41533
                  .40838
                  .40162
                  .39504
                  .38864
                  .38241
                  .37634
                  .37043
                  .36468
                  .35907

                  71
                  .43076
                  .42382
                  .41705
                  .41047
                  .40405
                  .39780
                  .39171
                  .38578
                  .38000
                  .37436

                  72
                  .44638
                  .43945
                  .43269
                  .42611
                  .41969
                  .41344
                  .40733
                  .40138
                  .39558
                  .38991

                  73
                  .46218
                  .45527
                  .44854
                  .44197
                  .43556
                  .42931
                  .42321
                  .41725
                  .41143
                  .40575

                  74
                  .47823
                  .47137
                  .46466
                  .45812
                  .45173
                  .44549
                  .43940
                  .43345
                  .42763
                  .42195

                  75
                  .49459
                  .48777
                  .48112
                  .47462
                  .46826
                  .46205
                  .45598
                  .45004
                  .44424
                  .43856

                  76
                  .51127
                  .50452
                  .49793
                  .49148
                  .48517
                  .47900
                  .47297
                  .46706
                  .46129
                  .45563

                  77
                  .52823
                  .52157
                  .51505
                  .50867
                  .50243
                  .49632
                  .49033
                  .48447
                  .47873
                  .47311

                  78
                  .54541
                  .53885
                  .53242
                  .52613
                  .51996
                  .51392
                  .50800
                  .50220
                  .49652
                  .49094

                  79
                  .56267
                  .55621
                  .54989
                  .54369
                  .53762
                  .53166
                  .52582
                  .52009
                  .51448
                  .50897

                  80
                  .57987
                  .57354
                  .56733
                  .56125
                  .55527
                  .54941
                  .54366
                  .53802
                  .53248
                  .52705

                  81
                  .59685
                  .59065
                  .58457
                  .57860
                  .57274
                  .56699
                  .56134
                  .55579
                  .55035
                  .54499

                  82
                  .61351
                  .60746
                  .60151
                  .59567
                  .58993
                  .58429
                  .57875
                  .57331
                  .56796
                  .56270

                  83
                  .62978
                  .62387
                  .61806
                  .61236
                  .60675
                  .60123
                  .59581
                  .59047
                  .58523
                  .58007

                  84
                  .64567
                  .63992
                  .63426
                  .62869
                  .62321
                  .61783
                  .61253
                  .60731
                  .60218
                  .59713

                  85
                  .66125
                  .65565
                  .65014
                  .64472
                  .63938
                  .63413
                  .62896
                  .62387
                  .61886
                  .61392

                  86
                  .67636
                  .67092
                  .66557
                  .66030
                  .65511
                  .65000
                  .64496
                  .64000
                  .63511
                  .63030

                  87
                  .69081
                  .68554
                  .68034
                  .67522
                  .67018
                  .66520
                  .66031
                  .65548
                  .65071
                  .64602

                  88
                  .70468
                  .69957
                  .69453
                  .68956
                  .68466
                  .67983
                  .67507
                  .67037
                  .66574
                  .66117

                  89
                  .71821
                  .71326
                  .70838
                  .70357
                  .69882
                  .69414
                  .68952
                  .68495
                  .68045
                  .67601

                  90
                  .73153
                  .72676
                  .72204
                  .71739
                  .71280
                  .70827
                  .70379
                  .69938
                  .69502
                  .69071

                  91
                  .74447
                  .73986
                  .73532
                  .73083
                  .72640
                  .72202
                  .71770
                  .71343
                  .70921
                  .70504

                  92
                  .75669
                  .75225
                  .74787
                  .74354
                  .73927
                  .73504
                  .73087
                  .72674
                  .72267
                  .71864

                  93
                  .76807
                  .76379
                  .75957
                  .75540
                  .75127
                  .74719
                  .74317
                  .73918
                  .73524
                  .73135

                  94
                  .77849
                  .77437
                  .77030
                  .76627
                  .76229
                  .75835
                  .75446
                  .75061
                  .74680
                  .74303

                  95
                  .78792
                  .78394
                  .78001
                  .77611
                  .77226
                  .76845
                  .76468
                  .76096
                  .75727
                  .75362

                  96
                  .79630
                  .79244
                  .78863
                  .78485
                  .78112
                  .77742
                  .77377
                  .77015
                  .76657
                  .76303

                  97
                  .80391
                  .80016
                  .79646
                  .79280
                  .78917
                  .78559
                  .78203
                  .77852
                  .77504
                  .77160

                  98
                  .81076
                  .80712
                  .80352
                  .79996
                  .79643
                  .79294
                  .78948
                  .78606
                  .78267
                  .77931

                  99
                  .81709
                  .81354
                  .81004
                  .80657
                  .80313
                  .79972
                  .79635
                  .79302
                  .78971
                  .78644

                  100
                  .82296
                  .81950
                  .81609
                  .81270
                  .80934
                  .80602
                  .80273
                  .79947
                  .79624
                  .79304

                  101
                  .82855
                  .82518
                  .82185
                  .81854
                  .81526
                  .81201
                  .80880
                  .80561
                  .80245
                  .79932

                  102
                  .83438
                  .83110
                  .82785
                  .82462
                  .82142
                  .81826
                  .81512
                  .81200
                  .80892
                  .80586

                  103
                  .84056
                  .83737
                  .83420
                  .83106
                  .82795
                  .82487
                  .82181
                  .81878
                  .81577
                  .81279

                  104
                  .84743
                  .84433
                  .84127
                  .83822
                  .83521
                  .83221
                  .82924
                  .82630
                  .82338
                  .82048

                  105
                  .85591
                  .85295
                  .85001
                  .84709
                  .84419
                  .84132
                  .83846
                  .83563
                  .83282
                  .83003

                  106
                  .86816
                  .86540
                  .86266
                  .85993
                  .85723
                  .85454
                  .85187
                  .84922
                  .84659
                  .84397

                  107
                  .88592
                  .88348
                  .88105
                  .87863
                  .87623
                  .87384
                  .87147
                  .86911
                  .86676
                  .86443

                  108
                  .91493
                  .91306
                  .91119
                  .90934
                  .90749
                  .90566
                  .90383
                  .90201
                  .90020
                  .89840

                  109
                  .96211
                  .96125
                  .96041
                  .95956
                  .95872
                  .95788
                  .95704
                  .95620
                  .95537
                  .95455

                Table S—Based on Life Table 80CNSMT Single Life Remainder Factors
                [Applicable After April 30, 1989, Before May 1, 1999]

                  Age
                  Interest rate
                  10.2%
                  10.4%
                  10.6%
                  10.8%
                  11.0%
                  11.2%
                  11.4%
                  11.6%
                  11.8%
                  12.0%

                  0
                  .01891
                  .01864
                  .01838
                  .01814
                  .01791
                  .01770
                  .01750
                  .01732
                  .01715
                  .01698

                  1
                  .00770
                  .00741
                  .00715
                  .00690
                  .00667
                  .00646
                  .00626
                  .00608
                  .00590
                  .00574

                  2
                  .00751
                  .00721
                  .00693
                  .00667
                  .00643
                  .00620
                  .00600
                  .00580
                  .00562
                  .00544

                  3
                  .00760
                  .00728
                  .00699
                  .00671
                  .00646
                  .00622
                  .00600
                  .00579
                  .00560
                  .00541

                  4
                  .00786
                  .00752
                  .00721
                  .00692
                  .00665
                  .00639
                  .00616
                  .00594
                  .00573
                  .00554

                  5
                  .00824
                  .00788
                  .00755
                  .00724
                  .00695
                  .00668
                  .00643
                  .00620
                  .00598
                  .00578

                  6
                  .00869
                  .00832
                  .00796
                  .00764
                  .00733
                  .00705
                  .00678
                  .00654
                  .00630
                  .00608

                  7
                  .00923
                  .00883
                  .00846
                  .00811
                  .00779
                  .00749
                  .00720
                  .00694
                  .00669
                  .00646

                  8
                  .00986
                  .00943
                  .00904
                  .00867
                  .00833
                  .00801
                  .00771
                  .00743
                  .00716
                  .00692

                  9
                  .01059
                  .01014
                  .00972
                  .00933
                  .00897
                  .00863
                  .00831
                  .00801
                  .00773
                  .00747

                  10
                  .01142
                  .01095
                  .01051
                  .01009
                  .00971
                  .00935
                  .00901
                  .00869
                  .00840
                  .00812

                  11
                  .01239
                  .01189
                  .01142
                  .01098
                  .01057
                  .01019
                  .00983
                  .00950
                  .00918
                  .00889

                  12
                  .01345
                  .01292
                  .01243
                  .01197
                  .01154
                  .01113
                  .01075
                  .01040
                  .01007
                  .00975

                  13
                  .01457
                  .01401
                  .01349
                  .01300
                  .01255
                  .01212
                  .01172
                  .01135
                  .01100
                  .01067

                  14
                  .01567
                  .01508
                  .01453
                  .01402
                  .01354
                  .01309
                  .01267
                  .01227
                  .01190
                  .01155

                  15
                  .01672
                  .01610
                  .01552
                  .01498
                  .01448
                  .01400
                  .01356
                  .01314
                  .01275
                  .01238

                  16
                  .01772
                  .01707
                  .01646
                  .01589
                  .01536
                  .01486
                  .01439
                  .01396
                  .01354
                  .01315

                  17
                  .01866
                  .01798
                  .01734
                  .01674
                  .01618
                  .01566
                  .01516
                  .01470
                  .01427
                  .01386

                  18
                  .01958
                  .01886
                  .01818
                  .01755
                  .01697
                  .01641
                  .01590
                  .01541
                  .01495
                  .01452

                  19
                  .02050
                  .01974
                  .01903
                  .01837
                  .01775
                  .01717
                  .01662
                  .01611
                  .01563
                  .01517

                  20
                  .02143
                  .02064
                  .01989
                  .01919
                  .01854
                  .01793
                  .01735
                  .01681
                  .01630
                  .01582

                  21
                  .02238
                  .02154
                  .02075
                  .02002
                  .01933
                  .01868
                  .01807
                  .01750
                  .01696
                  .01646

                  22
                  .02336
                  .02247
                  .02164
                  .02087
                  .02014
                  .01946
                  .01882
                  .01821
                  .01764
                  .01711

                  23
                  .02438
                  .02345
                  .02257
                  .02176
                  .02099
                  .02027
                  .01959
                  .01895
                  .01835
                  .01778

                  24
                  .02550
                  .02451
                  .02359
                  .02273
                  .02192
                  .02115
                  .02044
                  .01976
                  .01913
                  .01853

                  25
                  .02673
                  .02569
                  .02472
                  .02381
                  .02295
                  .02214
                  .02138
                  .02067
                  .01999
                  .01936

                  26
                  .02811
                  .02701
                  .02598
                  .02502
                  .02411
                  .02326
                  .02246
                  .02170
                  .02098
                  .02031

                  27
                  .02965
                  .02849
                  .02741
                  .02639
                  .02543
                  .02452
                  .02367
                  .02287
                  .02211
                  .02140

                  28
                  .03134
                  .03013
                  .02898
                  .02790
                  .02689
                  .02593
                  .02503
                  .02418
                  .02338
                  .02262

                  29
                  .03322
                  .03193
                  .03072
                  .02958
                  .02851
                  .02750
                  .02654
                  .02564
                  .02479
                  .02398

                  30
                  .03527
                  .03391
                  .03264
                  .03143
                  .03030
                  .02923
                  .02821
                  .02726
                  .02635
                  .02550

                  31
                  .03753
                  .03610
                  .03475
                  .03348
                  .03228
                  .03115
                  .03008
                  .02907
                  .02811
                  .02720

                  32
                  .04000
                  .03849
                  .03707
                  .03573
                  .03446
                  .03326
                  .03213
                  .03105
                  .03004
                  .02907

                  33
                  .04269
                  .04111
                  .03961
                  .03819
                  .03685
                  .03558
                  .03438
                  .03325
                  .03217
                  .03115

                  34
                  .04561
                  .04394
                  .04236
                  .04087
                  .03946
                  .03812
                  .03685
                  .03565
                  .03451
                  .03342

                  35
                  .04877
                  .04702
                  .04535
                  .04378
                  .04229
                  .04087
                  .03953
                  .03826
                  .03706
                  .03591

                  36
                  .05215
                  .05031
                  .04856
                  .04690
                  .04533
                  .04384
                  .04242
                  .04108
                  .03980
                  .03859

                  37
                  .05578
                  .05384
                  .05200
                  .05025
                  .04860
                  .04703
                  .04553
                  .04411
                  .04276
                  .04148

                  38
                  .05965
                  .05761
                  .05568
                  .05385
                  .05211
                  .05045
                  .04888
                  .04738
                  .04595
                  .04460

                  39
                  .06379
                  .06165
                  .05962
                  .05770
                  .05587
                  .05412
                  .05247
                  .05089
                  .04939
                  .04795

                  40
                  .06820
                  .06596
                  .06383
                  .06181
                  .05989
                  .05806
                  .05631
                  .05465
                  .05307
                  .05155

                  41
                  .07288
                  .07054
                  .06832
                  .06620
                  .06418
                  .06226
                  .06042
                  .05868
                  .05701
                  .05541

                  42
                  .07784
                  .07539
                  .07306
                  .07085
                  .06873
                  .06671
                  .06479
                  .06295
                  .06119
                  .05952

                  43
                  .08308
                  .08052
                  .07808
                  .07576
                  .07355
                  .07143
                  .06941
                  .06748
                  .06564
                  .06387

                  44
                  .08861
                  .08594
                  .08340
                  .08097
                  .07865
                  .07644
                  .07432
                  .07230
                  .07036
                  .06851

                  45
                  .09445
                  .09167
                  .08901
                  .08648
                  .08406
                  .08174
                  .07953
                  .07741
                  .07538
                  .07343

                  46
                  .10060
                  .09770
                  .09494
                  .09230
                  .08977
                  .08735
                  .08503
                  .08281
                  .08068
                  .07865

                  47
                  .10707
                  .10406
                  .10119
                  .09843
                  .09579
                  .09327
                  .09085
                  .08853
                  .08630
                  .08417

                  48
                  .11386
                  .11073
                  .10774
                  .10487
                  .10213
                  .09949
                  .09697
                  .09455
                  .09222
                  .08999

                  49
                  .12094
                  .11769
                  .11458
                  .11160
                  .10874
                  .10600
                  .10337
                  .10084
                  .09842
                  .09609

                  50
                  .12831
                  .12494
                  .12172
                  .11862
                  .11565
                  .11280
                  .11006
                  .10743
                  .10490
                  .10247

                  51
                  .13600
                  .13251
                  .12917
                  .12596
                  .12288
                  .11991
                  .11706
                  .11432
                  .11169
                  .10915

                  52
                  .14405
                  .14044
                  .13698
                  .13366
                  .13046
                  .12738
                  .12442
                  .12157
                  .11883
                  .11619

                  53
                  .15247
                  .14875
                  .14517
                  .14172
                  .13841
                  .13522
                  .13215
                  .12919
                  .12635
                  .12360

                  54
                  .16124
                  .15740
                  .15370
                  .15014
                  .14671
                  .14341
                  .14023
                  .13717
                  .13421
                  .13136

                  55
                  .17039
                  .16642
                  .16261
                  .15893
                  .15539
                  .15198
                  .14868
                  .14551
                  .14244
                  .13948

                  56
                  .17991
                  .17583
                  .17190
                  .16811
                  .16445
                  .16092
                  .15752
                  .15423
                  .15106
                  .14799

                  57
                  .18984
                  .18564
                  .18160
                  .17769
                  .17392
                  .17029
                  .16677
                  .16338
                  .16010
                  .15692

                  58
                  .20018
                  .19587
                  .19172
                  .18770
                  .18382
                  .18007
                  .17645
                  .17295
                  .16956
                  .16628

                  59
                  .21093
                  .20652
                  .20225
                  .19812
                  .19414
                  .19028
                  .18655
                  .18294
                  .17945
                  .17606

                  60
                  .22206
                  .21753
                  .21316
                  .20893
                  .20483
                  .20087
                  .19703
                  .19332
                  .18972
                  .18624

                  61
                  .23353
                  .22890
                  .22442
                  .22009
                  .21589
                  .21182
                  .20788
                  .20407
                  .20037
                  .19678

                  62
                  .24532
                  .24059
                  .23601
                  .23158
                  .22728
                  .22311
                  .21907
                  .21515
                  .21135
                  .20767

                  63
                  .25742
                  .25260
                  .24793
                  .24339
                  .23900
                  .23473
                  .23060
                  .22658
                  .22268
                  .21890

                  64
                  .26987
                  .26495
                  .26019
                  .25556
                  .25107
                  .24671
                  .24248
                  .23837
                  .23438
                  .23050

                  65
                  .28271
                  .27771
                  .27286
                  .26815
                  .26357
                  .25912
                  .25480
                  .25059
                  .24651
                  .24254

                  66
                  .29601
                  .29093
                  .28600
                  .28120
                  .27654
                  .27200
                  .26760
                  .26331
                  .25913
                  .25507

                  67
                  .30978
                  .30462
                  .29961
                  .29474
                  .29000
                  .28539
                  .28090
                  .27653
                  .27227
                  .26813

                  68
                  .32401
                  .31879
                  .31371
                  .30877
                  .30396
                  .29927
                  .29471
                  .29027
                  .28593
                  .28171

                  69
                  .33863
                  .33336
                  .32822
                  .32322
                  .31835
                  .31359
                  .30896
                  .30445
                  .30005
                  .29576

                  70
                  .35361
                  .34829
                  .34310
                  .33804
                  .33311
                  .32830
                  .32361
                  .31903
                  .31457
                  .31021

                  71
                  .36886
                  .36349
                  .35826
                  .35316
                  .34818
                  .34332
                  .33858
                  .33394
                  .32942
                  .32500

                  72
                  .38439
                  .37899
                  .37373
                  .36858
                  .36356
                  .35866
                  .35387
                  .34919
                  .34461
                  .34015

                  73
                  .40021
                  .39479
                  .38950
                  .38432
                  .37927
                  .37433
                  .36950
                  .36478
                  .36016
                  .35565

                  74
                  .41639
                  .41096
                  .40565
                  .40046
                  .39538
                  .39042
                  .38556
                  .38081
                  .37616
                  .37161

                  75
                  .43301
                  .42758
                  .42226
                  .41706
                  .41198
                  .40699
                  .40212
                  .39734
                  .39267
                  .38809

                  76
                  .45009
                  .44467
                  .43937
                  .43417
                  .42908
                  .42410
                  .41921
                  .41443
                  .40974
                  .40514

                  77
                  .46761
                  .46221
                  .45693
                  .45175
                  .44667
                  .44170
                  .43682
                  .43203
                  .42734
                  .42274

                  78
                  .48548
                  .48013
                  .47488
                  .46973
                  .46468
                  .45972
                  .45486
                  .45009
                  .44541
                  .44082

                  79
                  .50356
                  .49826
                  .49306
                  .48795
                  .48294
                  .47802
                  .47319
                  .46845
                  .46379
                  .45922

                  80
                  .52171
                  .51647
                  .51133
                  .50628
                  .50132
                  .49644
                  .49166
                  .48695
                  .48233
                  .47779

                  81
                  .53974
                  .53457
                  .52950
                  .52451
                  .51961
                  .51479
                  .51006
                  .50541
                  .50083
                  .49633

                  82
                  .55753
                  .55245
                  .54745
                  .54254
                  .53771
                  .53296
                  .52828
                  .52369
                  .51917
                  .51472

                  83
                  .57500
                  .57001
                  .56510
                  .56026
                  .55551
                  .55083
                  .54623
                  .54170
                  .53724
                  .53285

                  84
                  .59216
                  .58726
                  .58245
                  .57770
                  .57304
                  .56844
                  .56391
                  .55945
                  .55506
                  .55074

                  85
                  .60906
                  .60428
                  .59956
                  .59492
                  .59034
                  .58583
                  .58139
                  .57702
                  .57270
                  .56845

                  86
                  .62555
                  .62088
                  .61627
                  .61173
                  .60725
                  .60284
                  .59849
                  .59420
                  .58997
                  .58580

                  87
                  .64139
                  .63683
                  .63233
                  .62790
                  .62352
                  .61921
                  .61495
                  .61076
                  .60661
                  .60253

                  88
                  .65666
                  .65221
                  .64783
                  .64350
                  .63923
                  .63502
                  .63086
                  .62675
                  .62270
                  .61871

                  89
                  .67163
                  .66730
                  .66304
                  .65882
                  .65466
                  .65055
                  .64650
                  .64249
                  .63854
                  .63463

                  90
                  .68646
                  .68226
                  .67812
                  .67402
                  .66998
                  .66599
                  .66204
                  .65814
                  .65430
                  .65049

                  91
                  .70093
                  .69686
                  .69285
                  .68888
                  .68496
                  .68108
                  .67725
                  .67347
                  .66973
                  .66604

                  92
                  .71466
                  .71073
                  .70684
                  .70300
                  .69920
                  .69545
                  .69173
                  .68806
                  .68444
                  .68085

                  93
                  .72750
                  .72370
                  .71994
                  .71622
                  .71254
                  .70890
                  .70530
                  .70174
                  .69822
                  .69474

                  94
                  .73931
                  .73562
                  .73198
                  .72838
                  .72481
                  .72129
                  .71780
                  .71434
                  .71093
                  .70755

                  95
                  .75001
                  .74644
                  .74291
                  .73941
                  .73595
                  .73253
                  .72914
                  .72579
                  .72247
                  .71919

                  96
                  .75953
                  .75606
                  .75262
                  .74923
                  .74586
                  .74253
                  .73924
                  .73598
                  .73275
                  .72955

                  97
                  .76819
                  .76481
                  .76147
                  .75816
                  .75489
                  .75165
                  .74844
                  .74526
                  .74211
                  .73899

                  98
                  .77599
                  .77270
                  .76944
                  .76621
                  .76302
                  .75986
                  .75672
                  .75362
                  .75054
                  .74750

                  99
                  .78319
                  .77998
                  .77680
                  .77365
                  .77053
                  .76744
                  .76437
                  .76134
                  .75833
                  .75535

                  100
                  .78987
                  .78673
                  .78362
                  .78054
                  .77748
                  .77446
                  .77146
                  .76849
                  .76555
                  .76263

                  101
                  .79622
                  .79315
                  .79010
                  .78708
                  .78409
                  .78113
                  .77819
                  .77528
                  .77239
                  .76953

                  102
                  .80283
                  .79983
                  .79685
                  .79390
                  .79097
                  .78807
                  .78519
                  .78234
                  .77951
                  .77671

                  103
                  .80983
                  .80690
                  .80399
                  .80111
                  .79825
                  .79541
                  .79260
                  .78981
                  .78705
                  .78430

                  104
                  .81760
                  .81475
                  .81192
                  .80912
                  .80633
                  .80357
                  .80083
                  .79810
                  .79541
                  .79273

                  105
                  .82726
                  .82451
                  .82178
                  .81907
                  .81638
                  .81371
                  .81106
                  .80843
                  .80582
                  .80322

                  106
                  .84137
                  .83879
                  .83623
                  .83368
                  .83115
                  .82863
                  .82614
                  .82366
                  .82119
                  .81874

                  107
                  .86211
                  .85981
                  .85751
                  .85523
                  .85297
                  .85071
                  .84847
                  .84624
                  .84403
                  .84182

                  108
                  .89660
                  .89481
                  .89304
                  .89127
                  .88950
                  .88775
                  .88601
                  .88427
                  .88254
                  .88081

                  109
                  .95372
                  .95290
                  .95208
                  .95126
                  .95045
                  .94964
                  .94883
                  .94803
                  .94723
                  .94643

                Table S—Based on Life Table 80CNSMT Single Life Remainder Factors
                [Applicable After April 30, 1989, and Before May 1, 1999]

                  Age
                  Interest rate
                  12.2%
                  12.4%
                  12.6%
                  12.8%
                  13.0%
                  13.2%
                  13.4%
                  13.6%
                  13.8%
                  14.0%

                  0
                  .01683
                  .01669
                  .01655
                  .01642
                  .01630
                  .01618
                  .01607
                  .01596
                  .01586
                  .01576

                  1
                  .00559
                  .00544
                  .00531
                  .00518
                  .00506
                  .00494
                  .00484
                  .00473
                  .00464
                  .00454

                  2
                  .00528
                  .00513
                  .00499
                  .00485
                  .00473
                  .00461
                  .00449
                  .00439
                  .00428
                  .00419

                  3
                  .00524
                  .00508
                  .00493
                  .00479
                  .00465
                  .00453
                  .00441
                  .00429
                  .00419
                  .00408

                  4
                  .00536
                  .00519
                  .00503
                  .00488
                  .00473
                  .00460
                  .00447
                  .00435
                  .00423
                  .00412

                  5
                  .00558
                  .00540
                  .00523
                  .00507
                  .00492
                  .00477
                  .00464
                  .00451
                  .00439
                  .00427

                  6
                  .00588
                  .00569
                  .00550
                  .00533
                  .00517
                  .00502
                  .00487
                  .00473
                  .00460
                  .00448

                  7
                  .00624
                  .00604
                  .00584
                  .00566
                  .00549
                  .00532
                  .00517
                  .00502
                  .00488
                  .00475

                  8
                  .00668
                  .00646
                  .00626
                  .00606
                  .00588
                  .00570
                  .00554
                  .00538
                  .00523
                  .00509

                  9
                  .00722
                  .00699
                  .00677
                  .00656
                  .00636
                  .00617
                  .00600
                  .00583
                  .00567
                  .00552

                  10
                  .00785
                  .00761
                  .00737
                  .00715
                  .00694
                  .00674
                  .00655
                  .00637
                  .00620
                  .00604

                  11
                  .00861
                  .00835
                  .00810
                  .00786
                  .00764
                  .00743
                  .00723
                  .00704
                  .00686
                  .00668

                  12
                  .00946
                  .00918
                  .00891
                  .00866
                  .00843
                  .00820
                  .00799
                  .00779
                  .00760
                  .00741

                  13
                  .01035
                  .01006
                  .00978
                  .00951
                  .00927
                  .00903
                  .00880
                  .00859
                  .00839
                  .00819

                  14
                  .01122
                  .01091
                  .01061
                  .01034
                  .01007
                  .00982
                  .00958
                  .00936
                  .00914
                  .00894

                  15
                  .01203
                  .01171
                  .01140
                  .01110
                  .01082
                  .01056
                  .01031
                  .01007
                  .00985
                  .00963

                  16
                  .01279
                  .01244
                  .01211
                  .01181
                  .01151
                  .01123
                  .01097
                  .01072
                  .01048
                  .01025

                  17
                  .01347
                  .01311
                  .01276
                  .01244
                  .01213
                  .01184
                  .01156
                  .01130
                  .01104
                  .01081

                  18
                  .01411
                  .01373
                  .01336
                  .01302
                  .01270
                  .01239
                  .01210
                  .01182
                  .01155
                  .01130

                  19
                  .01474
                  .01434
                  .01396
                  .01359
                  .01325
                  .01293
                  .01262
                  .01233
                  .01205
                  .01178

                  20
                  .01537
                  .01494
                  .01454
                  .01415
                  .01379
                  .01345
                  .01313
                  .01282
                  .01252
                  .01224

                  21
                  .01598
                  .01553
                  .01510
                  .01470
                  .01432
                  .01396
                  .01361
                  .01329
                  .01298
                  .01268

                  22
                  .01660
                  .01613
                  .01568
                  .01525
                  .01485
                  .01446
                  .01410
                  .01375
                  .01343
                  .01312

                  23
                  .01725
                  .01674
                  .01627
                  .01581
                  .01539
                  .01498
                  .01460
                  .01423
                  .01388
                  .01355

                  24
                  .01796
                  .01742
                  .01692
                  .01644
                  .01599
                  .01556
                  .01515
                  .01476
                  .01439
                  .01404

                  25
                  .01876
                  .01819
                  .01765
                  .01714
                  .01666
                  .01621
                  .01577
                  .01536
                  .01497
                  .01460

                  26
                  .01967
                  .01907
                  .01850
                  .01796
                  .01745
                  .01696
                  .01650
                  .01606
                  .01565
                  .01525

                  27
                  .02072
                  .02008
                  .01948
                  .01890
                  .01836
                  .01784
                  .01735
                  .01688
                  .01644
                  .01601

                  28
                  .02190
                  .02122
                  .02057
                  .01996
                  .01938
                  .01883
                  .01831
                  .01781
                  .01734
                  .01689

                  29
                  .02322
                  .02249
                  .02181
                  .02116
                  .02054
                  .01996
                  .01940
                  .01887
                  .01836
                  .01788

                  30
                  .02469
                  .02392
                  .02319
                  .02250
                  .02184
                  .02122
                  .02062
                  .02006
                  .01952
                  .01900

                  31
                  .02634
                  .02552
                  .02475
                  .02401
                  .02331
                  .02264
                  .02201
                  .02140
                  .02083
                  .02028

                  32
                  .02816
                  .02729
                  .02647
                  .02568
                  .02494
                  .02423
                  .02355
                  .02291
                  .02229
                  .02170

                  33
                  .03018
                  .02926
                  .02838
                  .02755
                  .02675
                  .02600
                  .02528
                  .02459
                  .02393
                  .02331

                  34
                  .03239
                  .03142
                  .03048
                  .02960
                  .02875
                  .02795
                  .02718
                  .02645
                  .02575
                  .02508

                  35
                  .03482
                  .03378
                  .03279
                  .03185
                  .03095
                  .03009
                  .02928
                  .02850
                  .02775
                  .02704

                  36
                  .03743
                  .03633
                  .03528
                  .03428
                  .03333
                  .03242
                  .03155
                  .03072
                  .02992
                  .02916

                  37
                  .04026
                  .03909
                  .03798
                  .03692
                  .03591
                  .03494
                  .03401
                  .03313
                  .03228
                  .03147

                  38
                  .04330
                  .04207
                  .04089
                  .03977
                  .03869
                  .03767
                  .03668
                  .03574
                  .03484
                  .03398

                  39
                  .04658
                  .04528
                  .04403
                  .04284
                  .04170
                  .04061
                  .03957
                  .03857
                  .03762
                  .03670

                  40
                  .05011
                  .04873
                  .04741
                  .04615
                  .04495
                  .04379
                  .04269
                  .04163
                  .04061
                  .03964

                  41
                  .05389
                  .05244
                  .05104
                  .04971
                  .04844
                  .04721
                  .04604
                  .04492
                  .04384
                  .04281

                  42
                  .05791
                  .05638
                  .05491
                  .05350
                  .05216
                  .05086
                  .04962
                  .04844
                  .04729
                  .04620

                  43
                  .06219
                  .06057
                  .05902
                  .05754
                  .05612
                  .05475
                  .05344
                  .05218
                  .05098
                  .04981

                  44
                  .06673
                  .06503
                  .06340
                  .06184
                  .06034
                  .05890
                  .05752
                  .05619
                  .05491
                  .05368

                  45
                  .07157
                  .06978
                  .06806
                  .06642
                  .06484
                  .06332
                  .06186
                  .06046
                  .05911
                  .05781

                  46
                  .07669
                  .07481
                  .07301
                  .07128
                  .06962
                  .06802
                  .06649
                  .06501
                  .06358
                  .06221

                  47
                  .08212
                  .08015
                  .07826
                  .07645
                  .07470
                  .07302
                  .07140
                  .06984
                  .06834
                  .06690

                  48
                  .08784
                  .08578
                  .08380
                  .08190
                  .08006
                  .07830
                  .07660
                  .07496
                  .07338
                  .07186

                  49
                  .09384
                  .09169
                  .08961
                  .08762
                  .08570
                  .08384
                  .08206
                  .08034
                  .07868
                  .07708

                  50
                  .10013
                  .09787
                  .09570
                  .09361
                  .09160
                  .08966
                  .08779
                  .08598
                  .08424
                  .08256

                  51
                  .10671
                  .10436
                  .10209
                  .09991
                  .09780
                  .09577
                  .09381
                  .09192
                  .09009
                  .08832

                  52
                  .11365
                  .11120
                  .10883
                  .10655
                  .10435
                  .10222
                  .10017
                  .09819
                  .09628
                  .09442

                  53
                  .12095
                  .11840
                  .11593
                  .11355
                  .11126
                  .10904
                  .10689
                  .10482
                  .10282
                  .10088

                  54
                  .12860
                  .12595
                  .12338
                  .12090
                  .11851
                  .11619
                  .11396
                  .11179
                  .10970
                  .10767

                  55
                  .13663
                  .13386
                  .13120
                  .12862
                  .12613
                  .12372
                  .12138
                  .11912
                  .11694
                  .11482

                  56
                  .14503
                  .14217
                  .13940
                  .13672
                  .13413
                  .13162
                  .12919
                  .12683
                  .12456
                  .12235

                  57
                  .15385
                  .15089
                  .14801
                  .14523
                  .14254
                  .13994
                  .13741
                  .13496
                  .13259
                  .13029

                  58
                  .16311
                  .16004
                  .15706
                  .15418
                  .15139
                  .14868
                  .14606
                  .14352
                  .14105
                  .13866

                  59
                  .17279
                  .16961
                  .16654
                  .16355
                  .16066
                  .15786
                  .15514
                  .15250
                  .14994
                  .14745

                  60
                  .18286
                  .17958
                  .17640
                  .17332
                  .17033
                  .16743
                  .16462
                  .16188
                  .15922
                  .15664

                  61
                  .19330
                  .18992
                  .18665
                  .18347
                  .18038
                  .17738
                  .17447
                  .17164
                  .16889
                  .16622

                  62
                  .20409
                  .20061
                  .19724
                  .19396
                  .19078
                  .18768
                  .18467
                  .18175
                  .17891
                  .17614

                  63
                  .21522
                  .21165
                  .20818
                  .20480
                  .20152
                  .19833
                  .19523
                  .19221
                  .18928
                  .18642

                  64
                  .22672
                  .22306
                  .21949
                  .21602
                  .21265
                  .20937
                  .20617
                  .20306
                  .20003
                  .19708

                  65
                  .23867
                  .23491
                  .23125
                  .22769
                  .22423
                  .22085
                  .21757
                  .21437
                  .21125
                  .20821

                  66
                  .25112
                  .24727
                  .24353
                  .23988
                  .23632
                  .23286
                  .22948
                  .22619
                  .22299
                  .21986

                  67
                  .26409
                  .26016
                  .25633
                  .25260
                  .24896
                  .24541
                  .24195
                  .23857
                  .23528
                  .23206

                  68
                  .27760
                  .27359
                  .26968
                  .26586
                  .26214
                  .25851
                  .25497
                  .25151
                  .24814
                  .24484

                  69
                  .29157
                  .28748
                  .28350
                  .27961
                  .27581
                  .27211
                  .26849
                  .26495
                  .26150
                  .25812

                  70
                  .30596
                  .30181
                  .29775
                  .29379
                  .28992
                  .28614
                  .28245
                  .27884
                  .27532
                  .27187

                  71
                  .32069
                  .31648
                  .31236
                  .30833
                  .30440
                  .30055
                  .29679
                  .29312
                  .28952
                  .28600

                  72
                  .33578
                  .33151
                  .32733
                  .32325
                  .31925
                  .31535
                  .31152
                  .30778
                  .30412
                  .30054

                  73
                  .35123
                  .34691
                  .34269
                  .33855
                  .33450
                  .33054
                  .32666
                  .32286
                  .31914
                  .31550

                  74
                  .36715
                  .36279
                  .35852
                  .35434
                  .35024
                  .34623
                  .34230
                  .33845
                  .33468
                  .33098

                  75
                  .38360
                  .37921
                  .37491
                  .37069
                  .36656
                  .36250
                  .35853
                  .35464
                  .35082
                  .34708

                  76
                  .40064
                  .39623
                  .39190
                  .38765
                  .38349
                  .37941
                  .37540
                  .37148
                  .36762
                  .36384

                  77
                  .41823
                  .41381
                  .40947
                  .40521
                  .40103
                  .39692
                  .39290
                  .38895
                  .38507
                  .38126

                  78
                  .43632
                  .43189
                  .42755
                  .42329
                  .41910
                  .41499
                  .41095
                  .40698
                  .40309
                  .39926

                  79
                  .45473
                  .45032
                  .44599
                  .44173
                  .43755
                  .43344
                  .42940
                  .42543
                  .42153
                  .41770

                  80
                  .47333
                  .46894
                  .46463
                  .46040
                  .45623
                  .45213
                  .44811
                  .44414
                  .44025
                  .43642

                  81
                  .49191
                  .48755
                  .48328
                  .47907
                  .47493
                  .47085
                  .46684
                  .46290
                  .45902
                  .45520

                  82
                  .51034
                  .50603
                  .50179
                  .49762
                  .49351
                  .48947
                  .48549
                  .48157
                  .47772
                  .47392

                  83
                  .52852
                  .52427
                  .52008
                  .51595
                  .51189
                  .50788
                  .50394
                  .50006
                  .49623
                  .49246

                  84
                  .54648
                  .54228
                  .53815
                  .53407
                  .53006
                  .52610
                  .52221
                  .51836
                  .51458
                  .51084

                  85
                  .56426
                  .56013
                  .55606
                  .55205
                  .54810
                  .54420
                  .54035
                  .53656
                  .53282
                  .52913

                  86
                  .58169
                  .57764
                  .57364
                  .56970
                  .56581
                  .56197
                  .55818
                  .55445
                  .55076
                  .54713

                  87
                  .59850
                  .59452
                  .59060
                  .58673
                  .58291
                  .57913
                  .57541
                  .57174
                  .56811
                  .56453

                  88
                  .61476
                  .61086
                  .60702
                  .60322
                  .59947
                  .59577
                  .59212
                  .58851
                  .58494
                  .58142

                  89
                  .63078
                  .62697
                  .62321
                  .61950
                  .61583
                  .61220
                  .60862
                  .60508
                  .60159
                  .59813

                  90
                  .64674
                  .64302
                  .63935
                  .63573
                  .63215
                  .62861
                  .62511
                  .62165
                  .61823
                  .61485

                  91
                  .66238
                  .65877
                  .65520
                  .65167
                  .64819
                  .64474
                  .64133
                  .63795
                  .63462
                  .63132

                  92
                  .67730
                  .67379
                  .67032
                  .66689
                  .66350
                  .66014
                  .65682
                  .65354
                  .65029
                  .64708

                  93
                  .69130
                  .68789
                  .68452
                  .68119
                  .67789
                  .67463
                  .67140
                  .66820
                  .66504
                  .66191

                  94
                  .70421
                  .70090
                  .69762
                  .69438
                  .69118
                  .68800
                  .68486
                  .68175
                  .67867
                  .67563

                  95
                  .71594
                  .71272
                  .70954
                  .70639
                  .70326
                  .70017
                  .69712
                  .69409
                  .69109
                  .68812

                  96
                  .72638
                  .72325
                  .72014
                  .71707
                  .71403
                  .71101
                  .70803
                  .70507
                  .70215
                  .69925

                  97
                  .73590
                  .73285
                  .72982
                  .72682
                  .72385
                  .72090
                  .71799
                  .71510
                  .71224
                  .70941

                  98
                  .74448
                  .74149
                  .73853
                  .73560
                  .73269
                  .72981
                  .72696
                  .72414
                  .72134
                  .71856

                  99
                  .75240
                  .74948
                  .74658
                  .74371
                  .74086
                  .73805
                  .73525
                  .73248
                  .72974
                  .72702

                  100
                  .75974
                  .75687
                  .75403
                  .75121
                  .74842
                  .74566
                  .74292
                  .74020
                  .73751
                  .73484

                  101
                  .76669
                  .76388
                  .76109
                  .75833
                  .75559
                  .75287
                  .75018
                  .74751
                  .74486
                  .74223

                  102
                  .77393
                  .77117
                  .76844
                  .76573
                  .76304
                  .76037
                  .75773
                  .75511
                  .75251
                  .74993

                  103
                  .78158
                  .77888
                  .77620
                  .77355
                  .77091
                  .76830
                  .76571
                  .76313
                  .76058
                  .75805

                  104
                  .79007
                  .78743
                  .78482
                  .78222
                  .77964
                  .77709
                  .77455
                  .77203
                  .76953
                  .76705

                  105
                  .80065
                  .79809
                  .79556
                  .79304
                  .79054
                  .78805
                  .78559
                  .78314
                  .78071
                  .77829

                  106
                  .81631
                  .81389
                  .81149
                  .80911
                  .80674
                  .80438
                  .80204
                  .79972
                  .79741
                  .79511

                  107
                  .83963
                  .83745
                  .83529
                  .83313
                  .83099
                  .82886
                  .82674
                  .82463
                  .82254
                  .82045

                  108
                  .87910
                  .87739
                  .87569
                  .87400
                  .87232
                  .87064
                  .86897
                  .86731
                  .86566
                  .86401

                  109
                  .94563
                  .94484
                  .94405
                  .94326
                  .94248
                  .94170
                  .94092
                  .94014
                  .93937
                  .93860

              (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)-6(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)-6(e)(4) apply for determining the highest yearly rate of return when the pooled income fund has been in existence less than 3 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)-6(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]

                  Age
                  Interest rate
                  4.2%
                  4.4%
                  4.6%
                  4.8%
                  5.0%
                  5.2%
                  5.4%
                  5.6%
                  5.8%
                  6.0%

                  0
                  .06752
                  .06130
                  .05586
                  .05109
                  .04691
                  .04322
                  .03998
                  .03711
                  .03458
                  .03233

                  1
                  .06137
                  .05495
                  .04932
                  .04438
                  .04003
                  .03620
                  .03283
                  .02985
                  .02721
                  .02487

                  2
                  .06325
                  .05667
                  .05088
                  .04580
                  .04132
                  .03737
                  .03388
                  .03079
                  .02806
                  .02563

                  3
                  .06545
                  .05869
                  .05275
                  .04752
                  .04291
                  .03883
                  .03523
                  .03203
                  .02920
                  .02668

                  4
                  .06784
                  .06092
                  .05482
                  .04944
                  .04469
                  .04048
                  .03676
                  .03346
                  .03052
                  .02791

                  5
                  .07040
                  .06331
                  .05705
                  .05152
                  .04662
                  .04229
                  .03845
                  .03503
                  .03199
                  .02928

                  6
                  .07310
                  .06583
                  .05941
                  .05372
                  .04869
                  .04422
                  .04025
                  .03672
                  .03357
                  .03076

                  7
                  .07594
                  .06849
                  .06191
                  .05607
                  .05089
                  .04628
                  .04219
                  .03854
                  .03528
                  .03236

                  8
                  .07891
                  .07129
                  .06453
                  .05853
                  .05321
                  .04846
                  .04424
                  .04046
                  .03709
                  .03407

                  9
                  .08203
                  .07423
                  .06731
                  .06115
                  .05567
                  .05079
                  .04643
                  .04253
                  .03904
                  .03592

                  10
                  .08532
                  .07734
                  .07024
                  .06392
                  .05829
                  .05326
                  .04877
                  .04474
                  .04114
                  .03790

                  11
                  .08875
                  .08059
                  .07331
                  .06683
                  .06104
                  .05587
                  .05124
                  .04709
                  .04336
                  .04002

                  12
                  .09233
                  .08398
                  .07653
                  .06989
                  .06394
                  .05862
                  .05385
                  .04957
                  .04572
                  .04226

                  13
                  .09601
                  .08748
                  .07985
                  .07304
                  .06693
                  .06146
                  .05655
                  .05214
                  .04816
                  .04458

                  14
                  .09974
                  .09102
                  .08322
                  .07624
                  .06997
                  .06435
                  .05929
                  .05474
                  .05064
                  .04694

                  15
                  .10350
                  .09460
                  .08661
                  .07946
                  .07303
                  .06725
                  .06204
                  .05735
                  .05312
                  .04930

                  16
                  .10728
                  .09818
                  .09001
                  .08268
                  .07608
                  .07014
                  .06479
                  .05996
                  .05559
                  .05164

                  17
                  .11108
                  .10179
                  .09344
                  .08592
                  .07916
                  .07306
                  .06755
                  .06257
                  .05807
                  .05399

                  18
                  .11494
                  .10545
                  .09691
                  .08921
                  .08227
                  .07601
                  .07034
                  .06521
                  .06057
                  .05636

                  19
                  .11889
                  .10921
                  .10047
                  .09259
                  .08548
                  .07904
                  .07322
                  .06794
                  .06315
                  .05880

                  20
                  .12298
                  .11310
                  .10417
                  .09610
                  .08881
                  .08220
                  .07622
                  .07078
                  .06584
                  .06135

                  21
                  .12722
                  .11713
                  .10801
                  .09976
                  .09228
                  .08550
                  .07935
                  .07375
                  .06866
                  .06403

                  22
                  .13159
                  .12130
                  .11199
                  .10354
                  .09588
                  .08893
                  .08260
                  .07685
                  .07160
                  .06682

                  23
                  .13613
                  .12563
                  .11612
                  .10748
                  .09964
                  .09250
                  .08601
                  .08009
                  .07468
                  .06975

                  24
                  .14084
                  .13014
                  .12043
                  .11160
                  .10357
                  .09625
                  .08958
                  .08349
                  .07793
                  .07284

                  25
                  .14574
                  .13484
                  .12493
                  .11591
                  .10768
                  .10018
                  .09334
                  .08708
                  .08135
                  .07611

                  26
                  .15084
                  .13974
                  .12963
                  .12041
                  .11199
                  .10431
                  .09728
                  .09085
                  .08496
                  .07956

                  27
                  .15615
                  .14485
                  .13454
                  .12513
                  .11652
                  .10865
                  .10144
                  .09484
                  .08878
                  .08322

                  28
                  .16166
                  .15016
                  .13965
                  .13004
                  .12124
                  .11319
                  .10580
                  .09901
                  .09279
                  .08706

                  29
                  .16737
                  .15567
                  .14497
                  .13516
                  .12617
                  .11792
                  .11035
                  .10339
                  .09699
                  .09109

                  30
                  .17328
                  .16138
                  .15048
                  .14047
                  .13129
                  .12286
                  .11510
                  .10796
                  .10138
                  .09532

                  31
                  .17938
                  .16728
                  .15618
                  .14599
                  .13661
                  .12799
                  .12004
                  .11272
                  .10597
                  .09974

                  32
                  .18568
                  .17339
                  .16210
                  .15171
                  .14214
                  .13333
                  .12520
                  .11769
                  .11076
                  .10435

                  33
                  .19220
                  .17972
                  .16824
                  .15766
                  .14790
                  .13889
                  .13058
                  .12289
                  .11578
                  .10920

                  34
                  .19894
                  .18627
                  .17460
                  .16383
                  .15388
                  .14468
                  .13618
                  .12831
                  .12102
                  .11426

                  35
                  .20592
                  .19307
                  .18121
                  .17025
                  .16011
                  .15073
                  .14204
                  .13399
                  .12652
                  .11958

                  36
                  .21312
                  .20010
                  .18805
                  .17691
                  .16658
                  .15701
                  .14814
                  .13990
                  .13225
                  .12514

                  37
                  .22057
                  .20737
                  .19514
                  .18382
                  .17331
                  .16356
                  .15450
                  .14608
                  .13825
                  .13096

                  38
                  .22827
                  .21490
                  .20251
                  .19100
                  .18031
                  .17038
                  .16113
                  .15253
                  .14452
                  .13705

                  39
                  .23623
                  .22270
                  .21013
                  .19845
                  .18759
                  .17747
                  .16805
                  .15927
                  .15108
                  .14344

                  40
                  .24446
                  .23078
                  .21805
                  .20620
                  .19516
                  .18487
                  .17527
                  .16631
                  .15795
                  .15013

                  41
                  .25298
                  .23915
                  .22626
                  .21425
                  .20305
                  .19259
                  .18282
                  .17368
                  .16514
                  .15715

                  42
                  .26178
                  .24782
                  .23478
                  .22262
                  .21125
                  .20062
                  .19069
                  .18138
                  .17267
                  .16450

                  43
                  .27087
                  .25678
                  .24360
                  .23129
                  .21977
                  .20898
                  .19888
                  .18941
                  .18053
                  .17220

                  44
                  .28025
                  .26603
                  .25273
                  .24027
                  .22860
                  .21766
                  .20740
                  .19777
                  .18873
                  .18023

                  45
                  .28987
                  .27555
                  .26212
                  .24953
                  .23772
                  .22664
                  .21622
                  .20644
                  .19724
                  .18858

                  46
                  .29976
                  .28533
                  .27179
                  .25908
                  .24714
                  .23591
                  .22536
                  .21542
                  .20606
                  .19725

                  47
                  .30987
                  .29535
                  .28171
                  .26889
                  .25682
                  .24546
                  .23476
                  .22468
                  .21518
                  .20621

                  48
                  .32023
                  .30563
                  .29190
                  .27897
                  .26678
                  .25530
                  .24447
                  .23425
                  .22460
                  .21549

                  49
                  .33082
                  .31615
                  .30234
                  .28931
                  .27702
                  .26543
                  .25447
                  .24412
                  .23434
                  .22509

                  50
                  .34166
                  .32694
                  .31306
                  .29995
                  .28756
                  .27586
                  .26479
                  .25432
                  .24441
                  .23502

                  51
                  .35274
                  .33798
                  .32404
                  .31085
                  .29838
                  .28658
                  .27541
                  .26482
                  .25479
                  .24528

                  52
                  .36402
                  .34924
                  .33525
                  .32200
                  .30946
                  .29757
                  .28630
                  .27561
                  .26547
                  .25584

                  53
                  .37550
                  .36070
                  .34668
                  .33339
                  .32078
                  .30882
                  .29746
                  .28667
                  .27643
                  .26669

                  54
                  .38717
                  .37237
                  .35833
                  .34500
                  .33234
                  .32031
                  .30888
                  .29801
                  .28766
                  .27782

                  55
                  .39903
                  .38424
                  .37019
                  .35683
                  .34413
                  .33205
                  .32056
                  .30961
                  .29918
                  .28925

                  56
                  .41108
                  .39631
                  .38227
                  .36890
                  .35617
                  .34405
                  .33250
                  .32149
                  .31099
                  .30097

                  57
                  .42330
                  .40857
                  .39455
                  .38118
                  .36844
                  .35629
                  .34469
                  .33363
                  .32306
                  .31297

                  58
                  .43566
                  .42098
                  .40699
                  .39364
                  .38089
                  .36873
                  .35710
                  .34600
                  .33538
                  .32522

                  59
                  .44811
                  .43351
                  .41956
                  .40623
                  .39350
                  .38133
                  .36968
                  .35855
                  .34789
                  .33768

                  60
                  .46066
                  .44613
                  .43224
                  .41896
                  .40624
                  .39408
                  .38243
                  .37127
                  .36058
                  .35033

                  61
                  .47330
                  .45887
                  .44505
                  .43182
                  .41914
                  .40699
                  .39535
                  .38418
                  .37347
                  .36318

                  62
                  .48608
                  .47175
                  .45802
                  .44485
                  .43223
                  .42011
                  .40848
                  .39732
                  .38660
                  .37629

                  63
                  .49898
                  .48478
                  .47115
                  .45807
                  .44550
                  .43343
                  .42184
                  .41069
                  .39997
                  .38966

                  64
                  .51200
                  .49793
                  .48442
                  .47143
                  .45895
                  .44694
                  .43539
                  .42427
                  .41357
                  .40326

                  65
                  .52512
                  .51121
                  .49782
                  .48495
                  .47255
                  .46062
                  .44912
                  .43805
                  .42738
                  .41709

                  66
                  .53835
                  .52461
                  .51137
                  .49862
                  .48634
                  .47449
                  .46307
                  .45206
                  .44143
                  .43118

                  67
                  .55174
                  .53818
                  .52511
                  .51250
                  .50034
                  .48860
                  .47727
                  .46633
                  .45576
                  .44556

                  68
                  .56524
                  .55188
                  .53899
                  .52654
                  .51452
                  .50291
                  .49168
                  .48083
                  .47034
                  .46020

                  69
                  .57882
                  .56568
                  .55299
                  .54071
                  .52885
                  .51737
                  .50627
                  .49552
                  .48513
                  .47506

                  70
                  .59242
                  .57951
                  .56703
                  .55495
                  .54325
                  .53193
                  .52096
                  .51034
                  .50004
                  .49007

                  71
                  .60598
                  .59332
                  .58106
                  .56918
                  .55767
                  .54651
                  .53569
                  .52520
                  .51503
                  .50516

                  72
                  .61948
                  .60707
                  .59504
                  .58338
                  .57206
                  .56108
                  .55043
                  .54009
                  .53004
                  .52029

                  73
                  .63287
                  .62073
                  .60895
                  .59751
                  .58640
                  .57561
                  .56513
                  .55495
                  .54505
                  .53543

                  74
                  .64621
                  .63435
                  .62282
                  .61162
                  .60073
                  .59015
                  .57985
                  .56984
                  .56009
                  .55061

                  75
                  .65953
                  .64796
                  .63671
                  .62575
                  .61510
                  .60473
                  .59463
                  .58480
                  .57523
                  .56591

                  76
                  .67287
                  .66160
                  .65063
                  .63995
                  .62954
                  .61940
                  .60952
                  .59989
                  .59050
                  .58135

                  77
                  .68622
                  .67526
                  .66459
                  .65419
                  .64404
                  .63415
                  .62450
                  .61509
                  .60590
                  .59694

                  78
                  .69954
                  .68892
                  .67856
                  .66845
                  .65858
                  .64895
                  .63955
                  .63036
                  .62140
                  .61264

                  79
                  .71278
                  .70250
                  .69246
                  .68265
                  .67308
                  .66372
                  .65457
                  .64563
                  .63690
                  .62836

                  80
                  .72581
                  .71588
                  .70618
                  .69668
                  .68740
                  .67833
                  .66945
                  .66077
                  .65227
                  .64396

                  81
                  .73857
                  .72899
                  .71962
                  .71045
                  .70147
                  .69268
                  .68408
                  .67566
                  .66741
                  .65933

                  82
                  .75101
                  .74178
                  .73274
                  .72389
                  .71522
                  .70672
                  .69840
                  .69024
                  .68225
                  .67441

                  83
                  .76311
                  .75423
                  .74553
                  .73700
                  .72864
                  .72044
                  .71240
                  .70451
                  .69678
                  .68919

                  84
                  .77497
                  .76645
                  .75809
                  .74988
                  .74183
                  .73393
                  .72618
                  .71857
                  .71110
                  .70377

                  85
                  .78665
                  .77848
                  .77047
                  .76260
                  .75487
                  .74728
                  .73982
                  .73250
                  .72530
                  .71823

                  86
                  .79805
                  .79025
                  .78258
                  .77504
                  .76764
                  .76036
                  .75320
                  .74617
                  .73925
                  .73245

                  87
                  .80904
                  .80159
                  .79427
                  .78706
                  .77998
                  .77301
                  .76615
                  .75940
                  .75277
                  .74624

                  88
                  .81962
                  .81251
                  .80552
                  .79865
                  .79188
                  .78521
                  .77865
                  .77220
                  .76584
                  .75958

                  89
                  .82978
                  .82302
                  .81636
                  .80980
                  .80335
                  .79699
                  .79072
                  .78455
                  .77847
                  .77248

                  90
                  .83952
                  .83309
                  .82676
                  .82052
                  .81437
                  .80831
                  .80234
                  .79645
                  .79064
                  .78492

                  91
                  .84870
                  .84260
                  .83658
                  .83064
                  .82479
                  .81902
                  .81332
                  .80771
                  .80217
                  .79671

                  92
                  .85716
                  .85136
                  .84563
                  .83998
                  .83441
                  .82891
                  .82348
                  .81812
                  .81283
                  .80761

                  93
                  .86494
                  .85942
                  .85396
                  .84858
                  .84326
                  .83801
                  .83283
                  .82771
                  .82266
                  .81767

                  94
                  .87216
                  .86690
                  .86170
                  .85657
                  .85149
                  .84648
                  .84153
                  .83664
                  .83181
                  .82704

                  95
                  .87898
                  .87397
                  .86902
                  .86412
                  .85928
                  .85450
                  .84977
                  .84510
                  .84049
                  .83592

                  96
                  .88537
                  .88060
                  .87587
                  .87121
                  .86659
                  .86203
                  .85751
                  .85305
                  .84864
                  .84427

                  97
                  .89127
                  .88672
                  .88221
                  .87775
                  .87335
                  .86898
                  .86467
                  .86040
                  .85618
                  .85200

                  98
                  .89680
                  .89245
                  .88815
                  .88389
                  .87968
                  .87551
                  .87138
                  .86730
                  .86326
                  .85926

                  99
                  .90217
                  .89803
                  .89393
                  .88987
                  .88585
                  .88187
                  .87793
                  .87402
                  .87016
                  .86633

                  100
                  .90738
                  .90344
                  .89953
                  .89567
                  .89183
                  .88804
                  .88428
                  .88056
                  .87687
                  .87322

                  101
                  .91250
                  .90876
                  .90504
                  .90137
                  .89772
                  .89412
                  .89054
                  .88699
                  .88348
                  .88000

                  102
                  .91751
                  .91396
                  .91045
                  .90696
                  .90350
                  .90007
                  .89668
                  .89331
                  .88997
                  .88666

                  103
                  .92247
                  .91912
                  .91579
                  .91249
                  .90922
                  .90598
                  .90276
                  .89957
                  .89640
                  .89326

                  104
                  .92775
                  .92460
                  .92148
                  .91839
                  .91532
                  .91227
                  .90924
                  .90624
                  .90326
                  .90031

                  105
                  .93290
                  .92996
                  .92704
                  .92415
                  .92127
                  .91841
                  .91558
                  .91276
                  .90997
                  .90719

                  106
                  .93948
                  .93680
                  .93415
                  .93151
                  .92889
                  .92628
                  .92370
                  .92113
                  .91857
                  .91604

                  107
                  .94739
                  .94504
                  .94271
                  .94039
                  .93808
                  .93579
                  .93351
                  .93124
                  .92899
                  .92675

                  108
                  .95950
                  .95767
                  .95585
                  .95404
                  .95224
                  .95045
                  .94867
                  .94689
                  .94512
                  .94336

                  109
                  .97985
                  .97893
                  .97801
                  .97710
                  .97619
                  .97529
                  .97438
                  .97348
                  .97259
                  .97170

                Table S—Based on Life Table 90CM Single Life Remainder Factors
                [Applicable After April 30, 1999, and Before May 1, 2009]

                  Age
                  Interest rate
                  6.2%
                  6.4%
                  6.6%
                  6.8%
                  7.0%
                  7.2%
                  7.4%
                  7.6%
                  7.8%
                  8.0%

                  0
                  .03034
                  .02857
                  .02700
                  .02559
                  .02433
                  .02321
                  .02220
                  .02129
                  .02047
                  .01973

                  1
                  .02279
                  .02094
                  .01929
                  .01782
                  .01650
                  .01533
                  .01427
                  .01331
                  .01246
                  .01168

                  2
                  .02347
                  .02155
                  .01983
                  .01829
                  .01692
                  .01569
                  .01458
                  .01358
                  .01268
                  .01187

                  3
                  .02444
                  .02243
                  .02065
                  .01905
                  .01761
                  .01632
                  .01516
                  .01412
                  .01317
                  .01232

                  4
                  .02558
                  .02349
                  .02163
                  .01996
                  .01846
                  .01712
                  .01590
                  .01481
                  .01382
                  .01292

                  5
                  .02686
                  .02469
                  .02275
                  .02101
                  .01945
                  .01804
                  .01677
                  .01562
                  .01458
                  .01364

                  6
                  .02825
                  .02600
                  .02398
                  .02217
                  .02053
                  .01906
                  .01773
                  .01653
                  .01544
                  .01445

                  7
                  .02976
                  .02742
                  .02532
                  .02343
                  .02172
                  .02019
                  .01880
                  .01754
                  .01640
                  .01536

                  8
                  .03137
                  .02894
                  .02675
                  .02479
                  .02301
                  .02140
                  .01995
                  .01864
                  .01744
                  .01635

                  9
                  .03311
                  .03059
                  .02832
                  .02627
                  .02442
                  .02274
                  .02122
                  .01985
                  .01859
                  .01745

                  10
                  .03499
                  .03237
                  .03001
                  .02788
                  .02595
                  .02420
                  .02262
                  .02118
                  .01987
                  .01867

                  11
                  .03700
                  .03428
                  .03183
                  .02961
                  .02760
                  .02578
                  .02413
                  .02262
                  .02125
                  .02000

                  12
                  .03913
                  .03632
                  .03377
                  .03146
                  .02937
                  .02748
                  .02575
                  .02418
                  .02275
                  .02144

                  13
                  .04135
                  .03843
                  .03579
                  .03339
                  .03122
                  .02924
                  .02744
                  .02580
                  .02431
                  .02294

                  14
                  .04359
                  .04057
                  .03783
                  .03534
                  .03308
                  .03102
                  .02915
                  .02744
                  .02587
                  .02444

                  15
                  .04584
                  .04270
                  .03986
                  .03728
                  .03493
                  .03279
                  .03083
                  .02905
                  .02742
                  .02593

                  16
                  .04806
                  .04482
                  .04187
                  .03919
                  .03674
                  .03452
                  .03248
                  .03063
                  .02892
                  .02736

                  17
                  .05029
                  .04692
                  .04387
                  .04108
                  .03855
                  .03623
                  .03411
                  .03218
                  .03040
                  .02877

                  18
                  .05253
                  .04905
                  .04588
                  .04299
                  .04036
                  .03795
                  .03574
                  .03373
                  .03187
                  .03017

                  19
                  .05484
                  .05124
                  .04796
                  .04496
                  .04222
                  .03972
                  .03742
                  .03532
                  .03339
                  .03161

                  20
                  .05726
                  .05354
                  .05013
                  .04702
                  .04418
                  .04158
                  .03919
                  .03700
                  .03498
                  .03313

                  21
                  .05980
                  .05595
                  .05242
                  .04920
                  .04625
                  .04354
                  .04105
                  .03877
                  .03667
                  .03473

                  22
                  .06246
                  .05847
                  .05482
                  .05147
                  .04841
                  .04559
                  .04301
                  .04063
                  .03844
                  .03642

                  23
                  .06524
                  .06112
                  .05734
                  .05387
                  .05069
                  .04777
                  .04508
                  .04260
                  .04032
                  .03821

                  24
                  .06819
                  .06392
                  .06001
                  .05642
                  .05312
                  .05008
                  .04728
                  .04470
                  .04232
                  .04012

                  25
                  .07131
                  .06690
                  .06285
                  .05913
                  .05570
                  .05255
                  .04964
                  .04695
                  .04447
                  .04218

                  26
                  .07460
                  .07005
                  .06586
                  .06200
                  .05845
                  .05518
                  .05215
                  .04936
                  .04677
                  .04438

                  27
                  .07810
                  .07340
                  .06907
                  .06508
                  .06140
                  .05800
                  .05485
                  .05195
                  .04925
                  .04676

                  28
                  .08179
                  .07693
                  .07246
                  .06833
                  .06451
                  .06098
                  .05772
                  .05469
                  .05189
                  .04929

                  29
                  .08566
                  .08065
                  .07603
                  .07176
                  .06780
                  .06414
                  .06075
                  .05761
                  .05469
                  .05198

                  30
                  .08973
                  .08456
                  .07978
                  .07536
                  .07127
                  .06748
                  .06396
                  .06069
                  .05766
                  .05483

                  31
                  .09398
                  .08865
                  .08372
                  .07915
                  .07491
                  .07098
                  .06733
                  .06394
                  .06078
                  .05785

                  32
                  .09843
                  .09294
                  .08785
                  .08313
                  .07875
                  .07468
                  .07089
                  .06737
                  .06409
                  .06103

                  33
                  .10310
                  .09745
                  .09220
                  .08732
                  .08279
                  .07858
                  .07466
                  .07100
                  .06759
                  .06441

                  34
                  .10799
                  .10217
                  .09676
                  .09173
                  .08705
                  .08269
                  .07862
                  .07483
                  .07129
                  .06798

                  35
                  .11314
                  .10715
                  .10157
                  .09638
                  .09155
                  .08704
                  .08283
                  .07890
                  .07522
                  .07179

                  36
                  .11852
                  .11236
                  .10662
                  .10127
                  .09628
                  .09162
                  .08726
                  .08319
                  .07938
                  .07581

                  37
                  .12416
                  .11783
                  .11193
                  .10641
                  .10126
                  .09645
                  .09194
                  .08772
                  .08377
                  .08006

                  38
                  .13009
                  .12359
                  .11751
                  .11183
                  .10652
                  .10155
                  .09689
                  .09253
                  .08843
                  .08459

                  39
                  .13629
                  .12962
                  .12338
                  .11753
                  .11206
                  .10693
                  .10212
                  .09761
                  .09337
                  .08938

                  40
                  .14281
                  .13597
                  .12955
                  .12355
                  .11791
                  .11262
                  .10766
                  .10299
                  .09860
                  .09447

                  41
                  .14966
                  .14264
                  .13606
                  .12989
                  .12409
                  .11864
                  .11352
                  .10870
                  .10417
                  .09989

                  42
                  .15685
                  .14966
                  .14291
                  .13657
                  .13061
                  .12500
                  .11972
                  .11475
                  .11006
                  .10564

                  43
                  .16437
                  .15702
                  .15010
                  .14360
                  .13747
                  .13171
                  .12627
                  .12115
                  .11631
                  .11174

                  44
                  .17224
                  .16472
                  .15764
                  .15098
                  .14469
                  .13876
                  .13317
                  .12789
                  .12290
                  .11819

                  45
                  .18042
                  .17274
                  .16550
                  .15867
                  .15223
                  .14615
                  .14040
                  .13496
                  .12982
                  .12496

                  46
                  .18893
                  .18110
                  .17370
                  .16671
                  .16011
                  .15387
                  .14796
                  .14238
                  .13708
                  .13207

                  47
                  .19775
                  .18975
                  .18220
                  .17505
                  .16830
                  .16190
                  .15584
                  .15010
                  .14466
                  .13950

                  48
                  .20688
                  .19873
                  .19102
                  .18373
                  .17682
                  .17027
                  .16406
                  .15817
                  .15258
                  .14727

                  49
                  .21633
                  .20804
                  .20018
                  .19274
                  .18568
                  .17898
                  .17262
                  .16658
                  .16084
                  .15539

                  50
                  .22612
                  .21769
                  .20969
                  .20210
                  .19490
                  .18805
                  .18155
                  .17536
                  .16948
                  .16388

                  51
                  .23625
                  .22769
                  .21955
                  .21182
                  .20448
                  .19749
                  .19084
                  .18452
                  .17849
                  .17275

                  52
                  .24669
                  .23799
                  .22973
                  .22186
                  .21438
                  .20726
                  .20047
                  .19400
                  .18784
                  .18196

                  53
                  .25742
                  .24861
                  .24022
                  .23222
                  .22461
                  .21735
                  .21043
                  .20383
                  .19753
                  .19151

                  54
                  .26845
                  .25952
                  .25101
                  .24290
                  .23516
                  .22777
                  .22072
                  .21399
                  .20756
                  .20140

                  55
                  .27978
                  .27074
                  .26212
                  .25389
                  .24604
                  .23853
                  .23136
                  .22450
                  .21793
                  .21166

                  56
                  .29140
                  .28227
                  .27355
                  .26522
                  .25725
                  .24963
                  .24233
                  .23535
                  .22867
                  .22227

                  57
                  .30333
                  .29411
                  .28529
                  .27686
                  .26879
                  .26106
                  .25365
                  .24656
                  .23976
                  .23324

                  58
                  .31551
                  .30621
                  .29731
                  .28878
                  .28061
                  .27278
                  .26528
                  .25807
                  .25116
                  .24453

                  59
                  .32790
                  .31854
                  .30956
                  .30095
                  .29269
                  .28477
                  .27716
                  .26986
                  .26284
                  .25610

                  60
                  .34050
                  .33107
                  .32202
                  .31334
                  .30500
                  .29699
                  .28929
                  .28190
                  .27478
                  .26794

                  61
                  .35331
                  .34384
                  .33473
                  .32598
                  .31757
                  .30948
                  .30170
                  .29422
                  .28701
                  .28007

                  62
                  .36639
                  .35688
                  .34772
                  .33892
                  .33044
                  .32229
                  .31443
                  .30687
                  .29958
                  .29255

                  63
                  .37974
                  .37020
                  .36101
                  .35216
                  .34363
                  .33542
                  .32750
                  .31986
                  .31250
                  .30539

                  64
                  .39334
                  .38378
                  .37456
                  .36568
                  .35711
                  .34884
                  .34087
                  .33317
                  .32574
                  .31857

                  65
                  .40718
                  .39761
                  .38838
                  .37947
                  .37087
                  .36257
                  .35455
                  .34681
                  .33932
                  .33208

                  66
                  .42128
                  .41172
                  .40249
                  .39357
                  .38496
                  .37663
                  .36858
                  .36079
                  .35326
                  .34597

                  67
                  .43569
                  .42616
                  .41694
                  .40803
                  .39941
                  .39107
                  .38299
                  .37518
                  .36761
                  .36028

                  68
                  .45038
                  .44089
                  .43170
                  .42281
                  .41419
                  .40585
                  .39777
                  .38994
                  .38235
                  .37499

                  69
                  .46531
                  .45587
                  .44672
                  .43786
                  .42927
                  .42094
                  .41286
                  .40503
                  .39743
                  .39006

                  70
                  .48040
                  .47103
                  .46194
                  .45312
                  .44456
                  .43626
                  .42820
                  .42038
                  .41278
                  .40540

                  71
                  .49558
                  .48629
                  .47727
                  .46851
                  .46000
                  .45174
                  .44371
                  .43591
                  .42832
                  .42095

                  72
                  .51082
                  .50162
                  .49268
                  .48399
                  .47554
                  .46733
                  .45934
                  .45157
                  .44401
                  .43666

                  73
                  .52607
                  .51697
                  .50813
                  .49952
                  .49114
                  .48299
                  .47506
                  .46733
                  .45981
                  .45249

                  74
                  .54139
                  .53241
                  .52367
                  .51515
                  .50686
                  .49879
                  .49092
                  .48325
                  .47578
                  .46849

                  75
                  .55683
                  .54798
                  .53936
                  .53095
                  .52276
                  .51477
                  .50698
                  .49938
                  .49197
                  .48474

                  76
                  .57243
                  .56373
                  .55524
                  .54696
                  .53888
                  .53100
                  .52330
                  .51579
                  .50846
                  .50130

                  77
                  .58819
                  .57965
                  .57132
                  .56318
                  .55523
                  .54747
                  .53988
                  .53247
                  .52523
                  .51815

                  78
                  .60408
                  .59572
                  .58755
                  .57957
                  .57177
                  .56414
                  .55668
                  .54939
                  .54225
                  .53527

                  79
                  .62001
                  .61184
                  .60385
                  .59604
                  .58840
                  .58092
                  .57360
                  .56644
                  .55943
                  .55256

                  80
                  .63582
                  .62786
                  .62007
                  .61244
                  .60497
                  .59765
                  .59048
                  .58347
                  .57659
                  .56985

                  81
                  .65142
                  .64367
                  .63608
                  .62864
                  .62135
                  .61421
                  .60721
                  .60034
                  .59361
                  .58701

                  82
                  .66673
                  .65920
                  .65182
                  .64458
                  .63748
                  .63052
                  .62368
                  .61698
                  .61041
                  .60395

                  83
                  .68175
                  .67444
                  .66728
                  .66024
                  .65334
                  .64656
                  .63991
                  .63338
                  .62696
                  .62066

                  84
                  .69657
                  .68950
                  .68256
                  .67574
                  .66904
                  .66246
                  .65599
                  .64964
                  .64340
                  .63727

                  85
                  .71128
                  .70446
                  .69775
                  .69116
                  .68467
                  .67830
                  .67204
                  .66587
                  .65982
                  .65386

                  86
                  .72576
                  .71919
                  .71272
                  .70636
                  .70010
                  .69394
                  .68789
                  .68193
                  .67606
                  .67029

                  87
                  .73981
                  .73349
                  .72726
                  .72114
                  .71511
                  .70917
                  .70333
                  .69757
                  .69190
                  .68632

                  88
                  .75342
                  .74735
                  .74137
                  .73548
                  .72968
                  .72396
                  .71833
                  .71279
                  .70732
                  .70194

                  89
                  .76658
                  .76076
                  .75503
                  .74938
                  .74381
                  .73832
                  .73290
                  .72757
                  .72231
                  .71712

                  90
                  .77928
                  .77371
                  .76823
                  .76281
                  .75748
                  .75221
                  .74702
                  .74190
                  .73684
                  .73186

                  91
                  .79131
                  .78600
                  .78075
                  .77557
                  .77046
                  .76542
                  .76044
                  .75553
                  .75068
                  .74589

                  92
                  .80246
                  .79737
                  .79235
                  .78740
                  .78250
                  .77767
                  .77290
                  .76818
                  .76353
                  .75893

                  93
                  .81274
                  .80788
                  .80307
                  .79832
                  .79363
                  .78899
                  .78441
                  .77989
                  .77542
                  .77100

                  94
                  .82232
                  .81766
                  .81306
                  .80850
                  .80401
                  .79956
                  .79517
                  .79082
                  .78653
                  .78228

                  95
                  .83141
                  .82695
                  .82254
                  .81818
                  .81387
                  .80961
                  .80539
                  .80122
                  .79710
                  .79302

                  96
                  .83996
                  .83569
                  .83147
                  .82729
                  .82316
                  .81907
                  .81503
                  .81103
                  .80707
                  .80315

                  97
                  .84787
                  .84378
                  .83973
                  .83573
                  .83176
                  .82784
                  .82396
                  .82012
                  .81632
                  .81255

                  98
                  .85530
                  .85138
                  .84750
                  .84366
                  .83985
                  .83609
                  .83236
                  .82867
                  .82502
                  .82140

                  99
                  .86255
                  .85880
                  .85508
                  .85140
                  .84776
                  .84415
                  .84057
                  .83703
                  .83353
                  .83005

                  100
                  .86960
                  .86601
                  .86246
                  .85894
                  .85546
                  .85200
                  .84858
                  .84519
                  .84183
                  .83849

                  101
                  .87655
                  .87313
                  .86974
                  .86638
                  .86305
                  .85975
                  .85648
                  .85324
                  .85003
                  .84684

                  102
                  .88338
                  .88012
                  .87689
                  .87369
                  .87052
                  .86738
                  .86426
                  .86116
                  .85809
                  .85505

                  103
                  .89015
                  .88706
                  .88399
                  .88095
                  .87793
                  .87494
                  .87197
                  .86903
                  .86611
                  .86321

                  104
                  .89737
                  .89446
                  .89157
                  .88871
                  .88586
                  .88304
                  .88024
                  .87745
                  .87469
                  .87195

                  105
                  .90443
                  .90170
                  .89898
                  .89628
                  .89360
                  .89094
                  .88830
                  .88568
                  .88307
                  .88049

                  106
                  .91351
                  .91101
                  .90852
                  .90605
                  .90359
                  .90115
                  .89873
                  .89632
                  .89392
                  .89154

                  107
                  .92452
                  .92230
                  .92010
                  .91791
                  .91573
                  .91356
                  .91141
                  .90927
                  .90714
                  .90502

                  108
                  .94161
                  .93987
                  .93814
                  .93641
                  .93469
                  .93298
                  .93128
                  .92958
                  .92790
                  .92622

                  109
                  .97081
                  .96992
                  .96904
                  .96816
                  .96729
                  .96642
                  .96555
                  .96468
                  .96382
                  .96296

                Table S—Based on Life Table 90CM Single Life Remainder Factors
                [Applicable After April 30, 1999, and Before May 1, 2009]

                  Age
                  Interest rate
                  8.2%
                  8.4%
                  8.6%
                  8.8%
                  9.0%
                  9.2%
                  9.4%
                  9.6%
                  9.8%
                  10.0%

                  0
                  .01906
                  .01845
                  .01790
                  .01740
                  .01694
                  .01652
                  .01613
                  .01578
                  .01546
                  .01516

                  1
                  .01098
                  .01034
                  .00977
                  .00924
                  .00876
                  .00833
                  .00793
                  .00756
                  .00722
                  .00691

                  2
                  .01113
                  .01046
                  .00986
                  .00930
                  .00880
                  .00834
                  .00791
                  .00753
                  .00717
                  .00684

                  3
                  .01155
                  .01084
                  .01020
                  .00962
                  .00909
                  .00860
                  .00816
                  .00775
                  .00737
                  .00702

                  4
                  .01211
                  .01137
                  .01069
                  .01008
                  .00952
                  .00900
                  .00853
                  .00810
                  .00770
                  .00733

                  5
                  .01279
                  .01201
                  .01130
                  .01065
                  .01006
                  .00952
                  .00902
                  .00856
                  .00814
                  .00775

                  6
                  .01356
                  .01274
                  .01199
                  .01131
                  .01068
                  .01011
                  .00959
                  .00910
                  .00865
                  .00824

                  7
                  .01442
                  .01356
                  .01277
                  .01205
                  .01140
                  .01079
                  .01023
                  .00972
                  .00925
                  .00881

                  8
                  .01536
                  .01446
                  .01363
                  .01287
                  .01218
                  .01154
                  .01096
                  .01041
                  .00991
                  .00945

                  9
                  .01641
                  .01546
                  .01460
                  .01380
                  .01307
                  .01240
                  .01178
                  .01120
                  .01068
                  .01019

                  10
                  .01758
                  .01659
                  .01567
                  .01484
                  .01407
                  .01336
                  .01270
                  .01210
                  .01154
                  .01103

                  11
                  .01886
                  .01781
                  .01686
                  .01598
                  .01517
                  .01442
                  .01373
                  .01310
                  .01251
                  .01196

                  12
                  .02024
                  .01915
                  .01814
                  .01721
                  .01636
                  .01558
                  .01485
                  .01419
                  .01357
                  .01299

                  13
                  .02168
                  .02054
                  .01948
                  .01851
                  .01762
                  .01679
                  .01603
                  .01533
                  .01467
                  .01407

                  14
                  .02313
                  .02193
                  .02083
                  .01981
                  .01887
                  .01801
                  .01721
                  .01646
                  .01578
                  .01514

                  15
                  .02456
                  .02330
                  .02214
                  .02107
                  .02009
                  .01918
                  .01834
                  .01756
                  .01684
                  .01617

                  16
                  .02593
                  .02462
                  .02340
                  .02229
                  .02126
                  .02030
                  .01942
                  .01860
                  .01785
                  .01714

                  17
                  .02728
                  .02590
                  .02463
                  .02346
                  .02238
                  .02138
                  .02046
                  .01960
                  .01880
                  .01806

                  18
                  .02861
                  .02717
                  .02584
                  .02462
                  .02348
                  .02243
                  .02146
                  .02056
                  .01972
                  .01894

                  19
                  .02998
                  .02847
                  .02708
                  .02580
                  .02461
                  .02351
                  .02249
                  .02154
                  .02066
                  .01984

                  20
                  .03142
                  .02984
                  .02839
                  .02704
                  .02580
                  .02465
                  .02357
                  .02258
                  .02165
                  .02079

                  21
                  .03295
                  .03130
                  .02978
                  .02837
                  .02706
                  .02585
                  .02473
                  .02368
                  .02271
                  .02180

                  22
                  .03455
                  .03283
                  .03124
                  .02976
                  .02839
                  .02712
                  .02594
                  .02484
                  .02382
                  .02286

                  23
                  .03626
                  .03446
                  .03279
                  .03124
                  .02981
                  .02847
                  .02723
                  .02608
                  .02500
                  .02400

                  24
                  .03809
                  .03620
                  .03446
                  .03283
                  .03133
                  .02993
                  .02863
                  .02741
                  .02628
                  .02522

                  25
                  .04005
                  .03808
                  .03625
                  .03456
                  .03298
                  .03151
                  .03014
                  .02887
                  .02768
                  .02656

                  26
                  .04216
                  .04010
                  .03819
                  .03641
                  .03476
                  .03322
                  .03178
                  .03044
                  .02919
                  .02802

                  27
                  .04444
                  .04229
                  .04029
                  .03843
                  .03670
                  .03508
                  .03357
                  .03217
                  .03085
                  .02962

                  28
                  .04687
                  .04463
                  .04254
                  .04059
                  .03877
                  .03708
                  .03550
                  .03402
                  .03263
                  .03133

                  29
                  .04946
                  .04712
                  .04493
                  .04289
                  .04099
                  .03922
                  .03756
                  .03600
                  .03455
                  .03318

                  30
                  .05221
                  .04976
                  .04748
                  .04534
                  .04335
                  .04149
                  .03975
                  .03812
                  .03659
                  .03515

                  31
                  .05511
                  .05255
                  .05017
                  .04794
                  .04585
                  .04390
                  .04208
                  .04037
                  .03876
                  .03725

                  32
                  .05818
                  .05551
                  .05302
                  .05069
                  .04851
                  .04647
                  .04455
                  .04276
                  .04107
                  .03948

                  33
                  .06144
                  .05866
                  .05606
                  .05363
                  .05135
                  .04921
                  .04720
                  .04532
                  .04355
                  .04188

                  34
                  .06489
                  .06200
                  .05928
                  .05674
                  .05436
                  .05212
                  .05002
                  .04805
                  .04619
                  .04444

                  35
                  .06857
                  .06555
                  .06273
                  .06007
                  .05758
                  .05524
                  .05304
                  .05097
                  .04902
                  .04718

                  36
                  .07246
                  .06932
                  .06638
                  .06361
                  .06101
                  .05856
                  .05626
                  .05409
                  .05205
                  .05012

                  37
                  .07659
                  .07332
                  .07025
                  .06737
                  .06466
                  .06210
                  .05969
                  .05742
                  .05528
                  .05325

                  38
                  .08098
                  .07758
                  .07439
                  .07138
                  .06855
                  .06588
                  .06336
                  .06099
                  .05874
                  .05662

                  39
                  .08563
                  .08210
                  .07878
                  .07565
                  .07270
                  .06992
                  .06729
                  .06480
                  .06245
                  .06023

                  40
                  .09059
                  .08692
                  .08347
                  .08021
                  .07714
                  .07423
                  .07149
                  .06889
                  .06643
                  .06411

                  41
                  .09586
                  .09206
                  .08848
                  .08509
                  .08189
                  .07886
                  .07600
                  .07329
                  .07072
                  .06828

                  42
                  .10147
                  .09753
                  .09381
                  .09029
                  .08696
                  .08381
                  .08083
                  .07800
                  .07531
                  .07277

                  43
                  .10742
                  .10334
                  .09948
                  .09583
                  .09237
                  .08909
                  .08598
                  .08304
                  .08024
                  .07758

                  44
                  .11373
                  .10950
                  .10551
                  .10172
                  .09813
                  .09472
                  .09148
                  .08841
                  .08549
                  .08272

                  45
                  .12035
                  .11599
                  .11185
                  .10792
                  .10420
                  .10066
                  .09730
                  .09410
                  .09106
                  .08817

                  46
                  .12732
                  .12281
                  .11853
                  .11447
                  .11061
                  .10694
                  .10345
                  .10013
                  .09696
                  .09395

                  47
                  .13460
                  .12995
                  .12553
                  .12133
                  .11733
                  .11353
                  .10991
                  .10646
                  .10317
                  .10004

                  48
                  .14223
                  .13743
                  .13287
                  .12853
                  .12439
                  .12046
                  .11671
                  .11313
                  .10972
                  .10646

                  49
                  .15020
                  .14526
                  .14056
                  .13608
                  .13181
                  .12774
                  .12385
                  .12015
                  .11661
                  .11322

                  50
                  .15855
                  .15347
                  .14862
                  .14401
                  .13960
                  .13540
                  .13138
                  .12754
                  .12388
                  .12037

                  51
                  .16727
                  .16205
                  .15707
                  .15232
                  .14777
                  .14344
                  .13929
                  .13532
                  .13153
                  .12789

                  52
                  .17634
                  .17098
                  .16587
                  .16097
                  .15630
                  .15183
                  .14755
                  .14345
                  .13953
                  .13577

                  53
                  .18576
                  .18027
                  .17501
                  .16999
                  .16518
                  .16057
                  .15616
                  .15194
                  .14789
                  .14400

                  54
                  .19552
                  .18990
                  .18451
                  .17935
                  .17441
                  .16968
                  .16514
                  .16078
                  .15661
                  .15260

                  55
                  .20564
                  .19989
                  .19437
                  .18908
                  .18402
                  .17915
                  .17449
                  .17001
                  .16571
                  .16157

                  56
                  .21613
                  .21025
                  .20461
                  .19919
                  .19400
                  .18901
                  .18422
                  .17962
                  .17519
                  .17093

                  57
                  .22698
                  .22098
                  .21522
                  .20968
                  .20436
                  .19925
                  .19434
                  .18961
                  .18507
                  .18069

                  58
                  .23816
                  .23204
                  .22616
                  .22051
                  .21507
                  .20984
                  .20481
                  .19996
                  .19530
                  .19080

                  59
                  .24962
                  .24339
                  .23740
                  .23163
                  .22608
                  .22073
                  .21558
                  .21062
                  .20584
                  .20123

                  60
                  .26136
                  .25502
                  .24892
                  .24304
                  .23738
                  .23192
                  .22666
                  .22158
                  .21669
                  .21196

                  61
                  .27339
                  .26695
                  .26075
                  .25477
                  .24900
                  .24343
                  .23806
                  .23288
                  .22787
                  .22304

                  62
                  .28578
                  .27925
                  .27295
                  .26687
                  .26100
                  .25533
                  .24985
                  .24456
                  .23945
                  .23451

                  63
                  .29854
                  .29192
                  .28553
                  .27935
                  .27339
                  .26762
                  .26205
                  .25666
                  .25145
                  .24641

                  64
                  .31164
                  .30494
                  .29846
                  .29221
                  .28615
                  .28030
                  .27463
                  .26915
                  .26384
                  .25870

                  65
                  .32508
                  .31831
                  .31177
                  .30543
                  .29930
                  .29336
                  .28761
                  .28203
                  .27663
                  .27140

                  66
                  .33891
                  .33208
                  .32547
                  .31906
                  .31285
                  .30684
                  .30101
                  .29536
                  .28987
                  .28456

                  67
                  .35318
                  .34630
                  .33963
                  .33316
                  .32689
                  .32081
                  .31491
                  .30918
                  .30363
                  .29823

                  68
                  .36785
                  .36093
                  .35422
                  .34770
                  .34138
                  .33524
                  .32928
                  .32349
                  .31787
                  .31240

                  69
                  .38290
                  .37595
                  .36920
                  .36265
                  .35628
                  .35009
                  .34408
                  .33824
                  .33256
                  .32703

                  70
                  .39823
                  .39127
                  .38450
                  .37791
                  .37151
                  .36529
                  .35924
                  .35335
                  .34762
                  .34204

                  71
                  .41378
                  .40681
                  .40003
                  .39343
                  .38701
                  .38076
                  .37467
                  .36875
                  .36298
                  .35736

                  72
                  .42950
                  .42253
                  .41575
                  .40914
                  .40271
                  .39644
                  .39034
                  .38438
                  .37858
                  .37293

                  73
                  .44535
                  .43840
                  .43162
                  .42502
                  .41858
                  .41231
                  .40619
                  .40022
                  .39440
                  .38872

                  74
                  .46139
                  .45446
                  .44771
                  .44112
                  .43469
                  .42842
                  .42230
                  .41632
                  .41049
                  .40479

                  75
                  .47769
                  .47080
                  .46408
                  .45752
                  .45111
                  .44485
                  .43874
                  .43277
                  .42693
                  .42123

                  76
                  .49430
                  .48747
                  .48079
                  .47427
                  .46790
                  .46167
                  .45558
                  .44963
                  .44380
                  .43811

                  77
                  .51123
                  .50447
                  .49786
                  .49139
                  .48506
                  .47888
                  .47282
                  .46690
                  .46111
                  .45543

                  78
                  .52845
                  .52177
                  .51523
                  .50884
                  .50257
                  .49645
                  .49044
                  .48457
                  .47881
                  .47317

                  79
                  .54584
                  .53926
                  .53282
                  .52650
                  .52032
                  .51426
                  .50833
                  .50251
                  .49681
                  .49122

                  80
                  .56325
                  .55678
                  .55044
                  .54423
                  .53813
                  .53216
                  .52630
                  .52056
                  .51492
                  .50939

                  81
                  .58054
                  .57419
                  .56797
                  .56186
                  .55587
                  .54999
                  .54422
                  .53856
                  .53300
                  .52754

                  82
                  .59762
                  .59140
                  .58530
                  .57931
                  .57343
                  .56766
                  .56198
                  .55641
                  .55094
                  .54557

                  83
                  .61448
                  .60840
                  .60243
                  .59657
                  .59081
                  .58515
                  .57958
                  .57411
                  .56874
                  .56346

                  84
                  .63124
                  .62531
                  .61949
                  .61376
                  .60813
                  .60259
                  .59715
                  .59179
                  .58652
                  .58134

                  85
                  .64800
                  .64224
                  .63657
                  .63099
                  .62550
                  .62010
                  .61478
                  .60955
                  .60441
                  .59934

                  86
                  .66461
                  .65902
                  .65351
                  .64810
                  .64276
                  .63751
                  .63233
                  .62724
                  .62222
                  .61728

                  87
                  .68083
                  .67541
                  .67008
                  .66483
                  .65965
                  .65455
                  .64953
                  .64458
                  .63970
                  .63489

                  88
                  .69663
                  .69140
                  .68624
                  .68116
                  .67615
                  .67121
                  .66634
                  .66154
                  .65680
                  .65213

                  89
                  .71201
                  .70696
                  .70199
                  .69708
                  .69224
                  .68747
                  .68276
                  .67811
                  .67353
                  .66900

                  90
                  .72694
                  .72209
                  .71730
                  .71257
                  .70791
                  .70330
                  .69876
                  .69427
                  .68984
                  .68547

                  91
                  .74117
                  .73650
                  .73190
                  .72735
                  .72286
                  .71842
                  .71404
                  .70972
                  .70545
                  .70123

                  92
                  .75439
                  .74991
                  .74548
                  .74110
                  .73678
                  .73251
                  .72829
                  .72412
                  .72000
                  .71593

                  93
                  .76664
                  .76233
                  .75806
                  .75385
                  .74969
                  .74557
                  .74150
                  .73748
                  .73350
                  .72957

                  94
                  .77809
                  .77394
                  .76983
                  .76578
                  .76177
                  .75780
                  .75388
                  .75000
                  .74616
                  .74237

                  95
                  .78899
                  .78500
                  .78106
                  .77715
                  .77329
                  .76947
                  .76569
                  .76195
                  .75826
                  .75460

                  96
                  .79928
                  .79544
                  .79165
                  .78790
                  .78418
                  .78050
                  .77686
                  .77326
                  .76970
                  .76617

                  97
                  .80883
                  .80514
                  .80149
                  .79787
                  .79430
                  .79075
                  .78725
                  .78377
                  .78033
                  .77693

                  98
                  .81781
                  .81427
                  .81075
                  .80727
                  .80382
                  .80041
                  .79703
                  .79368
                  .79036
                  .78708

                  99
                  .82661
                  .82320
                  .81982
                  .81648
                  .81316
                  .80988
                  .80662
                  .80340
                  .80020
                  .79704

                  100
                  .83519
                  .83192
                  .82868
                  .82547
                  .82228
                  .81913
                  .81600
                  .81290
                  .80982
                  .80678

                  101
                  .84368
                  .84055
                  .83744
                  .83437
                  .83131
                  .82829
                  .82529
                  .82231
                  .81936
                  .81643

                  102
                  .85203
                  .84904
                  .84607
                  .84313
                  .84021
                  .83731
                  .83444
                  .83159
                  .82876
                  .82596

                  103
                  .86034
                  .85748
                  .85465
                  .85184
                  .84906
                  .84629
                  .84355
                  .84082
                  .83812
                  .83544

                  104
                  .86923
                  .86653
                  .86385
                  .86119
                  .85855
                  .85593
                  .85333
                  .85074
                  .84818
                  .84563

                  105
                  .87792
                  .87537
                  .87283
                  .87032
                  .86782
                  .86534
                  .86287
                  .86042
                  .85799
                  .85557

                  106
                  .88918
                  .88683
                  .88450
                  .88218
                  .87987
                  .87758
                  .87530
                  .87304
                  .87079
                  .86855

                  107
                  .90291
                  .90082
                  .89873
                  .89666
                  .89460
                  .89255
                  .89051
                  .88849
                  .88647
                  .88447

                  108
                  .92455
                  .92288
                  .92123
                  .91958
                  .91794
                  .91630
                  .91468
                  .91306
                  .91145
                  .90984

                  109
                  .96211
                  .96125
                  .96041
                  .95956
                  .95872
                  .95788
                  .95704
                  .95620
                  .95537
                  .95455

                Table S—Based on Life Table 90CM Single Life Remainder Factors
                [Applicable After April 30, 1999, and Before May 1, 2009]

                  Age
                  Interest rate
                  10.2%
                  10.4%
                  10.6%
                  10.8%
                  11.0%
                  11.2%
                  11.4%
                  11.6%
                  11.8%
                  12.0%

                  0
                  .01488
                  .01463
                  .01439
                  .01417
                  .01396
                  .01377
                  .01359
                  .01343
                  .01327
                  .01312

                  1
                  .00662
                  .00636
                  .00612
                  .00589
                  .00568
                  .00548
                  .00530
                  .00513
                  .00497
                  .00482

                  2
                  .00654
                  .00626
                  .00600
                  .00576
                  .00554
                  .00533
                  .00514
                  .00496
                  .00479
                  .00463

                  3
                  .00670
                  .00641
                  .00613
                  .00588
                  .00564
                  .00542
                  .00522
                  .00502
                  .00484
                  .00468

                  4
                  .00699
                  .00668
                  .00639
                  .00612
                  .00587
                  .00563
                  .00542
                  .00521
                  .00502
                  .00484

                  5
                  .00739
                  .00706
                  .00675
                  .00646
                  .00620
                  .00595
                  .00571
                  .00550
                  .00529
                  .00510

                  6
                  .00786
                  .00751
                  .00718
                  .00687
                  .00659
                  .00633
                  .00608
                  .00585
                  .00563
                  .00543

                  7
                  .00841
                  .00803
                  .00769
                  .00736
                  .00706
                  .00678
                  .00652
                  .00627
                  .00604
                  .00582

                  8
                  .00902
                  .00863
                  .00826
                  .00791
                  .00759
                  .00730
                  .00702
                  .00675
                  .00651
                  .00628

                  9
                  .00973
                  .00931
                  .00892
                  .00856
                  .00822
                  .00790
                  .00760
                  .00733
                  .00706
                  .00682

                  10
                  .01055
                  .01010
                  .00969
                  .00930
                  .00894
                  .00861
                  .00829
                  .00799
                  .00772
                  .00746

                  11
                  .01146
                  .01099
                  .01055
                  .01014
                  .00976
                  .00940
                  .00907
                  .00875
                  .00846
                  .00818

                  12
                  .01246
                  .01196
                  .01150
                  .01106
                  .01066
                  .01028
                  .00993
                  .00960
                  .00928
                  .00899

                  13
                  .01351
                  .01298
                  .01249
                  .01204
                  .01161
                  .01121
                  .01084
                  .01049
                  .01016
                  .00985

                  14
                  .01455
                  .01400
                  .01348
                  .01300
                  .01255
                  .01213
                  .01173
                  .01136
                  .01102
                  .01069

                  15
                  .01555
                  .01497
                  .01443
                  .01392
                  .01345
                  .01300
                  .01259
                  .01220
                  .01183
                  .01148

                  16
                  .01648
                  .01587
                  .01530
                  .01477
                  .01427
                  .01380
                  .01336
                  .01295
                  .01257
                  .01220

                  17
                  .01737
                  .01673
                  .01612
                  .01556
                  .01504
                  .01455
                  .01408
                  .01365
                  .01324
                  .01286

                  18
                  .01822
                  .01754
                  .01691
                  .01632
                  .01576
                  .01525
                  .01476
                  .01430
                  .01387
                  .01347

                  19
                  .01908
                  .01837
                  .01770
                  .01708
                  .01650
                  .01595
                  .01544
                  .01495
                  .01450
                  .01407

                  20
                  .01999
                  .01924
                  .01854
                  .01788
                  .01726
                  .01669
                  .01615
                  .01564
                  .01516
                  .01471

                  21
                  .02096
                  .02017
                  .01943
                  .01874
                  .01809
                  .01748
                  .01691
                  .01637
                  .01586
                  .01539

                  22
                  .02197
                  .02114
                  .02036
                  .01963
                  .01895
                  .01830
                  .01770
                  .01713
                  .01660
                  .01610

                  23
                  .02306
                  .02218
                  .02136
                  .02059
                  .01987
                  .01919
                  .01855
                  .01795
                  .01739
                  .01686

                  24
                  .02424
                  .02331
                  .02245
                  .02163
                  .02087
                  .02016
                  .01948
                  .01885
                  .01825
                  .01769

                  25
                  .02552
                  .02455
                  .02364
                  .02278
                  .02197
                  .02122
                  .02051
                  .01984
                  .01920
                  .01861

                  26
                  .02692
                  .02589
                  .02493
                  .02403
                  .02318
                  .02238
                  .02162
                  .02091
                  .02025
                  .01961

                  27
                  .02846
                  .02738
                  .02636
                  .02541
                  .02451
                  .02367
                  .02287
                  .02212
                  .02141
                  .02074

                  28
                  .03012
                  .02898
                  .02791
                  .02690
                  .02595
                  .02506
                  .02422
                  .02342
                  .02267
                  .02196

                  29
                  .03190
                  .03070
                  .02957
                  .02851
                  .02751
                  .02656
                  .02567
                  .02483
                  .02404
                  .02329

                  30
                  .03381
                  .03254
                  .03135
                  .03023
                  .02917
                  .02817
                  .02723
                  .02634
                  .02551
                  .02471

                  31
                  .03583
                  .03450
                  .03324
                  .03206
                  .03094
                  .02989
                  .02890
                  .02796
                  .02707
                  .02623

                  32
                  .03799
                  .03659
                  .03527
                  .03402
                  .03284
                  .03173
                  .03068
                  .02968
                  .02874
                  .02785

                  33
                  .04031
                  .03883
                  .03744
                  .03612
                  .03488
                  .03371
                  .03260
                  .03155
                  .03055
                  .02961

                  34
                  .04279
                  .04123
                  .03976
                  .03838
                  .03707
                  .03583
                  .03465
                  .03354
                  .03249
                  .03149

                  35
                  .04545
                  .04382
                  .04227
                  .04081
                  .03943
                  .03812
                  .03688
                  .03571
                  .03459
                  .03354

                  36
                  .04830
                  .04658
                  .04495
                  .04341
                  .04196
                  .04058
                  .03927
                  .03803
                  .03685
                  .03573

                  37
                  .05134
                  .04953
                  .04782
                  .04620
                  .04467
                  .04321
                  .04183
                  .04052
                  .03928
                  .03809

                  38
                  .05462
                  .05272
                  .05092
                  .04921
                  .04760
                  .04606
                  .04461
                  .04322
                  .04191
                  .04066

                  39
                  .05812
                  .05613
                  .05424
                  .05245
                  .05075
                  .04913
                  .04760
                  .04614
                  .04475
                  .04343

                  40
                  .06190
                  .05981
                  .05782
                  .05594
                  .05415
                  .05245
                  .05083
                  .04929
                  .04783
                  .04643

                  41
                  .06597
                  .06378
                  .06170
                  .05972
                  .05784
                  .05605
                  .05435
                  .05272
                  .05118
                  .04970

                  42
                  .07035
                  .06806
                  .06587
                  .06380
                  .06182
                  .05994
                  .05815
                  .05644
                  .05481
                  .05326

                  43
                  .07505
                  .07265
                  .07036
                  .06818
                  .06611
                  .06414
                  .06225
                  .06045
                  .05874
                  .05710

                  44
                  .08008
                  .07757
                  .07518
                  .07290
                  .07072
                  .06865
                  .06667
                  .06478
                  .06298
                  .06125

                  45
                  .08542
                  .08279
                  .08029
                  .07791
                  .07563
                  .07346
                  .07138
                  .06940
                  .06750
                  .06569

                  46
                  .09108
                  .08834
                  .08573
                  .08324
                  .08085
                  .07858
                  .07640
                  .07432
                  .07233
                  .07043

                  47
                  .09705
                  .09419
                  .09147
                  .08886
                  .08637
                  .08399
                  .08172
                  .07954
                  .07745
                  .07545

                  48
                  .10335
                  .10038
                  .09754
                  .09482
                  .09222
                  .08973
                  .08735
                  .08507
                  .08288
                  .08078

                  49
                  .10999
                  .10690
                  .10394
                  .10111
                  .09840
                  .09581
                  .09332
                  .09093
                  .08864
                  .08644

                  50
                  .11701
                  .11380
                  .11073
                  .10778
                  .10496
                  .10225
                  .09965
                  .09716
                  .09477
                  .09247

                  51
                  .12441
                  .12108
                  .11789
                  .11482
                  .11189
                  .10907
                  .10636
                  .10376
                  .10126
                  .09886

                  52
                  .13217
                  .12871
                  .12540
                  .12222
                  .11916
                  .11623
                  .11341
                  .11071
                  .10810
                  .10560

                  53
                  .14028
                  .13670
                  .13327
                  .12997
                  .12680
                  .12375
                  .12082
                  .11801
                  .11529
                  .11268

                  54
                  .14875
                  .14505
                  .14150
                  .13808
                  .13480
                  .13163
                  .12859
                  .12566
                  .12284
                  .12012

                  55
                  .15760
                  .15378
                  .15011
                  .14657
                  .14317
                  .13989
                  .13674
                  .13370
                  .13077
                  .12794

                  56
                  .16684
                  .16290
                  .15911
                  .15546
                  .15194
                  .14855
                  .14528
                  .14213
                  .13909
                  .13615

                  57
                  .17648
                  .17242
                  .16851
                  .16474
                  .16111
                  .15760
                  .15422
                  .15096
                  .14781
                  .14477

                  58
                  .18647
                  .18229
                  .17827
                  .17438
                  .17064
                  .16702
                  .16353
                  .16015
                  .15689
                  .15374

                  59
                  .19678
                  .19249
                  .18835
                  .18435
                  .18049
                  .17676
                  .17316
                  .16968
                  .16631
                  .16305

                  60
                  .20740
                  .20300
                  .19875
                  .19464
                  .19066
                  .18682
                  .18311
                  .17952
                  .17604
                  .17268

                  61
                  .21837
                  .21385
                  .20949
                  .20527
                  .20119
                  .19724
                  .19341
                  .18971
                  .18613
                  .18266

                  62
                  .22973
                  .22511
                  .22064
                  .21631
                  .21212
                  .20807
                  .20414
                  .20033
                  .19664
                  .19306

                  63
                  .24152
                  .23680
                  .23222
                  .22779
                  .22350
                  .21934
                  .21530
                  .21139
                  .20760
                  .20392

                  64
                  .25372
                  .24890
                  .24422
                  .23969
                  .23529
                  .23103
                  .22690
                  .22289
                  .21899
                  .21521

                  65
                  .26633
                  .26141
                  .25664
                  .25201
                  .24752
                  .24316
                  .23893
                  .23482
                  .23083
                  .22695

                  66
                  .27940
                  .27439
                  .26953
                  .26481
                  .26023
                  .25577
                  .25145
                  .24724
                  .24316
                  .23918

                  67
                  .29299
                  .28790
                  .28296
                  .27815
                  .27348
                  .26894
                  .26453
                  .26024
                  .25606
                  .25200

                  68
                  .30709
                  .30193
                  .29691
                  .29202
                  .28728
                  .28265
                  .27816
                  .27378
                  .26952
                  .26537

                  69
                  .32166
                  .31643
                  .31134
                  .30639
                  .30157
                  .29687
                  .29230
                  .28785
                  .28351
                  .27928

                  70
                  .33661
                  .33133
                  .32618
                  .32116
                  .31628
                  .31152
                  .30688
                  .30235
                  .29794
                  .29364

                  71
                  .35188
                  .34654
                  .34134
                  .33627
                  .33133
                  .32651
                  .32181
                  .31722
                  .31275
                  .30838

                  72
                  .36742
                  .36204
                  .35679
                  .35168
                  .34668
                  .34181
                  .33706
                  .33241
                  .32788
                  .32345

                  73
                  .38317
                  .37776
                  .37248
                  .36733
                  .36229
                  .35738
                  .35257
                  .34788
                  .34330
                  .33882

                  74
                  .39923
                  .39380
                  .38849
                  .38330
                  .37823
                  .37328
                  .36844
                  .36370
                  .35908
                  .35455

                  75
                  .41566
                  .41021
                  .40489
                  .39968
                  .39459
                  .38961
                  .38474
                  .37997
                  .37531
                  .37074

                  76
                  .43254
                  .42709
                  .42176
                  .41655
                  .41144
                  .40645
                  .40156
                  .39677
                  .39208
                  .38749

                  77
                  .44988
                  .44444
                  .43912
                  .43391
                  .42880
                  .42380
                  .41891
                  .41411
                  .40940
                  .40479

                  78
                  .46765
                  .46224
                  .45694
                  .45174
                  .44665
                  .44166
                  .43677
                  .43197
                  .42726
                  .42265

                  79
                  .48574
                  .48037
                  .47510
                  .46993
                  .46487
                  .45990
                  .45502
                  .45024
                  .44554
                  .44094

                  80
                  .50397
                  .49865
                  .49343
                  .48830
                  .48327
                  .47834
                  .47349
                  .46873
                  .46406
                  .45947

                  81
                  .52219
                  .51693
                  .51176
                  .50669
                  .50171
                  .49682
                  .49201
                  .48729
                  .48265
                  .47809

                  82
                  .54029
                  .53510
                  .53000
                  .52499
                  .52007
                  .51523
                  .51047
                  .50580
                  .50120
                  .49667

                  83
                  .55826
                  .55315
                  .54813
                  .54319
                  .53834
                  .53356
                  .52886
                  .52424
                  .51969
                  .51522

                  84
                  .57624
                  .57123
                  .56629
                  .56144
                  .55666
                  .55195
                  .54732
                  .54277
                  .53828
                  .53386

                  85
                  .59435
                  .58944
                  .58460
                  .57984
                  .57516
                  .57054
                  .56599
                  .56151
                  .55710
                  .55275

                  86
                  .61241
                  .60762
                  .60289
                  .59824
                  .59365
                  .58913
                  .58468
                  .58029
                  .57596
                  .57170

                  87
                  .63015
                  .62548
                  .62087
                  .61633
                  .61185
                  .60744
                  .60309
                  .59880
                  .59456
                  .59039

                  88
                  .64753
                  .64299
                  .63851
                  .63409
                  .62973
                  .62543
                  .62118
                  .61700
                  .61287
                  .60879

                  89
                  .66454
                  .66013
                  .65579
                  .65150
                  .64726
                  .64308
                  .63895
                  .63488
                  .63086
                  .62689

                  90
                  .68115
                  .67689
                  .67268
                  .66853
                  .66442
                  .66037
                  .65637
                  .65241
                  .64851
                  .64465

                  91
                  .69706
                  .69294
                  .68887
                  .68486
                  .68089
                  .67696
                  .67309
                  .66925
                  .66547
                  .66173

                  92
                  .71190
                  .70792
                  .70399
                  .70011
                  .69627
                  .69247
                  .68872
                  .68501
                  .68134
                  .67771

                  93
                  .72569
                  .72184
                  .71804
                  .71429
                  .71057
                  .70689
                  .70326
                  .69967
                  .69611
                  .69259

                  94
                  .73861
                  .73490
                  .73123
                  .72759
                  .72400
                  .72044
                  .71692
                  .71344
                  .71000
                  .70659

                  95
                  .75097
                  .74739
                  .74384
                  .74033
                  .73686
                  .73342
                  .73002
                  .72665
                  .72331
                  .72001

                  96
                  .76267
                  .75922
                  .75579
                  .75240
                  .74905
                  .74572
                  .74243
                  .73917
                  .73595
                  .73275

                  97
                  .77356
                  .77022
                  .76691
                  .76363
                  .76039
                  .75718
                  .75399
                  .75084
                  .74772
                  .74463

                  98
                  .78382
                  .78059
                  .77740
                  .77423
                  .77110
                  .76799
                  .76491
                  .76186
                  .75884
                  .75584

                  99
                  .79390
                  .79079
                  .78771
                  .78465
                  .78162
                  .77862
                  .77565
                  .77270
                  .76978
                  .76688

                  100
                  .80376
                  .80076
                  .79779
                  .79485
                  .79193
                  .78904
                  .78617
                  .78333
                  .78051
                  .77771

                  101
                  .81353
                  .81066
                  .80780
                  .80497
                  .80217
                  .79938
                  .79662
                  .79388
                  .79117
                  .78847

                  102
                  .82318
                  .82042
                  .81768
                  .81496
                  .81227
                  .80960
                  .80694
                  .80431
                  .80170
                  .79911

                  103
                  .83278
                  .83014
                  .82752
                  .82491
                  .82233
                  .81977
                  .81723
                  .81470
                  .81220
                  .80971

                  104
                  .84310
                  .84059
                  .83810
                  .83563
                  .83317
                  .83073
                  .82831
                  .82591
                  .82352
                  .82115

                  105
                  .85318
                  .85079
                  .84843
                  .84607
                  .84374
                  .84142
                  .83911
                  .83682
                  .83455
                  .83229

                  106
                  .86633
                  .86413
                  .86193
                  .85975
                  .85758
                  .85543
                  .85329
                  .85116
                  .84904
                  .84694

                  107
                  .88247
                  .88049
                  .87852
                  .87656
                  .87460
                  .87266
                  .87073
                  .86881
                  .86690
                  .86500

                  108
                  .90825
                  .90666
                  .90507
                  .90350
                  .90193
                  .90037
                  .89881
                  .89727
                  .89572
                  .89419

                  109
                  .95372
                  .95290
                  .95208
                  .95126
                  .95045
                  .94964
                  .94883
                  .94803
                  .94723
                  .94643

                Table S—Based on Life Table 90CM Single Life Remainder Factors
                [Applicable After April 30, 1999, and Before May 1, 2009]

                  Age
                  Interest rate
                  12.2%
                  12.4%
                  12.6%
                  12.8%
                  13.0%
                  13.2%
                  13.4%
                  13.6%
                  13.8%
                  14.0%

                  0
                  .01298
                  .01285
                  .01273
                  .01261
                  .01250
                  .01240
                  .01230
                  .01221
                  .01212
                  .01203

                  1
                  .00468
                  .00455
                  .00443
                  .00431
                  .00420
                  .00410
                  .00400
                  .00391
                  .00382
                  .00374

                  2
                  .00448
                  .00435
                  .00421
                  .00409
                  .00398
                  .00387
                  .00376
                  .00366
                  .00357
                  .00348

                  3
                  .00452
                  .00437
                  .00423
                  .00410
                  .00398
                  .00386
                  .00375
                  .00365
                  .00355
                  .00345

                  4
                  .00468
                  .00452
                  .00437
                  .00423
                  .00410
                  .00397
                  .00386
                  .00375
                  .00364
                  .00354

                  5
                  .00493
                  .00476
                  .00460
                  .00445
                  .00431
                  .00418
                  .00405
                  .00393
                  .00382
                  .00371

                  6
                  .00524
                  .00506
                  .00489
                  .00473
                  .00458
                  .00444
                  .00430
                  .00418
                  .00406
                  .00394

                  7
                  .00562
                  .00543
                  .00525
                  .00508
                  .00492
                  .00477
                  .00462
                  .00449
                  .00436
                  .00423

                  8
                  .00606
                  .00586
                  .00566
                  .00548
                  .00531
                  .00515
                  .00499
                  .00485
                  .00471
                  .00458

                  9
                  .00659
                  .00637
                  .00616
                  .00597
                  .00579
                  .00561
                  .00545
                  .00529
                  .00514
                  .00500

                  10
                  .00721
                  .00698
                  .00676
                  .00655
                  .00636
                  .00617
                  .00600
                  .00583
                  .00567
                  .00552

                  11
                  .00792
                  .00767
                  .00744
                  .00722
                  .00701
                  .00682
                  .00663
                  .00645
                  .00628
                  .00612

                  12
                  .00871
                  .00845
                  .00821
                  .00797
                  .00775
                  .00754
                  .00735
                  .00716
                  .00698
                  .00681

                  13
                  .00955
                  .00928
                  .00902
                  .00877
                  .00854
                  .00831
                  .00810
                  .00790
                  .00771
                  .00753

                  14
                  .01038
                  .01009
                  .00981
                  .00955
                  .00930
                  .00907
                  .00885
                  .00864
                  .00843
                  .00824

                  15
                  .01116
                  .01085
                  .01056
                  .01028
                  .01002
                  .00977
                  .00954
                  .00932
                  .00910
                  .00890

                  16
                  .01186
                  .01153
                  .01123
                  .01094
                  .01066
                  .01040
                  .01015
                  .00992
                  .00969
                  .00948

                  17
                  .01250
                  .01215
                  .01183
                  .01152
                  .01124
                  .01096
                  .01070
                  .01045
                  .01022
                  .00999

                  18
                  .01308
                  .01272
                  .01238
                  .01206
                  .01175
                  .01147
                  .01119
                  .01093
                  .01068
                  .01044

                  19
                  .01367
                  .01329
                  .01293
                  .01259
                  .01227
                  .01196
                  .01167
                  .01140
                  .01113
                  .01088

                  20
                  .01428
                  .01388
                  .01350
                  .01314
                  .01280
                  .01248
                  .01217
                  .01188
                  .01161
                  .01134

                  21
                  .01494
                  .01451
                  .01411
                  .01373
                  .01337
                  .01303
                  .01271
                  .01240
                  .01211
                  .01183

                  22
                  .01562
                  .01517
                  .01475
                  .01435
                  .01397
                  .01361
                  .01326
                  .01294
                  .01263
                  .01233

                  23
                  .01635
                  .01588
                  .01543
                  .01501
                  .01460
                  .01422
                  .01386
                  .01351
                  .01319
                  .01287

                  24
                  .01716
                  .01665
                  .01618
                  .01573
                  .01530
                  .01489
                  .01451
                  .01415
                  .01380
                  .01347

                  25
                  .01804
                  .01751
                  .01701
                  .01653
                  .01608
                  .01565
                  .01524
                  .01485
                  .01448
                  .01413

                  26
                  .01902
                  .01845
                  .01792
                  .01741
                  .01693
                  .01648
                  .01604
                  .01563
                  .01524
                  .01487

                  27
                  .02011
                  .01951
                  .01895
                  .01841
                  .01790
                  .01742
                  .01696
                  .01652
                  .01610
                  .01571

                  28
                  .02129
                  .02066
                  .02006
                  .01949
                  .01895
                  .01844
                  .01795
                  .01748
                  .01704
                  .01662

                  29
                  .02258
                  .02191
                  .02127
                  .02067
                  .02009
                  .01955
                  .01903
                  .01853
                  .01806
                  .01762

                  30
                  .02396
                  .02325
                  .02257
                  .02193
                  .02132
                  .02074
                  .02019
                  .01966
                  .01916
                  .01869

                  31
                  .02543
                  .02467
                  .02396
                  .02328
                  .02263
                  .02201
                  .02143
                  .02087
                  .02034
                  .01983

                  32
                  .02701
                  .02621
                  .02545
                  .02472
                  .02404
                  .02338
                  .02276
                  .02217
                  .02160
                  .02106

                  33
                  .02871
                  .02786
                  .02706
                  .02629
                  .02556
                  .02487
                  .02420
                  .02357
                  .02297
                  .02240

                  34
                  .03054
                  .02964
                  .02879
                  .02797
                  .02720
                  .02646
                  .02576
                  .02509
                  .02445
                  .02383

                  35
                  .03253
                  .03158
                  .03067
                  .02981
                  .02898
                  .02820
                  .02745
                  .02674
                  .02606
                  .02541

                  36
                  .03467
                  .03366
                  .03269
                  .03178
                  .03090
                  .03007
                  .02928
                  .02852
                  .02779
                  .02710

                  37
                  .03697
                  .03590
                  .03488
                  .03391
                  .03298
                  .03209
                  .03125
                  .03044
                  .02967
                  .02893

                  38
                  .03947
                  .03833
                  .03725
                  .03622
                  .03524
                  .03430
                  .03340
                  .03254
                  .03172
                  .03094

                  39
                  .04217
                  .04096
                  .03982
                  .03873
                  .03768
                  .03669
                  .03573
                  .03482
                  .03395
                  .03312

                  40
                  .04510
                  .04383
                  .04262
                  .04146
                  .04035
                  .03930
                  .03828
                  .03732
                  .03639
                  .03550

                  41
                  .04830
                  .04695
                  .04567
                  .04445
                  .04327
                  .04215
                  .04108
                  .04005
                  .03907
                  .03812

                  42
                  .05177
                  .05035
                  .04900
                  .04770
                  .04646
                  .04527
                  .04413
                  .04304
                  .04200
                  .04100

                  43
                  .05553
                  .05404
                  .05261
                  .05123
                  .04992
                  .04866
                  .04746
                  .04630
                  .04520
                  .04413

                  44
                  .05960
                  .05802
                  .05651
                  .05506
                  .05368
                  .05235
                  .05107
                  .04985
                  .04867
                  .04754

                  45
                  .06395
                  .06229
                  .06069
                  .05917
                  .05770
                  .05630
                  .05495
                  .05365
                  .05241
                  .05121

                  46
                  .06860
                  .06685
                  .06517
                  .06356
                  .06202
                  .06053
                  .05911
                  .05774
                  .05643
                  .05516

                  47
                  .07353
                  .07169
                  .06992
                  .06823
                  .06660
                  .06504
                  .06353
                  .06209
                  .06070
                  .05936

                  48
                  .07877
                  .07684
                  .07498
                  .07320
                  .07149
                  .06984
                  .06826
                  .06673
                  .06527
                  .06385

                  49
                  .08433
                  .08231
                  .08036
                  .07849
                  .07669
                  .07495
                  .07329
                  .07168
                  .07013
                  .06864

                  50
                  .09026
                  .08814
                  .08609
                  .08413
                  .08224
                  .08042
                  .07867
                  .07698
                  .07535
                  .07378

                  51
                  .09655
                  .09433
                  .09219
                  .09013
                  .08815
                  .08624
                  .08440
                  .08262
                  .08091
                  .07926

                  52
                  .10318
                  .10086
                  .09863
                  .09647
                  .09439
                  .09239
                  .09046
                  .08860
                  .08680
                  .08506

                  53
                  .11017
                  .10774
                  .10541
                  .10315
                  .10098
                  .09888
                  .09686
                  .09491
                  .09302
                  .09120

                  54
                  .11750
                  .11498
                  .11254
                  .11019
                  .10792
                  .10572
                  .10361
                  .10156
                  .09958
                  .09767

                  55
                  .12522
                  .12258
                  .12005
                  .11759
                  .11522
                  .11294
                  .11072
                  .10859
                  .10652
                  .10451

                  56
                  .13332
                  .13059
                  .12794
                  .12539
                  .12292
                  .12054
                  .11823
                  .11599
                  .11383
                  .11174

                  57
                  .14183
                  .13899
                  .13624
                  .13359
                  .13102
                  .12853
                  .12613
                  .12380
                  .12154
                  .11936

                  58
                  .15070
                  .14775
                  .14490
                  .14215
                  .13948
                  .13689
                  .13439
                  .13197
                  .12962
                  .12734

                  59
                  .15990
                  .15685
                  .15389
                  .15103
                  .14826
                  .14558
                  .14298
                  .14046
                  .13801
                  .13564

                  60
                  .16942
                  .16626
                  .16321
                  .16024
                  .15737
                  .15459
                  .15189
                  .14927
                  .14673
                  .14426

                  61
                  .17929
                  .17603
                  .17287
                  .16981
                  .16684
                  .16395
                  .16115
                  .15844
                  .15580
                  .15324

                  62
                  .18960
                  .18623
                  .18297
                  .17980
                  .17673
                  .17375
                  .17085
                  .16803
                  .16530
                  .16264

                  63
                  .20035
                  .19688
                  .19352
                  .19025
                  .18708
                  .18400
                  .18100
                  .17809
                  .17525
                  .17250

                  64
                  .21154
                  .20797
                  .20451
                  .20114
                  .19787
                  .19469
                  .19159
                  .18859
                  .18566
                  .18281

                  65
                  .22318
                  .21951
                  .21595
                  .21249
                  .20912
                  .20584
                  .20265
                  .19955
                  .19652
                  .19358

                  66
                  .23532
                  .23156
                  .22790
                  .22434
                  .22088
                  .21751
                  .21422
                  .21102
                  .20791
                  .20487

                  67
                  .24804
                  .24419
                  .24044
                  .23679
                  .23324
                  .22977
                  .22640
                  .22311
                  .21990
                  .21678

                  68
                  .26133
                  .25740
                  .25356
                  .24983
                  .24618
                  .24263
                  .23917
                  .23579
                  .23250
                  .22929

                  69
                  .27516
                  .27114
                  .26723
                  .26341
                  .25969
                  .25605
                  .25251
                  .24905
                  .24567
                  .24237

                  70
                  .28945
                  .28536
                  .28137
                  .27747
                  .27367
                  .26996
                  .26633
                  .26279
                  .25934
                  .25596

                  71
                  .30412
                  .29996
                  .29590
                  .29193
                  .28806
                  .28427
                  .28057
                  .27696
                  .27343
                  .26998

                  72
                  .31913
                  .31491
                  .31078
                  .30675
                  .30281
                  .29895
                  .29519
                  .29150
                  .28790
                  .28438

                  73
                  .33444
                  .33016
                  .32597
                  .32188
                  .31788
                  .31396
                  .31013
                  .30638
                  .30271
                  .29913

                  74
                  .35012
                  .34579
                  .34155
                  .33741
                  .33335
                  .32938
                  .32549
                  .32168
                  .31795
                  .31430

                  75
                  .36628
                  .36190
                  .35762
                  .35343
                  .34932
                  .34530
                  .34136
                  .33750
                  .33372
                  .33001

                  76
                  .38299
                  .37858
                  .37427
                  .37004
                  .36589
                  .36183
                  .35784
                  .35394
                  .35011
                  .34636

                  77
                  .40028
                  .39585
                  .39151
                  .38725
                  .38307
                  .37898
                  .37496
                  .37103
                  .36716
                  .36337

                  78
                  .41812
                  .41368
                  .40933
                  .40506
                  .40086
                  .39675
                  .39271
                  .38874
                  .38485
                  .38103

                  79
                  .43641
                  .43198
                  .42762
                  .42334
                  .41914
                  .41502
                  .41096
                  .40698
                  .40308
                  .39924

                  80
                  .45496
                  .45054
                  .44619
                  .44192
                  .43772
                  .43360
                  .42954
                  .42556
                  .42164
                  .41779

                  81
                  .47360
                  .46920
                  .46487
                  .46061
                  .45643
                  .45231
                  .44827
                  .44429
                  .44038
                  .43653

                  82
                  .49223
                  .48785
                  .48355
                  .47932
                  .47516
                  .47106
                  .46703
                  .46307
                  .45916
                  .45532

                  83
                  .51081
                  .50648
                  .50221
                  .49802
                  .49388
                  .48982
                  .48581
                  .48187
                  .47799
                  .47416

                  84
                  .52951
                  .52523
                  .52101
                  .51686
                  .51277
                  .50874
                  .50477
                  .50086
                  .49701
                  .49321

                  85
                  .54847
                  .54425
                  .54009
                  .53600
                  .53196
                  .52798
                  .52406
                  .52019
                  .51638
                  .51262

                  86
                  .56749
                  .56335
                  .55926
                  .55523
                  .55126
                  .54734
                  .54348
                  .53966
                  .53591
                  .53220

                  87
                  .58627
                  .58221
                  .57820
                  .57425
                  .57035
                  .56650
                  .56270
                  .55895
                  .55526
                  .55161

                  88
                  .60477
                  .60079
                  .59688
                  .59301
                  .58919
                  .58542
                  .58170
                  .57802
                  .57439
                  .57081

                  89
                  .62297
                  .61909
                  .61527
                  .61149
                  .60776
                  .60408
                  .60044
                  .59685
                  .59330
                  .58979

                  90
                  .64084
                  .63707
                  .63335
                  .62968
                  .62604
                  .62246
                  .61891
                  .61540
                  .61194
                  .60851

                  91
                  .65803
                  .65437
                  .65076
                  .64719
                  .64366
                  .64017
                  .63672
                  .63330
                  .62993
                  .62659

                  92
                  .67412
                  .67058
                  .66707
                  .66360
                  .66017
                  .65678
                  .65342
                  .65010
                  .64682
                  .64357

                  93
                  .68911
                  .68567
                  .68227
                  .67890
                  .67557
                  .67227
                  .66901
                  .66578
                  .66258
                  .65942

                  94
                  .70321
                  .69988
                  .69657
                  .69330
                  .69006
                  .68686
                  .68369
                  .68055
                  .67744
                  .67437

                  95
                  .71674
                  .71351
                  .71031
                  .70713
                  .70399
                  .70088
                  .69781
                  .69476
                  .69174
                  .68875

                  96
                  .72959
                  .72646
                  .72335
                  .72028
                  .71724
                  .71422
                  .71123
                  .70828
                  .70534
                  .70244

                  97
                  .74156
                  .73853
                  .73552
                  .73254
                  .72959
                  .72666
                  .72376
                  .72089
                  .71804
                  .71522

                  98
                  .75287
                  .74993
                  .74702
                  .74413
                  .74126
                  .73842
                  .73561
                  .73282
                  .73006
                  .72732

                  99
                  .76401
                  .76117
                  .75834
                  .75555
                  .75277
                  .75002
                  .74730
                  .74459
                  .74191
                  .73926

                  100
                  .77494
                  .77219
                  .76946
                  .76676
                  .76408
                  .76142
                  .75878
                  .75616
                  .75357
                  .75099

                  101
                  .78580
                  .78315
                  .78052
                  .77791
                  .77532
                  .77275
                  .77021
                  .76768
                  .76517
                  .76268

                  102
                  .79654
                  .79399
                  .79146
                  .78894
                  .78645
                  .78397
                  .78152
                  .77908
                  .77666
                  .77426

                  103
                  .80724
                  .80479
                  .80236
                  .79994
                  .79755
                  .79517
                  .79280
                  .79046
                  .78813
                  .78582

                  104
                  .81879
                  .81646
                  .81413
                  .81183
                  .80954
                  .80726
                  .80501
                  .80276
                  .80054
                  .79832

                  105
                  .83005
                  .82782
                  .82560
                  .82340
                  .82121
                  .81904
                  .81688
                  .81474
                  .81260
                  .81049

                  106
                  .84485
                  .84277
                  .84071
                  .83866
                  .83662
                  .83459
                  .83257
                  .83057
                  .82857
                  .82659

                  107
                  .86311
                  .86124
                  .85937
                  .85751
                  .85566
                  .85382
                  .85199
                  .85017
                  .84835
                  .84655

                  108
                  .89266
                  .89114
                  .88963
                  .88812
                  .88662
                  .88513
                  .88364
                  .88216
                  .88068
                  .87922

                  109
                  .94563
                  .94484
                  .94405
                  .94326
                  .94248
                  .94170
                  .94092
                  .94014
                  .93937
                  .93860

              (7) Effective/applicability dates. Paragraphs (f)(1) through (f)(6) apply after April 30, 1999, and before May 1, 2009.
              [Redesignated at 36 FR 6480, Apr. 6, 1971, as amended by T.D. 8540, 59 FR 30102, 30105, 30116, June 10, 1994; T.D. 8819, 64 FR 23190, 23199, 23228, Apr. 30, 1999; 64 FR 33196, June 22, 1999; T.D. 8886, 65 FR 36943, June 12, 2000; T.D. 9448, 74 FR 21440, 21464, May 7, 2009; T.D. 9540, 76 FR 49612, Aug. 10, 2011]

            Election to Treat Trust as Part of an Estate

              § 1.645-1
              Election by certain revocable trusts to be treated as part of estate.
              (a) In general. If an election is filed for a qualified revocable trust, as defined in paragraph (b)(1) of this section, in accordance with the rules set forth in paragraph (c) of this section, the qualified revocable trust is treated and taxed for purposes of subtitle A of the Internal Revenue Code as part of its related estate, as defined in paragraph (b)(5) of this section (and not as a separate trust) during the election period, as defined in paragraph (b)(6) of this section. Rules regarding the use of taxpayer identification numbers (TINs) and the filing of a Form 1041, “U.S. Income Tax Return for Estates and Trusts,” for a qualified revocable trust are in paragraph (d) of this section. Rules regarding the tax treatment of an electing trust and related estate and the general filing requirements for the combined entity during the election period are in paragraph (e)(2) of this section. Rules regarding the tax treatment of an electing trust and its filing requirements during the election period if no executor, as defined in paragraph (b)(4) of this section, is appointed for a related estate are in paragraph (e)(3) of this section. Rules for determining the duration of the section 645 election period are in paragraph (f) of this section. Rules regarding the tax effects of the termination of the election are in paragraph (h) of this section. Rules regarding the tax consequences of the appointment of an executor after a trustee has made a section 645 election believing that an executor would not be appointed for a related estate are in paragraph (g) of this section.
              (b) Definitions. For purposes of this section:
              (1) Qualified revocable trust. A qualified revocable trust (QRT) is any trust (or portion thereof) that on the date of death of the decedent was treated as owned by the decedent under section 676 by reason of a power held by the decedent (determined without regard to section 672(e)). A trust that was treated as owned by the decedent under section 676 by reason of a power that was exercisable by the decedent only with the approval or consent of a nonadverse party or with the approval or consent of the decedent's spouse is a QRT. A trust that was treated as owned by the decedent under section 676 solely by reason of a power held by a nonadverse party or by reason of a power held by the decedent's spouse is not a QRT.
              (2) Electing trust. An electing trust is a QRT for which a valid section 645 election has been made. Once a section 645 election has been made for the trust, the trust shall be treated as an electing trust throughout the entire election period.
              (3) Decedent. The decedent is the individual who was treated as the owner of the QRT under section 676 on the date of that individual's death.
              (4) Executor. An executor is an executor, personal representative, or administrator that has obtained letters of appointment to administer the decedent's estate through formal or informal appointment procedures. Solely for purposes of this paragraph (b)(4), an executor does not include a person that has actual or constructive possession of property of the decedent unless that person is also appointed or qualified as an executor, administrator, or personal representative of the decedent's estate. If more than one jurisdiction has appointed an executor, the executor appointed in the domiciliary or primary proceeding is the executor of the related estate for purposes of this paragraph (b)(4).
              (5) Related estate. A related estate is the estate of the decedent who was treated as the owner of the QRT on the date of the decedent's death.
              (6) Election period. The election period is the period of time during which an electing trust is treated and taxed as part of its related estate. The rules for determining the duration of the election period are in paragraph (f) of this section.
              (c) The election—(1) Filing the election if there is an executor—(i) Time and manner for filing the election. If there is an executor of the related estate, the trustees of each QRT joining in the election and the executor of the related estate make an election under section 645 and this section to treat each QRT joining in the election as part of the related estate for purposes of subtitle A of the Internal Revenue Code by filing a form provided by the IRS for making the election (election form) properly completed and signed under penalties of perjury, or in any other manner prescribed after December 24, 2002 by forms provided by the Internal Revenue Service (IRS), or by other published guidance for making the election. For the election to be valid, the election form must be filed not later than the time prescribed under section 6072 for filing the Form 1041 for the first taxable year of the related estate (regardless of whether there is sufficient income to require the filing of that return). If an extension is granted for the filing of the Form 1041 for the first taxable year of the related estate, the election form will be timely filed if it is filed by the time prescribed for filing the Form 1041 including the extension granted with respect to the Form 1041.
              (ii) Conditions to election. In addition to providing the information required by the election form, as a condition to a valid section 645 election, the trustee of each QRT joining in the election and the executor of the related estate agree, by signing the election form under penalties of perjury, that:
              (A) With respect to a trustee—
              (1) The trustee agrees to the election;
              (2) The trustee is responsible for timely providing the executor of the related estate with all the trust information necessary to permit the executor to file a complete, accurate, and timely Form 1041 for the combined electing trust(s) and related estate for each taxable year during the election period;
              (3) The trustee of each QRT joining the election and the executor of the related estate have agreed to allocate the tax burden of the combined electing trust(s) and related estate for each taxable year during the election period in a manner that reasonably reflects the tax obligations of each electing trust and the related estate; and
              (4) The trustee is responsible for insuring that the electing trust's share of the tax obligations of the combined electing trust(s) and related estate is timely paid to the Secretary.
              (B) With respect to the executor—
              (1) The executor agrees to the election;
              (2) The executor is responsible for filing a complete, accurate, and timely Form 1041 for the combined electing trust(s) and related estate for each taxable year during the election period;
              (3) The executor and the trustee of each QRT joining in the election have agreed to allocate the tax burden of the combined electing trust(s) and related estate for each taxable year during the election period in a manner that reasonably reflects the tax obligations of each electing trust and the related estate;
              (4) The executor is responsible for insuring that the related estate's share of the tax obligations of the combined electing trust(s) and related estate is timely paid to the Secretary.
              (2) Filing the election if there is no executor—(i) Time and manner for filing the election. If there is no executor for a related estate, an election to treat one or more QRTs of the decedent as an estate for purposes of subtitle A of the Internal Revenue Code is made by the trustees of each QRT joining in the election, by filing a properly completed election form, or in any other manner prescribed after December 24, 2002 by forms provided by the IRS, or by other published guidance for making the election. For the election to be valid, the election form must be filed not later than the time prescribed under section 6072 for filing the Form 1041 for the first taxable year of the trust, taking into account the trustee's election to treat the trust as an estate under section 645 (regardless of whether there is sufficient income to require the filing of that return). If an extension is granted for the filing of the Form 1041 for the first taxable year of the electing trust, the election form will be timely filed if it is filed by the time prescribed for filing the Form 1041 including the extension granted with respect to the filing of the Form 1041.
              (ii) Conditions to election. In addition to providing the information required by the election form, as a condition to a valid section 645 election, the trustee of each QRT joining in the election agrees, by signing the election form under penalties of perjury, that—

              (A) The trustee agrees to the election;
              (B) If there is more than one QRT joining in the election, the trustees of each QRT joining in the election have appointed one trustee to be responsible for filing the Form 1041 for the combined electing trusts for each taxable year during the election period (filing trustee) and the filing trustee has agreed to accept that responsibility;
              (C) If there is more than one QRT, the trustees of each QRT joining in the election have agreed to allocate the tax liability of the combined electing trusts for each taxable year during the election period in a manner that reasonably reflects the tax obligations of each electing trust;
              (D) The trustee agrees to:
              (1) Timely file a Form 1041 for the electing trust(s) for each taxable year during the election period; or
              (2) If there is more than one QRT and the trustee is not the filing trustee, timely provide the filing trustee with all of the electing trust's information necessary to permit the filing trustee to file a complete, accurate, and timely Form 1041 for the combined electing trusts for each taxable year during the election period;
              (3) Insure that the electing trust's share of the tax burden is timely paid to the Secretary;
              (E) There is no executor and, to the knowledge and belief of the trustee, one will not be appointed; and
              (F) If an executor is appointed after the filing of the election form and the executor agrees to the section 645 election, the trustee will complete and file a revised election form with the executor.
              (3) Election for more than one QRT. If there is more than one QRT, the election may be made for some or all of the QRTs. If there is no executor, one trustee must be appointed by the trustees of the electing trusts to file Forms 1041 for the combined electing trusts filing as an estate during the election period.
              (d) TIN and filing requirements for a QRT—(1) Obtaining a TIN. Regardless of whether there is an executor for a related estate and regardless of whether a section 645 election will be made for the QRT, a TIN must be obtained for the QRT following the death of the decedent. See § 301.6109-1(a)(3) of this chapter. The trustee must furnish this TIN to the payors of the QRT. See § 301.6109-1(a)(5) of this chapter for the definition of payor.
              (2) Filing a Form 1041 for a QRT—(i) Option not to file a Form 1041 for a QRT for which a section 645 election will be made. If a section 645 election will be made for a QRT, the executor of the related estate, if any, and the trustee of the QRT may treat the QRT as an electing trust from the decedent's date of death until the due date for the section 645 election. Accordingly, the trustee of the QRT is not required to file a Form 1041 for the QRT for the short taxable year beginning with the decedent's date of death and ending December 31 of that year. However, if a QRT is treated as an electing trust under this paragraph from the decedent's date of death until the due date for the section 645 election but a valid section 645 election is not made for the QRT, the QRT will be subject to penalties and interest for failing to timely file a Form 1041 and pay the tax due thereon.
              (ii) Requirement to file a Form 1041 for a QRT if paragraph (d)(2)(i) of this section does not apply—(A) Requirement to file Form 1041. If the trustee of the QRT and the executor of the related estate, if any, do not treat the QRT as an electing trust as provided under paragraph (d)(2)(i) of this section, or if the trustee of the electing trust and the executor, if any, are uncertain whether a section 645 election will be made for a QRT, the trustee of the QRT must file a Form 1041 for the short taxable year beginning with the decedent's death and ending December 31 of that year (unless the QRT is not required to file a Form 1041 under section 6012 for this period).
              (B) Requirement to amend Form 1041 if a section 645 election is made—(1) If there is an executor. If there is an executor and a valid section 645 election is made for a QRT after a Form 1041 has been filed for the QRT as a trust (see paragraph (d)(2)(ii)(A) of this section), the trustee must amend the Form 1041. The QRT's items of income, deduction, and credit must be excluded from the amended Form 1041 filed under this paragraph and must be included on the Form 1041 filed for the first taxable year of the combined electing trust and related estate under paragraph (e)(2)(ii)(A) of this section.
              (2) If there is no executor. If there is no executor and a valid section 645 election is made for a QRT after a Form 1041 has been filed for the QRT as a trust (see paragraph (d)(2)(ii)(A) of this section) for the short taxable year beginning with the decedent's death and ending December 31 of that year, the trustee must file an amended return for the QRT. The amended return must be filed consistent with paragraph (e)(3) of this section and must be filed by the due date of the Form 1041 for the QRT, taking into account the trustee's election under section 645.
              (e) Tax treatment and general filing requirements of electing trust and related estate during the election period—(1) Effect of election. The section 645 election once made is irrevocable.
              (2) If there is an executor—(i) Tax treatment of the combined electing trust and related estate. If there is an executor, the electing trust is treated, during the election period, as part of the related estate for all purposes of subtitle A of the Internal Revenue Code. Thus, for example, the electing trust is treated as part of the related estate for purposes of the set-aside deduction under section 642(c)(2), the subchapter S shareholder requirements of section 1361(b)(1), and the special offset for rental real estate activities in section 469(i)(4).
              (ii) Filing requirements—(A) Filing the Form 1041 for the combined electing trust and related estate during the election period. If there is an executor, the executor files a single income tax return annually (assuming a return is required under section 6012) under the name and TIN of the related estate for the combined electing trust and the related estate. Information regarding the name and TIN of each electing trust must be provided on the Form 1041 as required by the instructions to that form. The period of limitations provided in section 6501 for assessments with respect to an electing trust and the related estate starts with the filing of the return required under this paragraph. Except as required under the separate share rules of section 663(c), for purposes of filing the Form 1041 under this paragraph and computing the tax, the items of income, deduction, and credit of the electing trust and related estate are combined. One personal exemption in the amount of $600 is permitted under section 642(b), and the tax is computed under section 1(e), taking into account section 1(h), for the combined taxable income.
              (B) Filing a Form 1041 for the electing trust is not required. Except for any final Form 1041 required to be filed under paragraph (h)(2)(i)(B) of this section, if there is an executor, the trustee of the electing trust does not file a Form 1041 for the electing trust during the election period. Although the trustee is not required to file a Form 1041 for the electing trust, the trustee of the electing trust must timely provide the executor of the related estate with all the trust information necessary to permit the executor to file a complete, accurate and timely Form 1041 for the combined electing trust and related estate. The trustee must also insure that the electing trust's share of the tax obligations of the combined electing trust and related estate is timely paid to the Secretary. In certain situations, the trustee of a QRT may be required to file a Form 1041 for the QRT's short taxable year beginning with the date of the decedent's death and ending December 31 of that year. See paragraph (d)(2) of this section.
              (iii) Application of the separate share rules—(A) Distributions to beneficiaries (other than to a share (or shares) of the combined electing trust and related estate). Under the separate share rules of section 663(c), the electing trust and related estate are treated as separate shares for purposes of computing distributable net income (DNI) and applying the distribution provisions of sections 661 and 662. Further, the electing trust share or the related estate share may each contain two or more shares. Thus, if during the taxable year, a distribution is made by the electing trust or the related estate, the DNI of the share making the distribution must be determined and the distribution provisions of sections 661 and 662 must be applied using the separately determined DNI applicable to the distributing share.
              (B) Adjustments to the DNI of the separate shares for distributions between shares to which sections 661 and 662 would apply. A distribution from one share to another share to which sections 661 and 662 would apply if made to a beneficiary other than another share of the combined electing trust and related estate affects the computation of the DNI of the share making the distribution and the share receiving the distribution. The share making the distribution reduces its DNI by the amount of the distribution deduction that it would be entitled to under section 661 (determined without regard to section 661(c)), had the distribution been made to another beneficiary, and, solely for purposes of calculating DNI, the share receiving the distribution increases its gross income by the same amount. The distribution has the same character in the hands of the recipient share as in the hands of the distributing share. The following example illustrates the provisions of this paragraph (e)(2)(iii)(B):

                Example.
                (i) A's will provides that, after the payment of debts, expenses, and taxes, the residue of A's estate is to be distributed to Trust, an electing trust. The sole beneficiary of Trust is C. The estate share has $15,000 of gross income, $5,000 of deductions, and $10,000 of taxable income and DNI for the taxable year based on the assets held in A's estate. During the taxable year, A's estate distributes $15,000 to Trust. The distribution reduces the DNI of the estate share by $10,000.
                (ii) For the same taxable year, the trust share has $25,000 of gross income and $5,000 of deductions. None of the modifications provided for under section 643(a) apply. In calculating the DNI for the trust share, the gross income of the trust share is increased by $10,000, the amount of the reduction in the DNI of the estate share as a result of the distribution to Trust. Thus, solely for purposes of calculating DNI, the trust share has gross income of $35,000, and taxable income of $30,000. Therefore, the trust share has $30,000 of DNI for the taxable year.
                (iii) During the same taxable year, Trust distributes $35,000 to C. The distribution deduction reported on the Form 1041 filed for A's estate and Trust is $30,000. As a result of the distribution by Trust to C, C must include $30,000 in gross income for the taxable year. The gross income reported on the Form 1041 filed for A's estate and Trust is $40,000.

              (iv) Application of the governing instrument requirement of section 642(c). A deduction is allowed in computing the taxable income of the combined electing trust and related estate to the extent permitted under section 642(c) for—
              (A) Any amount of the gross income of the related estate that is paid or set aside during the taxable year pursuant to the terms of the governing instrument of the related estate for a purpose specified in section 170(c); and
              (B) Any amount of gross income of the electing trust that is paid or set aside during the taxable year pursuant to the terms of the governing instrument of the electing trust for a purpose specified in section 170(c).
              (3) If there is no executor—(i) Tax treatment of the electing trust. If there is no executor, the trustee treats the electing trust, during the election period, as an estate for all purposes of subtitle A of the Internal Revenue Code. Thus, for example, an electing trust is treated as an estate for purposes of the set-aside deduction under section 642(c)(2), the subchapter S shareholder requirements of section 1361(b)(1), and the special offset for rental real estate activities under section 469(i)(4). The trustee may also adopt a taxable year other than a calendar year.
              (ii) Filing the Form 1041 for the electing trust. If there is no executor, the trustee of the electing trust must, during the election period, file a Form 1041, under the TIN obtained by the trustee under § 301.6109-1(a)(3) of this chapter upon the death of the decedent, treating the trust as an estate. If there is more than one electing trust, the Form 1041 must be filed by the filing trustee (see paragraph (c)(2)(ii)(B) of this section) under the name and TIN of the electing trust of the filing trustee. Information regarding the names and TINs of the other electing trusts must be provided on the Form 1041 as required by the instructions to that form. Any return filed in accordance with this paragraph shall be treated as a return filed for the electing trust (or trusts, if there is more than one electing trust) and not as a return filed for any subsequently discovered related estate. Accordingly, the period of limitations provided in section 6501 for assessments with respect to a subsequently discovered related estate does not start until a return is filed with respect to the related estate. See paragraph (g) of this section.
              (4) Application of the section 6654(l)(2) to the electing trust. Each electing trust and related estate (if any) is treated as a separate taxpayer for all purposes of subtitle F of the Internal Revenue Code, including, without limitation, the application of section 6654. The provisions of section 6654(l)(2)(A) relating to the two year exception to an estate's obligation to make estimated tax payments, however, will apply to each electing trust for which a section 645 election has been made.
              (f) Duration of election period—(1) In general. The election period begins on the date of the decedent's death and terminates on the earlier of the day on which both the electing trust and related estate, if any, have distributed all of their assets, or the day before the applicable date. The election does not apply to successor trusts (trusts that are distributees under the trust instrument).
              (2) Definition of applicable date—(i) Applicable date if no Form 706 “United States Estate (and Generation Skipping Transfer) Tax Return” is required to be filed. If a Form 706 is not required to be filed as a result of the decedent's death, the applicable date is the day which is 2 years after the date of the decedent's death.
              (ii) Applicable date if a Form 706 is required to be filed. If a Form 706 is required to be filed as a result of the decedent's death, the applicable date is the later of the day that is 2 years after the date of the decedent's death, or the day that is 6 months after the date of final determination of liability for estate tax. Solely for purposes of determining the applicable date under section 645, the date of final determination of liability is the earliest of the following—
              (A) The date that is six months after the issuance by the Internal Revenue Service of an estate tax closing letter, unless a claim for refund with respect to the estate tax is filed within twelve months after the issuance of the letter;
              (B) The date of a final disposition of a claim for refund, as defined in paragraph (f)(2)(iii) of this section, that resolves the liability for the estate tax, unless suit is instituted within six months after a final disposition of the claim;
              (C) The date of execution of a settlement agreement with the Internal Revenue Service that determines the liability for the estate tax;
              (D) The date of issuance of a decision, judgment, decree, or other order by a court of competent jurisdiction resolving the liability for the estate tax unless a notice of appeal or a petition for certiorari is filed within 90 days after the issuance of a decision, judgment, decree, or other order of a court; or
              (E) The date of expiration of the period of limitations for assessment of the estate tax provided in section 6501.
              (iii) Definition of final disposition of claim for refund. For purposes of paragraph (f)(2)(ii)(B) of this section, a claim for refund shall be deemed finally disposed of by the Secretary when all items have been either allowed or disallowed. If a waiver of notification with respect to disallowance is filed with respect to a claim for refund prior to disallowance of the claim, the claim for refund will be treated as disallowed on the date the waiver is filed.
              (iv) Examples. The application of this paragraph (f)(2) is illustrated by the following examples:

                Example 1. A
                died on October 20, 2002. The executor of A's estate and the trustee of Trust, an electing trust, made a section 645 election. A Form 706 is not required to be filed as a result of A's death. The applicable date is October 20, 2004, the day that is two years after A's date of death. The last day of the election period is October 19, 2004. Beginning October 20, 2004, Trust will no longer be treated and taxed as part of A's estate.

                Example 2.
                Assume the same facts as Example 1, except that a Form 706 is required to be filed as the result of A's death. The Internal Revenue Service issues an estate tax closing letter accepting the Form 706 as filed on March 15, 2005. The estate does not file a claim for refund by March 15, 2006, the day that is twelve months after the date of issuance of the estate tax closing letter. The date of final determination of liability is September 15, 2005, and the applicable date is March 15, 2006. The last day of the election period is March 14, 2006. Beginning March 15, 2006, Trust will no longer be treated and taxed as part of A's estate.

                Example 3.
                Assume the same facts as Example 1, except that a Form 706 is required to be filed as the result of A's death. The Form 706 is audited, and a notice of deficiency authorized under section 6212 is mailed to the executor of A's estate as a result of the audit. The executor files a petition in Tax Court. The Tax Court issues a decision resolving the liability for estate tax on December 14, 2005, and neither party appeals within 90 days after the issuance of the decision. The date of final determination of liability is December 14, 2005. The applicable date is June 14, 2006, the day that is six months after the date of final determination of liability. The last day of the election period is June 13, 2006. Beginning June 14, 2006, Trust will no longer be treated and taxed as part of A's estate.

              (g) Executor appointed after the section 645 election is made—(1) Effect on the election. If an executor for the related estate is not appointed until after the trustee has made a valid section 645 election, the executor must agree to the trustee's election, and the IRS must be notified of that agreement by the filing of a revised election form (completed as required by the instructions to that form) within 90 days of the appointment of the executor, for the election period to continue past the date of appointment of the executor. If the executor does not agree to the election or a revised election form is not timely filed as required by this paragraph, the election period terminates the day before the appointment of the executor. If the IRS issues other guidance after December 24, 2002 for notifying the IRS of the executor's agreement to the election, the IRS must be notified in the manner provided in that guidance for the election period to continue.
              (2) Continuation of election period—(i) Correction of returns filed before executor appointed. If the election period continues under paragraph (g)(1) of this section, the executor of the related estate and the trustee of each electing trust must file amended Forms 1041 to correct the Forms 1041 filed by the trustee before the executor was appointed. The amended Forms 1041 must be filed under the name and TIN of the electing trust and must reflect the items of income, deduction, and credit of the related estate and the electing trust. The name and TIN of the related estate must be provided on the amended Forms 1041 as required in the instructions to that Form. The amended return for the taxable year ending immediately before the executor was appointed must indicate that this Form 1041 is a final return. If the period of limitations for making assessments has expired with respect to the electing trust for any of the Forms 1041 filed by the trustee, the executor must file Forms 1041 for any items of income, deduction, and credit of the related estate that cannot be properly included on amended forms for the electing trust. The personal exemption under section 642(b) is not permitted to be taken on these Forms 1041 filed by the executor.
              (ii) Returns filed after the appointment of the executor. All returns filed by the combined electing trust and related estate after the appointment of the executor are to be filed under the name and TIN of the related estate in accordance with paragraph (e)(2) of this section. Regardless of the change in the name and TIN under which the Forms 1041 for the combined electing trust and related estate are filed, the combined electing trust and related estate will be treated as the same entity before and after the executor is appointed.
              (3) Termination of the election period. If the election period terminates under paragraph (g)(1) of this section, the executor must file Forms 1041 under the name and TIN of the estate for all taxable years of the related estate ending after the death of the decedent. The trustee of the electing trust is not required to amend any returns filed for the electing trust during the election period. Following termination of the election period, the trustee of the electing trust must obtain a new TIN. See § 301.6109-1(a)(4) of this chapter.
              (h) Treatment of an electing trust and related estate following termination of the election—(1) The share (or shares) comprising the electing trust is deemed to be distributed upon termination of the election period. On the close of the last day of the election period, the combined electing trust and related estate, if there is an executor, or the electing trust, if there is no executor, is deemed to distribute the share (or shares, as determined under section 663(c)) comprising the electing trust to a new trust in a distribution to which sections 661 and 662 apply. All items of income, including net capital gains, that are attributable to the share (or shares) comprising the electing trust are included in the calculation of the distributable net income of the electing trust and treated as distributed by the combined electing trust and related estate, if there is an executor, or by the electing trust, if there is no executor, to the new trust. The combined electing trust and related estate, if there is an executor, or the electing trust, if there is no executor, is entitled to a distribution deduction to the extent permitted under section 661 in the taxable year in which the election period terminates as a result of the deemed distribution. The new trust shall include the amount of the deemed distribution in gross income to the extent required under section 662.
              (2) Filing of the Form 1041 upon the termination of the section 645 election—(i) If there is an executor—(A) Filing the Form 1041 for the year of termination. If there is an executor, the Form 1041 filed under the name and TIN of the related estate for the taxable year in which the election terminates includes—
              (1) The items of income, deduction, and credit of the electing trust attributable to the period beginning with the first day of the taxable year of the combined electing trust and related estate and ending with the last day of the election period;
              (2) The items of income, deduction, and credit, if any, of the related estate for the entire taxable year; and
              (3) A deduction for the deemed distribution of the share (or shares) comprising the electing trust to the new trust as provided for under paragraph (h)(1) of this section.
              (B) Requirement to file a final Form 1041 under the name and TIN of the electing trust. If the electing trust terminates during the election period, the trustee of the electing trust must file a Form 1041 under the name and TIN of the electing trust and indicate that the return is a final return to notify the IRS that the electing trust is no longer in existence. The items of income, deduction, and credit of the trust are not reported on this final Form 1041 but on the appropriate Form 1041 filed for the combined electing trust and related estate.
              (ii) If there is no executor. If there is no executor, the taxable year of the electing trust closes on the last day of the election period. A Form 1041 is filed in the manner prescribed under paragraph (e)(3)(ii) of this section reporting the items of income, deduction, and credit of the electing trust for the short period ending with the last day of the election period. The Form 1041 filed under this paragraph includes a distribution deduction for the deemed distribution provided for under paragraph (h)(1) of this section. The Form 1041 must indicate that it is a final return.
              (3) Use of TINs following termination of the election—(i) If there is an executor. Upon termination of the section 645 election, a former electing trust may need to obtain a new TIN. See § 301.6109-1(a)(4) of this chapter. If the related estate continues after the termination of the election period, the related estate must continue to use the TIN assigned to the estate during the election period.
              (ii) If there is no executor. If there is no executor, the former electing trust must obtain a new TIN if the trust will continue after the termination of the election period. See § 301.6109-1(a)(4) of this chapter.
              (4) Taxable year of estate and trust upon termination of the election—(i) Estate—Upon termination of the section 645 election period, the taxable year of the estate is the same taxable year used during the election period.
              (ii) Trust. Upon termination of the section 645 election, the taxable year of the new trust is the calendar year. See section 644.
              (i) [Reserved]
              (j) Effective date. Paragraphs (a), (b), (c), (d), (f), and (g) of this section apply to trusts and estates of decedents dying on or after December 24, 2002. Paragraphs (e) and (h) of this section apply to taxable years ending on or after December 24, 2002.
              [T.D. 9032, 67 FR 78377, Dec. 24, 2002]

            trusts which distribute current income only

              § 1.651(a)-1
              Simple trusts; deduction for distributions; in general.
              Section 651 is applicable only to a trust the governing instruments of which:
              (a) Requires that the trust distribute all of its income currently for the taxable year, and
              (b) Does not provide that any amounts may be paid, permanently set aside, or used in the taxable year for the charitable, etc., purposes specified in section 642(c),
              and does not make any distribution other than of current income. A trust to which section 651 applies is referred to in this part as a “simple” trust. Trusts subject to section 661 are referred to as “complex” trusts. A trust may be a simple trust for one year and a complex trust for another year. It should be noted that under section 651 a trust qualifies as a simple trust in a taxable year in which it is required to distribute all its income currently and makes no other distributions, whether or not distributions of current income are in fact made. On the other hand a trust is not a complex trust by reason of distributions of amounts other than income unless such distributions are in fact made during the taxable year, whether or not they are required in that year.

              § 1.651(a)-2
              Income required to be distributed currently.
              (a) The determination of whether trust income is required to be distributed currently depends upon the terms of the trust instrument and the applicable local law. For this purpose, if the trust instrument provides that the trustee in determining the distributable income shall first retain a reserve for depreciation or otherwise make due allowance for keeping the trust corpus intact by retaining a reasonable amount of the current income for that purpose, the retention of current income for that purpose will not disqualify the trust from being a “simple” trust. The fiduciary must be under a duty to distribute the income currently even if, as a matter of practical necessity, the income is not distributed until after the close of the trust's taxable year. For example: Under the terms of the trust instrument, all of the income is currently distributable to A. The trust reports on the calendar year basis and as a matter of practical necessity makes distribution to A of each quarter's income on the fifteenth day of the month following the close of the quarter. The distribution made by the trust on January 15, 1955, of the income for the fourth quarter of 1954 does not disqualify the trust from treatment in 1955 under section 651, since the income is required to be distributed currently. However, if the terms of a trust require that none of the income be distributed until after the year of its receipt by the trust, the income of the trust is not required to be distributed currently and the trust is not a simple trust. For definition of the term “income” see section 643(b) and § 1.643(b)-1.
              (b) It is immaterial, for purposes of determining whether all the income is required to be distributed currently, that the amount of income allocated to a particular beneficiary is not specified in the instrument. For example, if the fiduciary is required to distribute all the income currently, but has discretion to “sprinkle” the income among a class of beneficiaries, or among named beneficiaries, in such amount as he may see fit, all the income is required to be distributed currently, even though the amount distributable to a particular beneficiary is unknown until the fiduciary has exercised his discretion.

              (c) If in one taxable year of a trust its income for that year is required or permitted to be accumulated, and in another taxable year its income for the year is required to be distributed currently (and no other amounts are distributed), the trust is a simple trust for the latter year. For example, a trust under which income may be accumulated until a beneficiary is 21 years old, and thereafter must be distributed currently, is a simple trust for taxable years beginning after the beneficiary reaches the age of 21 years in which no other amounts are distributed.

              (d) If a trust distributes property in kind as part of its requirement to distribute currently all the income as defined under section 643(b) and the applicable regulations, the trust shall be treated as having sold the property for its fair market value on the date of distribution. If no amount in excess of the amount of income as defined under section 643(b) and the applicable regulations is distributed by the trust during the year, the trust will qualify for treatment under section 651 even though property in kind was distributed as part of a distribution of all such income. This paragraph (d) applies for taxable years of trusts ending after January 2, 2004.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960, as amended by T.D. 9102, 69 FR 20, Jan. 2, 2004]

              § 1.651(a)-3
              Distribution of amounts other than income.
              (a) A trust does not qualify for treatment under section 651 for any taxable year in which it actually distributes corpus. For example, a trust which is required to distribute all of its income currently would not qualify as a simple trust under section 651 in the year of its termination since in that year actual distributions of corpus would be made.
              (b) A trust, otherwise qualifying under section 651, which may make a distribution of corpus in the discretion of the trustee, or which is required under the terms of its governing instrument to make a distribution of corpus upon the happening of a specified event, will be disqualified for treatment under section 651 only for the taxable year in which an actual distribution of corpus is made. For example: Under the terms of a trust, which is required to distribute all of its income currently, half of the corpus is to be distributed to beneficiary A when he becomes 30 years of age. The trust reports on the calendar year basis. On December 28, 1954, A becomes 30 years of age and the trustee distributes half of the corpus of the trust to him on January 3, 1955. The trust will be disqualified for treatment under section 651 only for the taxable year 1955, the year in which an actual distribution of corpus is made.
              (c) See section 661 and the regulations thereunder for the treatment of trusts which distribute corpus or claim the charitable contributions deduction provided by section 642(c).

              § 1.651(a)-4
              Charitable purposes.
              A trust is not considered to be a trust which may pay, permanently set aside, or use any amount for charitable, etc., purposes for any taxable year for which it is not allowed a charitable, etc., deduction under section 642(c). Therefore, a trust with a remainder to a charitable organization is not disqualified for treatment as a simple trust if either (a) the remainder is subject to a contingency, so that no deduction would be allowed for capital gains or other amounts added to corpus as amounts permanently set aside for a charitable, etc., purpose under section 642 (c), or (b) the trust receives no capital gains or other income added to corpus for the taxable year for which such a deduction would be allowed.

              § 1.651(a)-5
              Estates.
              Subpart B has no application to an estate.

              § 1.651(b)-1
              Deduction for distributions to beneficiaries.

              In computing its taxable income, a simple trust is allowed a deduction for the amount of income which is required under the terms of the trust instrument to be distributed currently to beneficiaries. If the amount of income required to be distributed currently exceeds the distributable net income, the deduction allowable to the trust is limited to the amount of the distributable net income. For this purpose the amount of income required to be distributed currently, or distributable net income, whichever is applicable, does not include items of trust income (adjusted for deductions allocable thereto) which are not included in the gross income of the trust. For determination of the character of the income required to be distributed currently, see § 1.652(b)-2. Accordingly, for the purposes of determining the deduction allowable to the trust under section 651, distributable net income is computed without the modifications specified in paragraphs (5), (6), and (7) of section 643(a), relating to tax-exempt interest, foreign income, and excluded dividends. For example: Assume that the distributable net income of a trust as computed under section 643(a) amounts to $99,000 but includes nontaxable income of $9,000. Then distributable net income for the purpose of determining the deduction allowable under section 651 is $90,000 ($99,000 less $9,000 nontaxable income).

              § 1.652(a)-1
              Simple trusts; inclusion of amounts in income of beneficiaries.

              Subject to the rules in §§ 1.652(a)-2 and 1.652(b)-1, a beneficiary of a simple trust includes in his gross income for the taxable year the amounts of income required to be distributed to him for such year, whether or not distributed. Thus, the income of a simple trust is includible in the beneficiary's gross income for the taxable year in which the income is required to be distributed currently even though, as a matter of practical necessity, the income is not distributed until after the close of the taxable year of the trust. See § 1.642(a)(3)-2 with respect to time of receipt of dividends. See § 1.652(c)-1 for treatment of amounts required to be distributed where a beneficiary and the trust have different taxable years. The term income required to be distributed currently includes income required to be distributed currently which is in fact used to discharge or satisfy any person's legal obligation as that term is used in § 1.662(a)-4.

              § 1.652(a)-2
              Distributions in excess of distributable net income.
              If the amount of income required to be distributed currently to beneficiaries exceeds the distributable net income of the trust (as defined in section 643(a)), each beneficiary includes in his gross income an amount equivalent to his proportionate share of such distributable net income. Thus, if beneficiary A is to receive two-thirds of the trust income and B is to receive one-third, and the income required to be distributed currently is $99,000, A will receive $66,000 and B, $33,000. However, if the distributable net income, as determined under section 643(a) is only $90,000, A will include two-thirds ($60,000) of that sum in his gross income, and B will include one-third ($30,000) in his gross income. See §§ 1.652(b)-1 and 1.652(b)-2, however, for amounts which are not includible in the gross income of a beneficiary because of their tax-exempt character.

              § 1.652(b)-1
              Character of amounts.
              In determining the gross income of a beneficiary, the amounts includible under § 1.652(a)-1 have the same character in the hands of the beneficiary as in the hands of the trust. For example, to the extent that the amounts specified in § 1.652(a)-1 consist of income exempt from tax under section 103, such amounts are not included in the beneficiary's gross income. Similarly, dividends distributed to a beneficiary retain their original character in the beneficiary's hands for purposes of determining the availability to the beneficiary of the dividends received credit under section 34 (for dividends received on or before December 31, 1964) and the dividend exclusion under section 116. Also, to the extent that the amounts specified in § 1.652(a)-1 consist of “earned income” in the hands of the trust under the provisions of section 1348 such amount shall be treated under section 1348 as “earned income” in the hands of the beneficiary. Similarly, to the extent such amounts consist of an amount received as a part of a lump sum distribution from a qualified plan and to which the provisions of section 72(n) would apply in the hands of the trust, such amount shall be treated as subject to such section in the hands of the beneficiary except where such amount is deemed under section 666(a) to have been distributed in a preceding taxable year of the trust and the partial tax described in section 668(a)(2) is determined under section 668(b)(1)(B). The tax treatment of amounts determined under § 1.652(a)-1 depends upon the beneficiary's status with respect to them not upon the status of the trust. Thus, if a beneficiary is deemed to have received foreign income of a foreign trust, the includibility of such income in his gross income depends upon his taxable status with respect to that income.
              [T.D. 7204, 37 FR 17134, Aug. 25, 1972]

              § 1.652(b)-2
              Allocation of income items.
              (a) The amounts specified in § 1.652(a)-1 which are required to be included in the gross income of a beneficiary are treated as consisting of the same proportion of each class of items entering into distributable net income of the trust (as defined in section 643(a)) as the total of each class bears to such distributable net income, unless the terms of the trust specifically allocate different classes of income to different beneficiaries, or unless local law requires such an allocation. For example: Assume that under the terms of the governing instrument, beneficiary A is to receive currently one-half of the trust income and beneficiaries B and C are each to receive currently one-quarter, and the distributable net income of the trust (after allocation of expenses) consists of dividends of $10,000, taxable interest of $10,000, and tax-exempt interest of $4,000. A will be deemed to have received $5,000 of dividends, $5,000 of taxable interest, and $2,000 of tax-exempt interest; B and C will each be deemed to have received $2,500 of dividends, $2,500 of taxable interest, and $1,000 of tax-exempt interest. However, if the terms of the trust specifically allocate different classes of income to different beneficiaries, entirely or in part, or if local law requires such an allocation, each beneficiary will be deemed to have received those items of income specifically allocated to him.
              (b) The terms of the trust are considered specifically to allocate different classes of income to different beneficiaries only to the extent that the allocation is required in the trust instrument, and only to the extent that it has an economic effect independent of the income tax consequences of the allocation. For example:
              (1) Allocation pursuant to a provision in a trust instrument granting the trustee discretion to allocate different classes of income to different beneficiaries is not a specific allocation by the terms of the trust.
              (2) Allocation pursuant to a provision directing the trustee to pay all of one income to A, or $10,000 out of the income to A, and the balance of the income to B, but directing the trustee first to allocate a specific class of income to A's share (to the extent there is income of that class and to the extent it does not exceed A's share) is not a specific allocation by the terms of the trust.
              (3) Allocation pursuant to a provision directing the trustee to pay half the class of income (whatever it may be) to A, and the balance of the income to B, is a specific allocation by the terms of the trust.

              § 1.652(b)-3
              Allocation of deductions.
              Items of deduction of a trust that enter into the computation of distributable net income are to be allocated among the items of income in accordance with the following principles:
              (a) All deductible items directly attributable to one class of income (except dividends excluded under section 116) are allocated thereto. For example, repairs to, taxes on, and other expenses directly attributable to the maintenance of rental property or the collection of rental income are allocated to rental income. See § 1.642(e)-1 for treatment of depreciation of rental property. Similarly, all expenditures directly attributable to a business carried on by a trust are allocated to the income from such business. If the deductions directly attributable to a particular class of income exceed that income, the excess is applied against other classes of income in the manner provided in paragraph (d) of this section.

              (b) The deductions which are not directly attributable to a specific class of income may be allocated to any item of income (including capital gains) included in computing distributable net income, but a portion must be allocated to nontaxable income (except dividends excluded under section 116) pursuant to section 265 and the regulations thereunder. For example, if the income of a trust is $30,000 (after direct expenses), consisting equally of $10,000 of dividends, tax-exempt interest, and rents, and income commissions amount to $3,000, one-third ($1,000) of such commissions should be allocated to tax-exempt interest, but the balance of $2,000 may be allocated to the rents or dividends in such proportions as the trustee may elect. The fact that the governing instrument or applicable local law treats certain items of deduction as attributable to corpus or to income not included in distributable net income does not affect allocation under this paragraph. For instance, if in the example set forth in this paragraph the trust also had capital gains which are allocable to corpus under the terms of the trust instrument, no part of the deductions would be allocable thereto since the capital gains are excluded from the computation of distributable net income under section 643(a)(3).
              (c) Examples of expenses which are considered as not directly attributable to a specific class of income are trustee's commissions, the rental of safe deposit boxes, and State income and personal property taxes.
              (d) To the extent that any items of deduction which are directly attributable to a class of income exceed that class of income, they may be allocated to any other class of income (including capital gains) included in distributable net income in the manner provided in paragraph (b) of this section, except that any excess deductions attributable to tax-exempt income (other than dividends excluded under section 116) may not be offset against any other class of income. See section 265 and the regulations thereunder. Thus, if the trust has rents, taxable interest, dividends, and tax-exempt interest, and the deductions directly attributable to the rents exceed the rental income, the excess may be allocated to the taxable interest or dividends in such proportions as the fiduciary may elect. However, if the excess deductions are attributable to the tax-exempt interest, they may not be allocated to either the rents, taxable interest, or dividends.

              § 1.652(c)-1
              Different taxable years.
              If a beneficiary has a different taxable year (as defined in section 441 or 442) from the taxable year of the trust, the amount he is required to include in gross income in accordance with section 652 (a) and (b) is based on the income of the trust for any taxable year or years ending with or within his taxable year. This rule applies to taxable years of normal duration as well as to so-called short taxable years. Income of the trust for its taxable year or years is determined in accordance with its method of accounting and without regard to that of the beneficiary.

              § 1.652(c)-2
              Death of individual beneficiaries.
              If income is required to be distributed currently to a beneficiary, by a trust for a taxable year which does not end with or within the last taxable year of a beneficiary (because of the beneficiary's death), the extent to which the income is included in the gross income of the beneficiary for his last taxable year or in the gross income of his estate is determined by the computations under section 652 for the taxable year of the trust in which his last taxable year ends. Thus, the distributable net income of the taxable year of the trust determines the extent to which the income required to be distributed currently to the beneficiary is included in his gross income for his last taxable year or in the gross income of his estate. (Section 652(c) does not apply to such amounts.) The gross income for the last taxable year of a beneficiary on the cash basis includes only income actually distributed to the beneficiary before his death. Income required to be distributed, but in fact distributed to his estate, is included in the gross income of the estate as income in respect of a decedent under section 691. See paragraph (e) of § 1.663(c)-3 with respect to separate share treatment for the periods before and after the decedent's death. If the trust does not qualify as a simple trust for the taxable year of the trust in which the last taxable year of the beneficiary ends, see section 662(c) and § 1.662(c)-2.

              § 1.652(c)-3
              Termination of existence of other beneficiaries.
              If the existence of a beneficiary which is not an individual terminates, the amount to be included under section 652(a) in its gross income for its last taxable year is computed with reference to §§ 1.652(c)-1 and 1.652(c)-2 as if the beneficiary were a deceased individual, except that income required to be distributed prior to the termination but actually distributed to the beneficiary's successor in interest is included in the beneficiary's income for its last taxable year.

              § 1.652(c)-4
              Illustration of the provisions of sections 651 and 652.

              The rules applicable to a trust required to distribute all of its income currently to its beneficiaries may be illustrated by the following example:

                Example.
                (a) Under the terms of a simple trust all of the income is to be distributed equally to beneficiaries A and B and capital gains are to be allocated to corpus. The trust and both beneficiaries file returns on the calendar year basis. No provision is made in the governing instrument with respect to depreciation. During the taxable year 1955, the trust had the following items of income and expense:

                    Rents
                    $25,000

                    Dividends of domestic corporations
                    50,000

                    Tax-exempt interest on municipal bonds
                    25,000

                    Long-term capital gains
                    15,000

                    Taxes and expenses directly attributable to rents
                    5,000

                    Trustee's commissions allocable to income account
                    2,600

                    Trustee's commissions allocable to principal account
                    1,300

                    Depreciation
                    5,000

                (b) The income of the trust for fiduciary accounting purposes is $92,400, computed as follows:

                    Rents
                    $25,000

                    Dividends
                    50,000

                    Tax-exempt interest
                    25,000

                    Total
                    100,000

                    Deductions:

                    Expenses directly attributable to rental income
                    $5,000

                    Trustee's commissions allocable to income account
                    2,600

                    7,600

                    Income computed under section 643(b)
                    92,400

                One-half ($46,200) of the income of $92,400 is currently distributable to each beneficiary.
                (c) The distributable net income of the trust computed under section 643(a) is $91,100, determined as follows (cents are disregarded in the computation):

                    Rents
                    $25,000

                    Dividends
                    50,000

                    Tax-exempt interest
                    $25,000

                    Less: Expenses allocable thereto (25,000/100,000 × $3,900)
                    975

                    ————
                    24,025

                    Total

                    99,025

                    Deductions:

                    Expenses directly attributable to rental income
                    $5,000

                    Trustee's commissions ($3,900 less $975 allocable to tax-exempt interest)
                    2,925

                    ————
                    7,925

                    Distributable net income

                    91,100

                In computing the distributable net income of $91,100, the taxable income of the trust was computed with the following modifications: No deductions were allowed for distributions to the beneficiaries and for personal exemption of the trust (section 643(a) (1) and (2)); capital gains were excluded and no deduction under section 1202 (relating to the 50-percent deduction for long-term capital gains) was taken into account (section 643(a)(3)); the tax-exempt interest (as adjusted for expenses) and the dividend exclusion of $50 were included (section 643(a) (5) and (7)). Since all of the income of the trust is required to be currently distributed, no deduction is allowable for depreciation in the absence of specific provisions in the governing instrument providing for the keeping of the trust corpus intact. See section 167(h) and the regulations thereunder.
                (d) The deduction allowable to the trust under section 651(a) for distributions to the beneficiaries is $67,025, computed as follows:

                    Distributable net income computed under section 643(a) (see paragraph (c))
                    $91,100

                    Less:

                    Tax-exempt interest as adjusted
                    $24,025

                    Dividend exclusion
                    50

                    ————
                    24,075

                    Distributable net income as determined under section 651(b)
                    67,025

                Since the amount of the income ($92,400) required to be distributed currently by the trust exceeds the distributable net income ($67,025) as computed under section 651(b), the deduction allowable under section 651(a) is limited to the distributable net income of $67,025.
                (e) The taxable income of the trust is $7,200 computed as follows:

                    Rents
                    $25,000

                    Dividends ($50,000 less $50 exclusion)
                    49,950

                    Long-term capital gains
                    15,000

                    Gross income
                    89,950

                    Deductions:

                    Rental expenses
                    $5,000

                    Trustee's commissions
                    2,925

                    Capital gain deduction
                    7,500

                    Distributions to beneficiaries
                    67,025

                    Personal exemption
                    300

                    ————
                    82,750

                    Taxable income

                    7,200

                The trust is not allowed a deduction for the portion ($975) of the trustee's commissions allocable to tax-exempt interest in computing its taxable income.

                (f) In determining the character of the amounts includible in the gross income of A and B, it is assumed that the trustee elects to allocate to rents the expenses not directly attributable to a specific item of income other than the portion ($975) of such expenses allocated to tax-exempt interest. The allocation of expenses among the items of income is shown below:

                    Rents
                    Dividends
                    Tax-exempt interest
                    Total

                    Income for trust accounting purposes
                    $25,000
                    $50,000
                    $25,000
                    $100,000

                    Less:

                    Rental expenses
                    5,000

                    5,000

                    Trustee's commissions
                    2,925

                    975
                    3,900

                    Total deductions
                    7,925
                    0
                    975
                    8,900

                    Character of amounts in the hands of the beneficiaries
                    17,075
                    50,000
                    24,025

                      1 91,100

                    1 Distributable net income.

                Inasmuch as the income of the trust is to be distributed equally to A and B, each is deemed to have received one-half of each item of income; that is, rents of $8,537.50, dividends of $25,000, and tax-exempt interest of $12,012.50. The dividends of $25,000 allocated to each beneficiary are to be aggregated with his other dividends (if any) for purposes of the dividend exclusion provided by section 116 and the dividend received credit allowed under section 34. Also, each beneficiary is allowed a deduction of $2,500 for depreciation of rental property attributable to the portion (one-half) of the income of the trust distributed to him.

              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6712, 29 FR 3655, Mar. 24, 1964]

            estates and trusts which may accumulate income or which distribute corpus

              § 1.661(a)-1
              Estates and trusts accumulating income or distributing corpus; general.
              Subpart C, part I, subchapter J, chapter 1 of the Code, is applicable to all decedents' estates and their beneficiaries, and to trusts and their beneficiaries other than trusts subject to the provisions of subpart B of such part I (relating to trusts which distribute current income only, or “simple” trusts). A trust which is required to distribute amounts other than income during the taxable year may be subject to subpart B, and not subpart C, in the absence of an actual distribution of amounts other than income during the taxable year. See §§ 1.651(a)-1 and 1.651(a)-3. A trust to which subpart C is applicable is referred to as a “complex” trust in this part. Section 661 has no application to amounts excluded under section 663(a).

              § 1.661(a)-2
              Deduction for distributions to beneficiaries.
              (a) In computing the taxable income of an estate or trust there is allowed under section 661(a) as a deduction for distributions to beneficiaries the sum of:
              (1) The amount of income for the taxable year which is required to be distributed currently, and
              (2) Any other amounts properly paid or credited or required to be distributed for such taxable year.
              However, the total amount deductible under section 661(a) cannot exceed the distributable net income as computed under section 643(a) and as modified by section 661(c). See § 1.661(c)-1.
              (b) The term income required to be distributed currently includes any amount required to be distributed which may be paid out of income or corpus (such as an annuity), to the extent it is paid out of income for the taxable year. See § 1.651(a)-2 which sets forth additional rules which are applicable in determining whether income of an estate or trust is required to be distributed currently.
              (c) The term any other amounts properly paid, credited, or required to be distributed includes all amounts properly paid, credited, or required to be distributed by an estate or trust during the taxable year other than income required to be distributed currently. Thus, the term includes the payment of an annuity to the extent it is not paid out of income for the taxable year, and a distribution of property in kind (see paragraph (f) of this section). However, see section 663(a) and regulations thereunder for distributions which are not included. Where the income of an estate or trust may be accumulated or distributed in the discretion of the fiduciary, or where the fiduciary has a power to distribute corpus to a beneficiary, any such discretionary distribution would qualify under section 661(a)(2). The term also includes an amount applied or distributed for the support of a dependent of a grantor or of a trustee or cotrustee under the circumstances described in section 677(b) or section 678(c) out of corpus or out of other than income for the taxable year.
              (d) The terms income required to be distributed currently and any other amounts properly paid or credited or required to be distributed also include any amount used to discharge or satisfy any person's legal obligation as that term is used in § 1.662(a)-4.
              (e) The terms income required to be distributed currently and any other amounts properly paid or credited or required to be distributed include amounts paid, or required to be paid, during the taxable year pursuant to a court order or decree or under local law, by a decedent's estate as an allowance or award for the support of the decedent's widow or other dependent for a limited period during the administration of the estate. The term any other amounts properly paid or credited or required to be distributed does not include the value of any interest in real estate owned by a decedent, title to which under local law passes directly from the decedent to his heirs or devisees.
              (f) Gain or loss is realized by the trust or estate (or the other beneficiaries) by reason of a distribution of property in kind if the distribution is in satisfaction of a right to receive a distribution of a specific dollar amount, of specific property other than that distributed, or of income as defined under section 643(b) and the applicable regulations, if income is required to be distributed currently. In addition, gain or loss is realized if the trustee or executor makes the election to recognize gain or loss under section 643(e). This paragraph applies for taxable years of trusts and estates ending after January 2, 2004.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960, as amended by T.D. 7287, 38 FR 26912, Sept. 27, 1973; T.D. 9102, 69 FR 20, Jan. 2, 2004]

              § 1.661(b)-1
              Character of amounts distributed; in general.
              In the absence of specific provisions in the governing instrument for the allocation of different classes of income, or unless local law requires such an allocation, the amount deductible for distributions to beneficiaries under section 661(a) is treated as consisting of the same proportion of each class of items entering into the computation of distributable net income as the total of each class bears to the total distributable net income. For example, if a trust has distributable net income of $20,000, consisting of $10,000 each of taxable interest and royalties and distributes $10,000 to beneficiary A, the deduction of $10,000 allowable under section 661(a) is deemed to consist of $5,000 each of taxable interest and royalties, unless the trust instrument specifically provides for the distribution or accumulation of different classes of income or unless local law requires such an allocation. See also § 1.661(c)-1.

              § 1.661(b)-2
              Character of amounts distributed when charitable contributions are made.
              In the application of the rule stated in § 1.661(b)-1, the items of deduction which enter into the computation of distributable net income are allocated among the items of income which enter into the computation of distributable net income in accordance with the rules set forth in § 1.652(b)-3, except that, in the absence of specific provisions in the governing instrument, or unless local law requires a different apportionment, amounts paid, permanently set aside, or to be used for the charitable, etc., purposes specified in section 642(c) are first ratably apportioned among each class of items of income entering into the computation of the distributable net income of the estate or trust, in accordance with the rules set out in paragraph (b) of § 1.643(a)-5.

              § 1.661(c)-1
              Limitation on deduction.

              An estate or trust is not allowed a deduction under section 661(a) for any amount which is treated under section 661(b) as consisting of any item of distributable net income which is not included in the gross income of the estate or trust. For example, if in 1962, a trust, which reports on the calendar year basis, has distributable net income of $20,000, which is deemed to consist of $10,000 of dividends and $10,000 of tax-exempt interest, and distributes $10,000 to beneficiary A, the deduction allowable under section 661(a) (computed without regard to section 661(c)) would amount to $10,000 consisting of $5,000 of dividends and $5,000 of tax-exempt interest. The deduction actually allowable under section 661(a) as limited by section 661(c) is $4,975, since no deduction is allowable for the $5,000 of tax-exempt interest and the $25 deemed distributed out of the $50 of dividends excluded under section 116, items of distributable net income which are not included in the gross income of the estate or trust.
              [T.D. 6777, 29 FR 17809, Dec. 16, 1964]

              § 1.661(c)-2
              Illustration of the provisions of section 661.

              The provisions of section 661 may be illustrated by the following example:

                Example.

                (a) Under the terms of a trust, which reports on the calendar year basis, $10,000 a year is required to be paid out of income to a designated charity. The balance of the income may, in the trustee's discretion, be accumulated or distributed to beneficiary A. Expenses are allocable against income and the trust instrument requires a reserve for depreciation. During the taxable year 1955 the trustee contributes $10,000 to charity and in his discretion distributes $15,000 of income to A. The trust has the following items of income and expense for the taxable year 1955:

                  Dividends
                  $10,000
                  Partially tax-exempt interest
                  10,000
                  Fully tax-exempt interest
                  10,000
                  Rents
                  20,000
                  Rental expenses
                  2,000
                  Depreciation of rental property
                  3,000
                  Trustee's commissions
                  5,000

                (b) The income of the trust for fiduciary accounting purposes is $40,000, computed as follows:

                    Dividends
                    $10,000

                    Partially tax-exempt interest
                    10,000

                    Fully tax-exempt interest
                    10,000

                    Rents
                    20,000

                    Total
                    50,000

                    Less:

                    Rental expenses
                    $2,000

                    Depreciation
                    3,000

                    Trustee's commissions
                    5,000

                    10,000

                    Income as computed under section 643(b)
                    40,000

                (c) The distributable net income of the trust as computed under section 643(a) is $30,000, determined as follows:

                    Rents

                    $20,000

                    Dividends

                    10,000

                    Partially tax-exempt interest

                    10,000

                    Fully tax-exempt interest

                    $10,000

                    Less:

                    Expenses allocable thereto (10,000/50,000 × $5,000)
                    $1,000

                    Charitable contributions allocable thereto (10,000/50,000 × $10,000)
                    2,000

                    3,000

                    7,000

                    Total

                    47,000

                    Deductions:

                    Rental expenses

                    2,000

                    Depreciation of rental property

                    3,000

                    Trustee's commissions ($5,000 less $1,000 allocated to tax-exempt interest)

                    4,000

                    Charitable contributions ($10,000 less $2,000 allocated to tax-exempt interest)

                    8,000

                    17,000

                    Distributable net income (section 643(a))

                    30,000

                (d) The character of the amounts distributed under section 661(a), determined in accordance with the rules prescribed in §§ 1.661(b)-1 and 1.661(b)-2 is shown by the following table (for the purpose of this allocation, it is assumed that the trustee elected to allocate the trustee's commissions to rental income except for the amount required to be allocated to tax-exempt interest):

                    Rental income
                    Taxable dividends
                    Excluded dividends
                    Partially tax-exempt interest
                    Tax-exempt interest
                    Total

                    Trust income
                    $20,000
                    $9,950
                    $50
                    $10,000
                    $10,000
                    $50,000

                    Less:

                    Charitable contributions
                    4,000
                    2,000

                    2,000
                    2,000
                    10,000

                    Rental expenses
                    2,000

                    2,000

                    Depreciation
                    3,000

                    3,000

                    Trustee's commissions
                    4,000

                    1,000
                    5,000

                    Total deductions
                    13,000
                    2,000
                    0
                    2,000
                    3,000
                    20,000

                    Distributable net income
                    7,000
                    7,950
                    50
                    8,000
                    7,000
                    30,000

                    Amounts deemed distributed under section 661(a) before applying the limitation of section 661(c)
                    3,500
                    3,975
                    25
                    4,000
                    3,500
                    15,000

                In the absence of specific provisions in the trust instrument for the allocation of different classes of income, the charitable contribution is deemed to consist of a pro rata portion of the gross amount of each items of income of the trust (except dividends excluded under section 116) and the trust is deemed to have distributed to A a pro rata portion (one-half) of each item of income included in distributable net income.
                (e) The taxable income of the trust is $11,375 computed as follows:

                    Rental income
                    $20,000

                    Dividends ($10,000 less $50 exclusion)
                    9,950

                    Partially tax-exempt interest
                    10,000

                    Gross income
                    39,950

                    Deductions:

                    Rental expenses
                    $2,000

                    Depreciation of rental property
                    3,000

                    Trustee's commissions
                    4,000

                    Charitable contributions
                    8,000

                    Distributions to A
                    11,475

                    Personal exemption
                    100

                    28,575

                    Taxable income
                    11,375

                In computing the taxable income of the trust no deduction is allowable for the portions of the charitable contributions deduction ($2,000) and trustee's commissions ($1,000) which are treated under section 661(b) as attributable to the tax-exempt interest excludable from gross income. Also, of the dividends of $4,000 deemed to have been distributed to A under section 661(a), $25 (25/50ths of $50) is deemed to have been distributed from the excluded dividends and is not an allowable deduction to the trust. Accordingly, the deduction allowable under section 661 is deemed to be composed of $3,500 rental income, $3,975 of dividends, and $4,000 partially tax-exempt interest. No deduction is allowable for the portion of tax-exempt interest or for the portion of the excluded dividends deemed to have been distributed to the beneficiary.
                (f) The trust is entitled to the credit allowed by section 34 with respect to dividends of $5,975 ($9,950 less $3,975 distributed to A) included in gross income. Also, the trust is allowed the credit provided by section 35 with respect to partially tax-exempt interest of $6,000 ($10,000 less $4,000 deemed distributed to A) included in gross income.
                (g) Dividends of $4,000 allocable to A are to be aggregated with his other dividends (if any) for purposes of the dividend exclusion under section 116 and the dividend received credit under section 84.

              § 1.662(a)-1
              Inclusion of amounts in gross income of beneficiaries of estates and complex trusts; general.
              There is included in the gross income of a beneficiary of an estate or complex trust the sum of:
              (a) Amounts of income required to be distributed currently to him, and
              (b) All other amounts properly paid, credited, or required to be distributed to him
              by the estate or trust. The preceding sentence is subject to the rules contained in § 1.662(a)-2 (relating to currently distributable income), § 1.662(a)-3 (relating to other amounts distributed), and §§ 1.662(b)-1 and 1.662(b)-2 (relating to character of amounts). Section 662 has no application to amounts excluded under section 663(a).

              § 1.662(a)-2
              Currently distributable income.

              (a) There is first included in the gross income of each beneficiary under section 662(a)(1) the amount of income for the taxable year of the estate or trust required to be distributed currently to him, subject to the provisions of paragraph (b) of this section. Such amount is included in the beneficiary's gross income whether or not it is actually distributed.

              (b) If the amount of income required to be distributed currently to all beneficiaries exceeds the distributable net income (as defined in section 643(a) but computed without taking into account the payment, crediting, or setting aside of an amount for which a charitable contributions deduction is allowable under section 642(c)) of the estate or trust, then there is included in the gross income of each beneficiary an amount which bears the same ratio to distributable net income (as so computed) as the amount of income required to be distributed currently to the beneficiary bears to the amount required to be distributed currently to all beneficiaries.
              (c) The phrase the amount of income for the taxable year required to be distributed currently includes any amount required to be paid out of income or corpus to the extent the amount is satisfied out of income for the taxable year. Thus, an annuity required to be paid in all events (either out of income or corpus) would qualify as income required to be distributed currently to the extent there is income (as defined in section 643(b)) not paid, credited, or required to be distributed to other beneficiaries for the taxable year. If an annuity or a portion of an annuity is deemed under this paragraph to be income required to be distributed currently, it is treated in all respects in the same manner as an amount of income actually required to be distributed currently. The phrase the amount of income for the taxable year required to be distributed currently also includes any amount required to be paid during the taxable year in all events (either out of income or corpus) pursuant to a court order or decree or under local law, by a decedent's estate as an allowance or award for the support of the decedent's widow or other dependent for a limited period during the administration of the estate to the extent there is income (as defined in section 643(b)) of the estate for the taxable year not paid, credited, or required to be distributed to other beneficiaries.
              (d) If an annuity is paid, credited, or required to be distributed tax free, that is, under a provision whereby the executor or trustee will pay the income tax of the annuitant resulting from the receipt of the annuity, the payment of or for the tax by the executor or trustee will be treated as income paid, credited, or required to be distributed currently to the extent it is made out of income.

              (e) The application of the rules stated in this section may be illustrated by the following examples:

                Example 1.
                (1) Assume that under the terms of the trust instrument $5,000 is to be paid to X charity out of income each year; that $20,000 of income is currently distributable to A; and that an annuity of $12,000 is to be paid to B out of income or corpus. All expenses are charges against income and capital gains are allocable to corpus. During the taxable year the trust had income of $30,000 (after the payment of expenses) derived from taxable interest and made the payments to X charity and distributions to A and B as required by the governing instrument.
                (2) The amounts treated as distributed currently under section 662(a)(1) total $25,000 ($20,000 to A and $5,000 to B). Since the charitable contribution is out of income the amount of income available for B's annuity is only $5,000. The distributable net income of the trust computed under section 643(a) without taking into consideration the charitable contributions deduction of $5,000 as provided by section 661(a)(1), is $30,000. Since the amounts treated as distributed currently of $25,000 do not exceed the distributable net income (as modified) of $30,000, A is required to include $20,000 in his gross income and B is required to include $5,000 in his gross income under section 662(a)(1).

                Example 2.

                Assume the same facts as in paragraph (1) of example 1, except that the trust has, in addition, $10,000 of administration expenses, commissions, etc., chargeable to corpus. The amounts treated as distributed currently under section 662(a)(1) total $25,000 ($20,000 to A and $5,000 to B), since trust income under section 643(b) remains the same as in example 1. Distributable net income of the trust computed under section 643(a) but without taking into account the charitable contributions deduction of $5,000 as provided by section 662(a)(1) is only $20,000. Since the amounts treated as distributed currently of $25,000 exceed the distributable net income (as so computed) of $20,000, A is required to include $16,000 (20,000/25,000 of $20,000) in his gross income and B is required to include $4,000 (5,000/25,000 of $20,000) in his gross income under section 662(a)(1). Because A and B are beneficiaries of amounts of income required to be distributed currently, they do not benefit from the reduction of distributable net income by the charitable contributions deduction.

              [T.D. 6500, 25 FR 11814, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960, as amended by T.D. 7287, 38 FR 26912, Sept. 27, 1973]

              § 1.662(a)-3
              Other amounts distributed.
              (a) There is included in the gross income of a beneficiary under section 662(a)(2) any amount properly paid, credited, or required to be distributed to the beneficiary for the taxable year, other than (1) income required to be distributed currently, as determined under § 1.662(a)-2, (2) amounts excluded under section 663(a) and the regulations thereunder, and (3) amounts in excess of distributable net income (see paragraph (c) of this section). An amount which is credited or required to be distributed is included in the gross income of a beneficiary whether or not it is actually distributed.
              (b) Some of the payments to be included under paragraph (a) of this section are: (1) A distribution made to a beneficiary in the discretion of the fiduciary; (2) a distribution required by the terms of the governing instrument upon the happening of a specified event; (3) an annuity which is required to be paid in all events but which is payable only out of corpus; (4) a distribution of property in kind (see paragraph (f) of § 1.661(a)-2); (5) an amount applied or distributed for the support of a dependent of a grantor or a trustee or cotrustee under the circumstances specified in section 677(b) or section 678(c) out of corpus or out of other than income for the taxable year; and (6) an amount required to be paid during the taxable year pursuant to a court order or decree or under local law, by a decedent's estate as an allowance or award for the support of the decedent's widow or other dependent for a limited period during the administration of the estate which is payable only out of corpus of the estate under the order or decree or local law.
              (c) If the sum of the amounts of income required to be distributed currently (as determined under § 1.662(a)-2) and other amounts properly paid, credited, or required to be distributed (as determined under paragraph (a) of this section) exceeds distributable net income (as defined in section 643(a)), then such other amounts properly paid, credited, or required to be distributed are included in gross income of the beneficiary but only to the extent of the excess of such distributable net income over the amounts of income required to be distributed currently. If the other amounts are paid, credited, or required to be distributed to more than one beneficiary, each beneficiary includes in gross income his proportionate share of the amount includible in gross income pursuant to the preceding sentence. The proportionate share is an amount which bears the same ratio to distributable net income (reduced by amounts of income required to be distributed currently) as the other amounts (as determined under paragraphs (a) and (d) of this section) distributed to the beneficiary bear to the other amounts distributed to all beneficiaries. For treatment of excess distributions by trusts, see sections 665 to 668, inclusive, and the regulations thereunder.

              (d) The application of the rules stated in this section may be illustrated by the following example:

                Example.
                The terms of a trust require the distribution annually of $10,000 of income to A. If any income remains, it may be accumulated or distributed to B, C, and D in amounts in the trustee's discretion. He may also invade corpus for the benefit of A, B, C, or D. In the taxable year, the trust has $20,000 of income after the deduction of all expenses. Distributable net income is $20,000. The trustee distributes $10,000 of income to A. Of the remaining $10,000 of income, he distributes $3,000 each to B, C, and D, and also distributes an additional $5,000 to A. A includes $10,000 in income under section 662(a)(1). The “other amounts distributed” amount of $14,000, includible in the income of the recipients to the extent of $10,000, distributable net income less the income currently distributable to A. A will include an additional $3,571 (5,000/14,000 × $10,000) in income under this section, and B, C, and D will each include $2,143 (3,000/14,000 × $10,000).

              [T.D. 6500, 25 FR 11814, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960, as amended by T.D. 7287, 38 FR 26913, Sept. 27, 1973]

              § 1.662(a)-4
              Amounts used in discharge of a legal obligation.

              Any amount which, pursuant to the terms of a will or trust instrument, is used in full or partial discharge or satisfaction of a legal obligation of any person is included in the gross income of such person under section 662(a) (1) or (2), whichever is applicable, as though directly distributed to him as a beneficiary, except in cases to which section 71 (relating to alimony payments) or section 682 (relating to income of a trust in case of divorce, etc.) applies. The term legal obligation includes a legal obligation to support another person if, and only if, the obligation is not affected by the adequacy of the dependent's own resources. For example, a parent has a “legal obligation” within the meaning of the preceding sentence to support his minor child if under local law property or income from property owned by the child cannot be used for his support so long as his parent is able to support him. On the other hand, if under local law a mother may use the resources of a child for the child's support in lieu of supporting him herself, no obligation of support exists within the meaning of this paragraph, whether or not income is actually used for support. Similarly, since under local law a child ordinarily is obligated to support his parent only if the parent's earnings and resources are insufficient for the purpose, no obligation exists whether or not the parent's earnings and resources are sufficient. In any event the amount of trust income which is included in the gross income of a person obligated to support a dependent is limited by the extent of his legal obligation under local law. In the case of a parent's obligation to support his child, to the extent that the parent's legal obligation of support, including education, is determined under local law by the family's station in life and by the means of the parent, it is to be determined without consideration of the trust income in question.

              § 1.662(b)-1
              Character of amounts; when no charitable contributions are made.
              In determining the amount includible in the gross income of a beneficiary, the amounts which are determined under section 662(a) and §§ 1.662(a)-1 through 1.662(a)-4 shall have the same character in the hands of the beneficiary as in the hands of the estate or trust. The amounts are treated as consisting of the same proportion of each class of items entering into the computation of distributable net income as the total of each class bears to the total distributable net income of the estate or trust unless the terms of the governing instrument specifically allocate different classes of income to different beneficiaries, or unless local law requires such an allocation. For this purpose, the principles contained in § 1.652(b)-1 shall apply.

              § 1.662(b)-2
              Character of amounts; when charitable contributions are made.

              When a charitable contribution is made, the principles contained in §§ 1.652(b)-1 and 1.662(b)-1 generally apply. However, before the allocation of other deductions among the items of distributable net income, the charitable contributions deduction allowed under section 642(c) is (in the absence of specific allocation under the terms of the governing instrument or the requirement under local law of a different allocation) allocated among the classes of income entering into the computation of estate or trust income in accordance with the rules set forth in paragraph (b) of § 1.643(a)-5. In the application of the preceding sentence, for the purpose of allocating items of income and deductions to beneficiaries to whom income is required to be distributed currently, the amount of the charitable contributions deduction is disregarded to the extent that it exceeds the income of the trust for the taxable year reduced by amounts for the taxable year required to be distributed currently. The application of this section may be illustrated by the following examples (of which example (1) is illustrative of the preceding sentence):

                Example 1.

                (a) A trust instrument provides that $30,000 of its income must be distributed currently to A, and the balance may either be distributed to B, distributed to a designated charity, or accumulated. Accumulated income may be distributed to B and to the charity. The trust for its taxable year has $40,000 of taxable interest and $10,000 of tax-exempt income, with no expenses. The trustee distributed $30,000 to A, $50,000 to charity X, and $10,000 to B.

                (b) Distributable net income for the purpose of determining the character of the distribution to A is $30,000 (the charitable contributions deduction, for this purpose, being taken into account only to the extent of $20,000, the difference between the income of the trust for the taxable year, $50,000, and the amount required to be distributed currently, $30,000).
                (c) The charitable contributions deduction taken into account, $20,000, is allocated proportionately to the items of income of the trust, $16,000 to taxable interest and $4,000 to tax-exempt income.
                (d) Under section 662(a)(1), the amount of income required to be distributed currently to A is $30,000, which consists of the balance of these items, $24,000 of taxable interest and $6,000 of tax-exempt income.
                (e) In determining the amount to be included in the gross income of B under section 662 for the taxable year, however, the entire charitable contributions deduction is taken into account, with the result that there is no distributable net income and therefore no amount to be included in gross income.
                (f) See subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code for application of the throwback provisions to the distribution made to B.

                Example 2.
                The net income of a trust is payable to A for life, with the remainder to a charitable organization. Under the terms of the trust instrument and local law capital gains are added to corpus. During the taxable year the trust receives dividends of $10,000 and realized a long-term capital gain of $10,000, for which a long-term capital gain deduction of $5,000 is allowed under section 1202. Since under the trust instrument and local law the capital gains are allocated to the charitable organization, and since the capital gain deduction is directly attributable to the capital gain, the charitable contributions deduction and the capital gain deduction are both allocable to the capital gain, and dividends in the amount of $10,000 are allocable to A.

              § 1.662(c)-1
              Different taxable years.
              If a beneficiary has a different taxable year (as defined in section 441 or 442) from the taxable year of an estate or trust, the amount he is required to include in gross income in accordance with section 662 (a) and (b) is based upon the distributable net income of the estate or trust and the amounts properly paid, credited, or required to be distributed to the beneficiary for any taxable year or years of the estate or trust ending with or within his taxable year. This rule applies as to so-called short taxable years as well as taxable years of normal duration. Income of an estate or trust for its taxable year or years is determined in accordance with its method of accounting and without regard to that of the beneficiary.

              § 1.662(c)-2
              Death of individual beneficiary.
              If an amount specified in section 662(a) (1) or (2) is paid, credited, or required to be distributed by an estate or trust for a taxable year which does not end with or within the last taxable year of a beneficiary (because of the beneficiary's death), the extent to which the amount is included in the gross income of the beneficiary for his last taxable year or in the gross income of his estate is determined by the computations under section 662 for the taxable year of the estate or trust in which his last taxable year ends. Thus, the distributable net income and the amounts paid, credited, or required to be distributed for the taxable year of the estate or trust, determine the extent to which the amounts paid, credited, or required to be distributed to the beneficiary are included in his gross income for his last taxable year or in the gross income of his estate. (Section 662(c) does not apply to such amounts.) The gross income for the last taxable year of a beneficiary on the cash basis includes only income actually distributed to the beneficiary before his death. Income required to be distributed, but in fact distributed to his estate, is included in the gross income of the estate as income in respect of a decedent under section 691. See paragraph (e) of § 1.663(c)-3 with respect to separate share treatment for the periods before and after the death of a trust's beneficiary.

              § 1.662(c)-3
              Termination of existence of other beneficiaries.

              If the existence of a beneficiary which is not an individual terminates, the amount to be included under section 662(a) in its gross income for the last taxable year is computed with reference to §§ 1.662(c)-1 and 1.662(c)-2 as if the beneficiary were a deceased individual, except that income required to be distributed prior to the termination but actually distributed to the beneficiary's successor in interest is included in the beneficiary's income for its last taxable year.

              § 1.662(c)-4
              Illustration of the provisions of sections 661 and 662.

              The provisions of sections 661 and 662 may be illustrated in general by the following example:

                Example.
                (a) Under the terms of a testamentary trust one-half of the trust income is to be distributed currently to W, the decedent's wife, for her life. The remaining trust income may, in the trustee's discretion, either be paid to D, the grantor's daughter, paid to designated charities, or accumulated. The trust is to terminate at the death of W and the principal will then be payable to D. No provision is made in the trust instrument with respect to depreciation of rental property. Capital gains are allocable to the principal account under the applicable local law. The trust and both beneficiaries file returns on the calendar year basis. The records of the fiduciary show the following items of income and deduction for the taxable year 1955:

                    Rents
                    $50,000

                    Dividends of domestic corporations
                    50,000

                    Tax-exempt interest
                    20,000

                    Partially tax-exempt interest
                    10,000

                    Capital gains (long term)
                    20,000

                    Depreciation of rental property
                    10,000

                    Expenses attributable to rental income
                    15,400

                    Trustee's commissions allocable to income account
                    2,800

                    Trustee's commissions allocable to principal account
                    1,100

                (b) The income for trust accounting purposes is $111,800, and the trustee distributes one-half ($55,900) to W and in his discretion makes a contribution of one-quarter ($27,950) to charity X and distributes the remaining one-quarter ($27,950) to D. The total of the distributions to beneficiaries is $83,850, consisting of (1) income required to be distributed currently to W of $55,900 and (2) other amounts properly paid or credited to D of $27,950. The income for trust accounting purposes of $111,800 is determined as follows:

                    Rents
                    $50,000

                    Dividends
                    50,000

                    Tax-exempt interest
                    20,000

                    Partially tax-exempt interest
                    10,000

                    Total
                    130,000

                    Less:

                    Rental expenses
                    $15,400

                    Trustee's commissions allocable to income account
                    2,800

                    ————
                    18,200

                    Income as computed under section 643(b)
                    111,800

                (c) The distributable net income of the trust as computed under section 643(a) is $82,750, determined as follows:

                    Rents

                    $50,000

                    Dividends

                    50,000

                    Partially tax-exempt interest

                    10,000

                    Tax-exempt interest

                    $20,000

                    Less:

                    Trustee's commissions allocable thereto (20,000/130,000 of $3,900)
                    $600

                    Charitable contributions allocable thereto (20,000/130,000 of $27,950)
                    4,300

                    —————
                    4,900

                    —————
                    15,100

                    Total

                    125,100

                    Deductions:

                    Rental expenses

                    15,400

                    Trustee's commissions ($3,900 less $600 allocated to tax-exempt interest)

                    3,300

                    Charitable deduction ($27,950 less $4,300 attributable to tax-exempt interest)

                    23,650

                    —————
                    42,350

                    Distributable net income

                    82,750

                In computing the distributable net income of $82,750, the taxable income of the trust was computed with the following modifications: No deductions were allowed for distributions to beneficiaries and for personal exemption of the trust (section 643(a) (1) and (2)); capital gains were excluded and no deduction under section 1202 (relating to the 50 percent deduction for long-term capital gains) was taken into account (section 643(a)(3)); and the tax-exempt interest (as adjusted for expenses and charitable contributions) and the dividend exclusion of $50 were included (section 643(a) (5) and (7)).
                (d) Inasmuch as the distributable net income of $82,750 as determined under section 643(a) is less than the sum of the amounts distributed to W and D of $83,850, the deduction allowable to the trust under section 661(a) is such distributable net income as modified under section 661(c) to exclude therefrom the items of income not included in the gross income of the trust, as follows:

                    Distributable net income
                    $82,750

                    Less:

                    Tax-exempt interest (as adjusted for expenses and the charitable contributions)
                    $15,100

                    Dividend exclusion allowable under section 116
                    50

                    ————
                    15,150

                    Deduction allowable under section 661(a)
                    67,600

                (e) For the purpose of determining the character of the amounts deductible under section 642(c) and section 661(a), the trustee elected to offset the trustee's commissions (other than the portion required to be allocated to tax-exempt interest) against the rental income. The following table shows the determination of the character of the amounts deemed distributed to beneficiaries and contributed to charity.

                    Rents
                    Taxable dividends
                    Excluded dividends
                    Tax exempt interest
                    Partially tax exempt interest
                    Total

                    Trust income
                    $50,000
                    $49,950
                    $50
                    $20,000
                    $10,000
                    $130,000

                    Less:

                    Charitable contribution
                    10,750
                    10,750

                    4,300
                    2,150
                    27,950

                    Rental expenses
                    15,400

                    15,400

                    Trustee's commissions
                    3,300

                    600

                    3,900

                    Total deductions
                    29,450
                    10,750
                    0
                    4,900
                    2,150
                    47,250

                    Amounts distributable to beneficiaries
                    20,550
                    39,200
                    50
                    15,100
                    7,850
                    82,750

                The character of the charitable contribution is determined by multiplying the total charitable contribution ($27,950) by a fraction consisting of each item of trust income, respectively, over the total trust income, except that no part of the dividends excluded from gross income are deemed included in the charitable contribution. For example, the charitable contribution is deemed to consist of rents of $10,750 (50,000/130,000 × $27,950).
                (f) The taxable income of the trust is $9,900 determined as follows:

                    Rental income
                    $50,000

                    Dividends ($50,000 less $50 exclusion)
                    49,950

                    Partially tax-exempt interest
                    10,000

                    Capital gains
                    20,000

                    Gross income
                    129,950

                    Deductions:

                    Rental expenses
                    15,400

                    Trustee's commissions
                    3,300

                    Charitable contributions
                    23,650

                    Capital gain deduction
                    10,000

                    Distributions to beneficiaries
                    67,600

                    Personal exemption
                    100

                    120,050

                    Taxable income
                    9,900

                (g) In computing the amount includible in W's gross income under section 662(a)(1), the $55,900 distribution to her is deemed to be composed of the following proportions of the items of income deemed to have been distributed to the beneficiaries by the trust (see paragraph (e) of this example):

                    Rents (20,550/82,750 × $55,900)
                    $13,882

                    Dividends (39,250/82,750 × $55,900)
                    26,515

                    Partially tax-exempt interest (7,850/ 82,750 × $55,900)
                    5,303

                    Tax-exempt interest (15,100/82,750 × $55,900)
                    10,200

                    Total
                    55,900

                Accordingly, W will exclude $10,200 of tax-exempt interest from gross income and will receive the credits and exclusion for dividends received and for partially tax-exempt interest provided in sections 34, 116, and 35, respectively, with respect to the dividends and partially tax-exempt interest deemed to have been distributed to her, her share of the dividends being aggregated with other dividends received by her for purposes of the dividend credit and exclusion. In addition, she may deduct a share of the depreciation deduction proportionate to the trust income allocable to her; that is, one-half of the total depreciation deduction, or $5,000.
                (h) Inasmuch as the sum of the amount of income required to be distributed currently to W ($55,900) and the other amounts properly paid, credited, or required to be distributed to D ($27,950) exceeds the distributable net income ($82,750) of the trust as determined under section 643(a), D is deemed to have received $26,850 ($82,750 less $55,900) for income tax purposes. The character of the amounts deemed distributed to her is determined as follows:

                    Rents (20,550/82,750 × $26,850)
                    $6,668

                    Dividends (39,250/82,750 × $26,850)
                    12,735

                    Partially tax-exempt interest (7,850/ 82,750 × $26,850)
                    2,547

                    Tax-exempt interest (15,100/82,750 × $26,850)
                    4,900

                    Total
                    26,850

                Accordingly, D will exclude $4,900 of tax-exempt interest from gross income and will receive the credits and exclusion for dividends received and for partially tax-exempt interest provided in sections 34, 116, and 35, respectively, with respect to the dividends and partially tax-exempt interest deemed to have been distributed to her, her share of the dividends being aggregated with other dividends received by her for purposes of the dividend credit and exclusion. In addition, she may deduct a share of the depreciation deduction proportionate to the trust income allocable to her; that is, one-fourth of the total depreciation deduction, or $2,500.
                (i) [Reserved]
                (j) The remaining $2,500 of the depreciation deduction is allocated to the amount distributed to charity X and is hence non-deductible by the trust, W, or D. (See § 1.642(e)-1.)

              § 1.663(a)-1
              Special rules applicable to sections 661 and 662; exclusions; gifts, bequests, etc.
              (a) In general. A gift or bequest of a specific sum of money or of specific property, which is required by the specific terms of the will or trust instrument and is properly paid or credited to a beneficiary, is not allowed as a deduction to an estate or trust under section 661 and is not included in the gross income of a beneficiary under section 662, unless under the terms of the will or trust instrument the gift or bequest is to be paid or credited to the recipient in more than three installments. Thus, in order for a gift or bequest to be excludable from the gross income of the recipient, (1) it must qualify as a gift or bequest of a specific sum of money or of specific property (see paragraph (b) of this section), and (2) the terms of the governing instrument must not provide for its payment in more than three installments (see paragraph (c) of this section). The date when the estate came into existence or the date when the trust was created is immaterial.
              (b) Definition of a gift or bequest of a specific sum of money or of specific property. (1) In order to qualify as a gift or bequest of a specific sum of money or of specific property under section 663(a), the amount of money or the identity of the specific property must be ascertainable under the terms of a testator's will as of the date of his death, or under the terms of an inter vivos trust instrument as of the date of the inception of the trust. For example, bequests to a decedent's son of the decedent's interest in a partnership and to his daughter of a sum of money equal to the value of the partnership interest are bequests of specific property and of a specific sum of money, respectively. On the other hand, a bequest to the decedent's spouse of money or property, to be selected by the decedent's executor, equal in value to a fraction of the decedent's “adjusted gross estate” is neither a bequest of a specific sum of money or of specific property. The identity of the property and the amount of money specified in the preceding sentence are dependent both on the exercise of the executor's discretion and on the payment of administration expenses and other charges, neither of which are facts existing on the date of the decedent's death. It is immaterial that the value of the bequest is determinable after the decedent's death before the bequest is satisfied (so that gain or loss may be realized by the estate in the transfer of property in satisfaction of it).
              (2) The following amounts are not considered as gifts or bequests of a sum of money or of specific property within the meaning of this paragraph:
              (i) An amount which can be paid or credited only from the income of an estate or trust, whether from the income for the year of payment or crediting, or from the income accumulated from a prior year;
              (ii) An annuity, or periodic gifts of specific property in lieu of or having the effect of an annuity;
              (iii) A residuary estate or the corpus of a trust; or
              (iv) A gift or bequest paid in a lump sum or in not more than three installments, if the gift or bequest is required to be paid in more than three installments under the terms of the governing instrument.

              (3) The provisions of subparagraphs (1) and (2) of this paragraph may be illustrated by the following examples, in which it is assumed that the gift or bequest is not required to be made in more than three installments (see paragraph (c)):

                Example 1.

                Under the terms of a will, a legacy of $5,000 was left to A, 1,000 shares of X company stock was left to W, and the balance of the estate was to be divided equally between W and B. No provision was made in the will for the disposition of income of the estate during the period of administration. The estate had income of $25,000 during the taxable year 1954, which was accumulated and added to corpus for estate accounting purposes. During the taxable year, the executor paid the legacy of $5,000 in a lump sum to A, transferred the X company stock to W, and made no other distributions to beneficiaries. The distributions to A and W qualify for the exclusion under section 663(a)(1).

                Example 2.
                Under the terms of a will, the testator's estate was to be distributed to A. No provision was made in the will for the distribution of the estate's income during the period of administration. The estate had income of $50,000 for the taxable year. The estate distributed to A stock with a basis of $40,000 and with a fair market value of $40,000 on the date of distribution. No other distributions were made during the year. The distribution does not qualify for the exclusion under section 663(a)(1), because it is not a specific gift to A required by the terms of the will. Accordingly, the fair market value of the property ($40,000) represents a distribution within the meaning of sections 661(a) and 662(a) (see § 1.661(a)-2(c)).

                Example 3.
                Under the terms of a trust instrument, trust income is to be accumulated for a period of 10 years. During the eleventh year, the trustee is to distribute $10,000 to B, payable from income or corpus, and $10,000 to C, payable out of accumulated income. The trustee is to distribute the balance of the accumulated income to A. Thereafter, A is to receive all the current income until the trust terminates. Only the distribution to B would qualify for the exclusion under section 663(a)(1).

              (4) A gift or bequest of a specific sum of money or of specific property is not disqualified under this paragraph solely because its payment is subject to a condition. For example, provision for a payment by a trust to beneficiary A of $10,000 when he reaches age 25, and $10,000 when he reaches age 30, with payment over to B of any amount not paid to A because of his death, is a gift to A of a specific sum of money payable in two installments, within the meaning of this paragraph, even though the exact amount payable to A cannot be ascertained with certainty under the terms of the trust instrument.
              (c) Installment payments. (1) In determining whether a gift or bequest of a specific sum of money or of specific property, as defined in paragraph (b) of this section, is required to be paid or credited to a particular beneficiary in more than three installments:
              (i) Gifts or bequests of articles for personal use (such as personal and household effects, automobiles, and the like) are disregarded.
              (ii) Specifically devised real property, the title to which passes directly from the decedent to the devisee under local law, is not taken into account, since it would not constitute an amount paid, credited, or required to be distributed under section 661 (see paragraph (e) of § 1.661(a)-2).
              (iii) All gifts and bequests under a decedent's will (which are not disregarded pursuant to subdivisions (i) and (ii) of this subparagraph) for which no time of payment or crediting is specified, and which are to be paid or credited in the ordinary course of administration of the decedent's estate, are considered as required to be paid or credited in a single installment.
              (iv) All gifts and bequests (which are not disregarded pursuant to subdivisions (i) and (ii) of this subparagraph) payable at any one specified time under the terms of the governing instrument are taken into account as a single installment.
              For purposes of determining the number of installments paid or credited to a particular beneficiary, a decedent's estate and a testamentary trust shall each be treated as a separate entity.

              (2) The application of the rules stated in subparagraph (1) of this paragraph may be illustrated by the following examples:

                Example (1).
                (i) Under the terms of a decedent's will, $10,000 in cash, household furniture, a watch, an automobile, 100 shares of X company stock, 1,000 bushels of grain, 500 head of cattle, and a farm (title to which passed directly to A under local law) are bequeathed or devised outright to A. The will also provides for the creation of a trust for the benefit of A, under the terms of which there are required to be distributed to A, $10,000 in cash and 100 shares of Y company stock when he reaches 25 years of age, $25,000 in cash and 200 shares of Y company stock when he reaches 30 years of age, and $50,000 in cash and 300 shares of Y company stock when he reaches 35 years of age.
                (ii) The furniture, watch, automobile, and the farm are excluded in determining whether any gift or bequest is required to be paid or credited to A in more than three installments. These items qualify for the exclusion under section 663(a)(1) regardless of the treatment of the other items of property bequeathed to A.

                (iii) The $10,000 in cash, the shares of X company stock, the grain, the cattle and the assets required to create the trust, to be paid or credited by the estate to A and the trust are considered as required to be paid or credited in a single installment to each, regardless of the manner of payment or distribution by the executor, since no time of payment or crediting is specified in the will. The $10,000 in cash and shares of Y company stock required to be distributed by the trust to A when he is 25 years old are considered as required to be paid or distributed as one installment under the trust. Likewise, the distributions to be made by the trust to A when he is 30 and 35 years old are each considered as one installment under the trust. Since the total number of installments to be made by the estate does not exceed three, all of the items of money and property distributed by the estate qualify for the exclusion under section 663(a)(1). Similarly, the three distributions by the trust qualify.

                Example (2).
                Assume the same facts as in example (1), except that another distribution of a specified sum of money is required to be made by the trust to A when he becomes 40 years old. This distribution would also qualify as an installment, thus making four installments in all under the trust. None of the gifts to A under the trust would qualify for the exclusion under section 663(a)(1). The situation as to the estate, however, would not be changed.

                Example (3).
                A trust instrument provides that A and B are each to receive $75,000 in installments of $25,000, to be paid in alternate years. The trustee distributes $25,000 to A in 1954, 1956, and 1958, and to B in 1955, 1957, and 1959. The gifts to A and B qualify for exclusion under section 663(a)(1), although a total of six payments is made. The gifts of $75,000 to each beneficiary are to be separately treated.

              [T.D. 6500, 25 FR 11814, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960, as amended by T.D. 8849, 64 FR 72543, Dec. 28, 1999]

              § 1.663(a)-2
              Charitable, etc., distributions.
              Any amount paid, permanently set aside, or to be used for the charitable, etc., purposes specified in section 642(c) and which is allowable as a deduction under that section is not allowed as a deduction to an estate or trust under section 661 or treated as an amount distributed for purposes of determining the amounts includible in gross income of beneficiaries under section 662. Amounts paid, permanently set aside, or to be used for charitable, etc., purposes are deductible by estates or trusts only as provided in section 642(c). For purposes of this section, the deduction provided in section 642(c) is computed without regard to the provisions of section 508(d), section 681, or section 4948(c)(4) (concerning unrelated business income and private foundations).
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 7428, 41 FR 34627, Aug. 16, 1976]

              § 1.663(a)-3
              Denial of double deduction.
              No amount deemed to have been distributed to a beneficiary in a preceding year under section 651 or 661 is included in amounts falling within section 661(a) or 662(a). For example, assume that all of the income of a trust is required to be distributed currently to beneficiary A and both the trust and A report on the calendar year basis. For administrative convenience, the trustee distributes in January and February 1956 a portion of the income of the trust required to be distributed in 1955. The portion of the income for 1955 which was distributed by the trust in 1956 may not be claimed as a deduction by the trust for 1956 since it is deductible by the trust and includible in A's gross income for the taxable year 1955.

              § 1.663(b)-1
              Distributions in first 65 days of taxable year; scope.
              (a) Taxable years beginning after December 31, 1968—(1) General rule. With respect to taxable years beginning after December 31, 1968, the fiduciary of a trust may elect under section (b) to 663 treat any amount or portion thereof that is properly paid or credited to a beneficiary within the first 65 days following the close of the taxable year as an amount that was properly paid or credited on the last day of such taxable year.
              (2) Effect of election. (i) An election is effective only with respect to the taxable year for which the election is made. In the case of distributions made after May 8, 1972, the amount to which the election applies shall not exceed:
              (a) The amount of income of the trust (as defined in § 1.643(b)-1) for the taxable year for which the election is made, or
              (b) The amount of distributable net income of the trust (as defined in §§ 1.643(a)-1 through 1.643(a)-7) for such taxable year, if greater,

              reduced by any amounts paid, credited, or required to be distributed in such taxable year other than those amounts considered paid or credited in a preceding taxable year by reason of section 663(b) and this section. An election shall be made for each taxable year for which the treatment is desired. The application of this paragraph may be illustrated by the following example:

                Example.
                X Trust, a calendar year trust, has $1,000 of income (as defined in § 1.643(b)-1) and $800 of distributable net income (as defined in §§ 1.643(a)-1 through 1.643(a)-7) in 1972. The trust properly pays $550 to A, a beneficiary, on January 15, 1972, which the trustee elects to treat under section 663(b) as paid on December 31, 1971. The trust also properly pays to A $600 on July 19, 1972, and $450 on January 17, 1973. For 1972, the maximum amount that may be elected under this subdivision to be treated as properly paid or credited on the last day of 1972 is $400 ($1,000−$600). The $550 paid on January 15, 1972, does not reduce the maximum amount to which the election may apply, because that amount is treated as properly paid on December 31, 1971.

              (ii) If an election is made with respect to a taxable year of a trust, this section shall apply only to those amounts which are properly paid or credited within the first 65 days following such year and which are so designated by the fiduciary in his election. Any amount considered under section 663(b) as having been distributed in the preceding taxable year shall be so treated for all purposes. For example, in determining the beneficiary's tax liability, such amount shall be considered as having been received by the beneficiary in his taxable year in which or with which the last day of the preceding taxable year of the trust ends.
              (b) Taxable years beginning before January 1, 1969. With respect to taxable years of a trust beginning before January 1, 1969, the fiduciary of the trust may elect under section 663(b) to treat distributions within the first 65 days following such taxable year as amounts which were paid or credited on the last day of such taxable year, if:
              (1) The trust was in existence prior to January 1, 1954;
              (2) An amount in excess of the income of the immediately preceding taxable year may not (under the terms of the governing instrument) be distributed in any taxable year; and
              (3) The fiduciary elects (as provided in § 1.663(b)-2) to have section 663(b) apply.
              [T.D. 7204, 37 FR 17135, Aug. 25, 1972]

              § 1.663(b)-2
              Election.
              (a) Manner and time of election; irrevocability—(1) When return is required to be filed. If a trust return is required to be filed for the taxable year of the trust for which the election is made, the election shall be made in the appropriate place on such return. The election under this subparagraph shall be made not later than the time prescribed by law for filing such return (including extensions thereof). Such election shall become irrevocable after the last day prescribed for making it.
              (2) When no return is required to be filed. If no return is required to be filed for the taxable year of the trust for which the election is made, the election shall be made in a statement filed with the internal revenue office with which a return by such trust would be filed if such trust were required to file a return for such taxable year. See section 6091 and the regulations thereunder for place for filing returns. The election under this subparagraph shall be made not later than the time prescribed by law for filing a return if such trust were required to file a return for such taxable year. Such election shall become irrevocable after the last day prescribed for making it.
              (b) Elections under prior law. Elections made pursuant to section 663(b) prior to its amendment by section 331(b) of the Tax Reform Act of 1969 (83 Stat. 598), which, under prior law, were irrevocable for the taxable year for which the election was made and all subsequent years, are not effective for taxable years beginning after December 31, 1968. In the case of a trust for which an election was made under prior law, the fiduciary shall make the election for each taxable year beginning after December 31, 1968, for which the treatment provided by section 663(b) is desired.
              [T.D. 7204, 37 FR 17135, Aug. 25, 1972]

              § 1.663(c)-1
              Separate shares treated as separate trusts or as separate estates; in general.
              (a) If a single trust (or estate) has more than one beneficiary, and if different beneficiaries have substantially separate and independent shares, their shares are treated as separate trusts (or estates) for the sole purpose of determining the amount of distributable net income allocable to the respective beneficiaries under sections 661 and 662. Application of this rule will be significant in, for example, situations in which income is accumulated for beneficiary A but a distribution is made to beneficiary B of both income and corpus in an amount exceeding the share of income that would be distributable to B had there been separate trusts (or estates). In the absence of a separate share rule B would be taxed on income which is accumulated for A. The division of distributable net income into separate shares will limit the tax liability of B. Section 663(c) does not affect the principles of applicable law in situations in which a single trust (or estate) instrument creates not one but several separate trusts (or estates), as opposed to separate shares in the same trust (or estate) within the meaning of this section.
              (b) The separate share rule does not permit the treatment of separate shares as separate trusts (or estates) for any purpose other than the application of distributable net income. It does not, for instance, permit the treatment of separate shares as separate trusts (or estates) for purposes of:
              (1) The filing of returns and payment of tax,
              (2) The deduction of personal exemption under section 642(b), and
              (3) The allowance to beneficiaries succeeding to the trust (or estate) property of excess deductions and unused net operating loss and capital loss carryovers on termination of the trust (or estate) under section 642(h).
              (c) The separate share rule may be applicable even though separate and independent accounts are not maintained and are not required to be maintained for each share on the books of account of the trust (or estate), and even though no physical segregation of assets is made or required.
              (d) Separate share treatment is not elective. Thus, if a trust (or estate) is properly treated as having separate and independent shares, such treatment must prevail in all taxable years of the trust (or estate) unless an event occurs as a result of which the terms of the trust (or estate) instrument and the requirements of proper administration require different treatment.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960; 25 FR 14021, as amended by T.D. 8849, 64 FR 72543, Dec. 28, 1999]

              § 1.663(c)-2
              Rules of administration.
              (a) When separate shares come into existence. A separate share comes into existence upon the earliest moment that a fiduciary may reasonably determine, based upon the known facts, that a separate economic interest exists.
              (b) Computation of distributable net income for each separate share—(1) General rule. The amount of distributable net income for any share under section 663(c) is computed as if each share constituted a separate trust or estate. Accordingly, each separate share shall calculate its distributable net income based upon its portion of gross income that is includible in distributable net income and its portion of any applicable deductions or losses.
              (2) Section 643(b) income. This paragraph (b)(2) governs the allocation of the portion of gross income includible in distributable net income that is income within the meaning of section 643(b). Such gross income is allocated among the separate shares in accordance with the amount of income that each share is entitled to under the terms of the governing instrument or applicable local law.
              (3) Income in respect of a decedent. This paragraph (b)(3) governs the allocation of the portion of gross income includible in distributable net income that is income in respect of a decedent within the meaning of section 691(a) and is not income within the meaning of section 643(b). Such gross income is allocated among the separate shares that could potentially be funded with these amounts irrespective of whether the share is entitled to receive any income under the terms of the governing instrument or applicable local law. The amount of such gross income allocated to each share is based on the relative value of each share that could potentially be funded with such amounts.
              (4) Gross income not attributable to cash. This paragraph (b)(4) governs the allocation of the portion of gross income includible in distributable net income that is not attributable to cash received by the estate or trust (for example, original issue discount, a distributive share of partnership tax items, and the pro rata share of an S corporation's tax items). Such gross income is allocated among the separate shares in the same proportion as section 643(b) income from the same source would be allocated under the terms of the governing instrument or applicable local law.
              (5) Deductions and losses. Any deduction or any loss which is applicable solely to one separate share of the trust or estate is not available to any other share of the same trust or estate.
              (c) Computations and valuations. For purposes of calculating distributable net income for each separate share, the fiduciary must use a reasonable and equitable method to make the allocations, calculations, and valuations required by paragraph (b) of this section.
              [T.D. 8849, 64 FR 72543, Dec. 28, 1999]

              § 1.663(c)-3
              Applicability of separate share rule to certain trusts.
              (a) The applicability of the separate share rule provided by section 663(c) to trusts other than qualified revocable trusts within the meaning of section 645(b)(1) will generally depend upon whether distributions of the trust are to be made in substantially the same manner as if separate trusts had been created. Thus, if an instrument directs a trustee to divide the testator's residuary estate into separate shares (which under applicable law do not constitute separate trusts) for each of the testator's children and the trustee is given discretion, with respect to each share, to distribute or accumulate income or to distribute principal or accumulated income, or to do both, separate shares will exist under section 663(c). In determining whether separate shares exist, it is immaterial whether the principal and any accumulated income of each share is ultimately distributable to the beneficiary of such share, to his descendants, to his appointees under a general or special power of appointment, or to any other beneficiaries (including a charitable organization) designated to receive his share of the trust and accumulated income upon termination of the beneficiary's interest in the share. Thus, a separate share may exist if the instrument provides that upon the death of the beneficiary of the share, the share will be added to the shares of the other beneficiaries of the trust.
              (b) Separate share treatment will not be applied to a trust or portion of a trust subject to a power to: (1) Distribute, apportion, or accumulate income, or (2) distribute corpus to or for one or more beneficiaries within a group or class of beneficiaries, unless payment of income, accumulated income, or corpus of a share of one beneficiary cannot affect the proportionate share of income, accumulated income, or corpus of any shares of the other beneficiaries, or unless substantially proper adjustment must thereafter be made (under the governing instrument) so that substantially separate and independent shares exist.
              (c) A share may be considered as separate even though more than one beneficiary has an interest in it. For example, two beneficiaries may have equal, disproportionate, or indeterminate interests in one share which is separate and independent from another share in which one or more beneficiaries have an interest. Likewise, the same person may be a beneficiary of more than one separate share.

              (d) Separate share treatment may be given to a trust or portion of a trust otherwise qualifying under this section if the trust or portion of a trust is subject to a power to pay out to a beneficiary of a share (of such trust or portion) an amount of corpus in excess of his proportionate share of the corpus of the trust if the possibility of exercise of the power is remote. For example, if the trust is subject to a power to invade the entire corpus for the health, education, support, or maintenance of A, separate share treatment is applied if exercise of the power requires consideration of A's other income which is so substantial as to make the possibility of exercise of the power remote. If instead it appears that A and B have separate shares in a trust, subject to a power to invade the entire corpus for the comfort, pleasure, desire, or happiness of A, separate share treatment shall not be applied.

              (e) For taxable years ending before December 31, 1978, the separate share rule may also be applicable to successive interests in point of time, as for instance in the case of a trust providing for a life estate to A and a second life estate or outright remainder to B. In such a case, in the taxable year of a trust in which a beneficiary dies items of income and deduction properly allocable under trust accounting principles to the period before a beneficiary's death are attributed to one share, and those allocable to the period after the beneficiary's death are attributed to the other share. Separate share treatment is not available to a succeeding interest, however, with respect to distributions which would otherwise be deemed distributed in a taxable year of the earlier interest under the throwback provisions of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code. The application of this paragraph may be illustrated by the following example:

                Example.
                A trust instrument directs that the income of a trust is to be paid to A for her life. After her death income may be distributed to B or accumulated. A dies on June 1, 1956. The trust keeps its books on the basis of the calendar year. The trust instrument permits invasions of corpus for the benefit of A and B, and an invasion of corpus was in fact made for A's benefit in 1956. In determining the distributable net income of the trust for the purpose of determining the amounts includible in A's income, income and deductions properly allocable to the period before A's death are treated as income and deductions of a separate share; and for that purpose no account is taken of income and deductions allocable to the period after A's death.

              [T.D. 6500, 25 FR 11814, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960, as amended by T.D. 7633, 44 FR 57926, Oct. 9, 1979; T.D. 8849, 64 FR 72543, Dec. 28, 1999]

              § 1.663(c)-4
              Applicability of separate share rule to estates and qualified revocable trusts.
              (a) General rule. The applicability of the separate share rule provided by section 663(c) to estates and qualified revocable trusts within the meaning of section 645(b)(1) will generally depend upon whether the governing instrument and applicable local law create separate economic interests in one beneficiary or class of beneficiaries of such estate or trust. Ordinarily, a separate share exists if the economic interests of the beneficiary or class of beneficiaries neither affect nor are affected by the economic interests accruing to another beneficiary or class of beneficiaries. Separate shares include, for example, the income on bequeathed property if the recipient of the specific bequest is entitled to such income and a surviving spouse's elective share that under local law is entitled to income and appreciation or depreciation. Furthermore, a qualified revocable trust for which an election is made under section 645 is always a separate share of the estate and may itself contain two or more separate shares. Conversely, a gift or bequest of a specific sum of money or of property as defined in section 663(a)(1) is not a separate share.
              (b) Special rule for certain types of beneficial interests. Notwithstanding the provisions of paragraph (a) of this section, a surviving spouse's elective share that under local law is determined as of the date of the decedent's death and is not entitled to income or any appreciation or depreciation is a separate share. Similarly, notwithstanding the provisions of paragraph (a) of this section, a pecuniary formula bequest that, under the terms of the governing instrument or applicable local law, is not entitled to income or to share in appreciation or depreciation constitutes a separate share if the governing instrument does not provide that it is to be paid or credited in more than three installments.
              (c) Shares with multiple beneficiaries and beneficiaries of multiple shares. A share may be considered as separate even though more than one beneficiary has an interest in it. For example, two beneficiaries may have equal, disproportionate, or indeterminate interests in one share which is economically separate and independent from another share in which one or more beneficiaries have an interest. Moreover, the same person may be a beneficiary of more than one separate share.
              [T.D. 8849, 64 FR 72544, Dec. 28, 1999]

              § 1.663(c)-5
              Examples.

              Section 663(c) may be illustrated by the following examples:

                Example 1.
                (i) A single trust was created in 1940 for the benefit of A, B, and C, who were aged 6, 4, and 2, respectively. Under the terms of the instrument, the trust income is required to be divided into three equal shares. Each beneficiary's share of the income is to be accumulated until he becomes 21 years of age. When a beneficiary reaches the age of 21, his share of the income may thereafter be either accumulated or distributed to him in the discretion of the trustee. The trustee also has discretion to invade corpus for the benefit of any beneficiary to the extent of his share of the trust estate, and the trust instrument requires that the beneficiary's right to future income and corpus will be proportionately reduced. When each beneficiary reaches 35 years of age, his share of the trust estate shall be paid over to him. The interest in the trust estate of any beneficiary dying without issue and before he has attained the age of 35 is to be equally divided between the other beneficiaries of the trust. All expenses of the trust are allocable to income under the terms of the trust instrument.
                (ii) No distributions of income or corpus were made by the trustee prior to 1955, although A became 21 years of age on June 30, 1954. During the taxable year of 1955, the trust has income from royalties of $20,000 and expenses of $5,000. The trustee in his discretion distributes $12,000 to A. Both A and the trust report on the calendar year basis.
                (iii) The trust qualifies for the separate share treatment under section 663(c) and the distributable net income must be divided into three parts for the purpose of determining the amount deductible by the trust under section 661 and the amount includible in A's gross income under section 662.
                (iv) The distributable net income of each share of the trust is $5,000 ($6,667 less $1,667). Since the amount ($12,000) distributed to A during 1955 exceeds the distributable net income of $5,000 allocated to his share, the trust is deemed to have distributed to him $5,000 of 1955 income and $7,000 of amounts other than 1955 income. Accordingly, the trust is allowed a deduction of $5,000 under section 661. The taxable income of the trust for 1955 is $9,900, computed as follows:

                    Royalties
                    $20,000

                    Deductions:

                    Expenses
                    $5,000

                    Distribution to A
                    5,000

                    Personal exemption
                    100

                    10,100

                    Taxable income
                    9,900

                (v) In accordance with section 662, A must include in his gross income for 1955 an amount equal to the portion ($5,000) of the distributable net income of the trust allocated to his share. Also, the excess distribution of $7,000 made by the trust is subject to the throwback provisions of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code, and the regulations thereunder.

                Example 2.
                (i) Facts. Testator, who dies in 2000, is survived by a spouse and two children. Testator's will contains a fractional formula bequest dividing the residuary estate between the surviving spouse and a trust for the benefit of the children. Under the fractional formula, the marital bequest constitutes 60% of the estate and the children's trust constitutes 40% of the estate. During the year, the executor makes a partial proportionate distribution of $1,000,0000, ($600,000 to the surviving spouse and $400,000 to the children's trust) and makes no other distributions. The estate receives dividend income of $20,000, and pays expenses of $8,000 that are deductible on the estate's federal income tax return.
                (ii) Conclusion. The fractional formula bequests to the surviving spouse and to the children's trust are separate shares. Because Testator's will provides for fractional formula residuary bequests, the income and any appreciation in the value of the estate assets are proportionately allocated between the marital share and the trust's share. Therefore, in determining the distributable net income of each share, the income and expenses must be allocated 60% to the marital share and 40% to the trust's share. The distributable net income is $7,200 (60% of income less 60% of expenses) for the marital share and $4,800 (40% of income less 40% of expenses) for the trust's share. Because the amount distributed in partial satisfaction of each bequest exceeds the distributable net income of each share, the estate's distribution deduction under section 661 is limited to the sum of the distributable net income for both shares. The estate is allowed a distribution deduction of $12,000 ($7,200 for the marital share and $4,800 for the trust's share). As a result, the estate has zero taxable income ($20,000 income less $8,000 expenses and $12,000 distribution deduction). Under section 662, the surviving spouse and the trust must include in gross income $7,200 and $4,800, respectively.

                Example 3.
                The facts are the same as in Example 2, except that in 2000 the executor makes the payment to partially fund the children's trust but makes no payment to the surviving spouse. The fiduciary must use a reasonable and equitable method to allocate income and expenses to the trust's share. Therefore, depending on when the distribution is made to the trust, it may no longer be reasonable or equitable to determine the distributable net income for the trust's share by allocating to it 40% of the estate's income and expenses for the year. The computation of the distributable net income for the trust's share should take into consideration that after the partial distribution the relative size of the trust's separate share is reduced and the relative size of the spouse's separate share is increased.

                Example 4.
                (i) Facts. Testator, who dies in 2000, is survived by a spouse and one child. Testator's will provides for a pecuniary formula bequest to be paid in not more than three installments to a trust for the benefit of the child of the largest amount that can pass free of Federal estate tax and a bequest of the residuary to the surviving spouse. The will provides that the bequest to the child's trust is not entitled to any of the estate's income and does not participate in appreciation or depreciation in estate assets. During the 2000 taxable year, the estate receives dividend income of $200,000 and pays expenses of $15,000 that are deductible on the estate's federal income tax return. The executor partially funds the child's trust by distributing to it securities that have an adjusted basis to the estate of $350,000 and a fair market value of $380,000 on the date of distribution. As a result of this distribution, the estate realizes long-term capital gain of $30,000.
                (ii) Conclusion. The estate has two separate shares consisting of a formula pecuniary bequest to the child's trust and a residuary bequest to the surviving spouse. Because, under the terms of the will, no estate income is allocated to the bequest to the child's trust, the distributable net income for that trust's share is zero. Therefore, with respect to the $380,000 distribution to the child's trust, the estate is allowed no deduction under section 661, and no amount is included in the trust's gross income under section 662. Because no distributions were made to the spouse, there is no need to compute the distributable net income allocable to the marital share. The taxable income of the estate for the 2000 taxable year is $214,400 ($200,000 (dividend income) plus $30,000 (capital gain) minus $15,000 (expenses) and minus $600 (personal exemption)).

                Example 5.
                The facts are the same as in Example 4, except that during 2000 the estate reports on its federal income tax return a pro rata share of an S corporation's tax items and a distributive share of a partnership's tax items allocated on Form K-1s to the estate by the S corporation and by the partnership, respectively. Because, under the terms of the will, no estate income from the S corporation or the partnership would be allocated to the pecuniary bequest to child's trust, none of the tax items attributable to the S corporation stock or the partnership interest is allocated to the trust's separate share. Therefore, with respect to the $380,000 distribution to the trust, the estate is allowed no deduction under section 661, and no amount is included in the trust's gross income under section 662.

                Example 6.
                The facts are the same as in Example 4, except that during 2000 the estate receives a distribution of $900,000 from the decedent's individual retirement account that is included in the estate's gross income as income in respect of a decedent under section 691(a). The entire $900,000 is allocated to corpus under applicable local law. Both the separate share for the child's trust and the separate share for the surviving spouse may potentially be funded with the proceeds from the individual retirement account. Therefore, a portion of the $900,000 gross income must be allocated to the trust's separate share. The amount allocated to the trust's share must be based upon the relative values of the two separate shares using a reasonable and equitable method. The estate is entitled to a deduction under section 661 for the portion of the $900,000 properly allocated to the trust's separate share, and the trust must include this amount in income under section 662.

                Example 7.
                (i) Facts. Testator, who dies in 2000, is survived by a spouse and three adult children. Testator's will divides the residue of the estate equally among the three children. The surviving spouse files an election under the applicable state's elective share statute. Under this statute, a surviving spouse is entitled to one-third of the decedent's estate after the payment of debts and expenses. The statute also provides that the surviving spouse is not entitled to any of the estate's income and does not participate in appreciation or depreciation of the estate's assets. However, under the statute, the surviving spouse is entitled to interest on the elective share from the date of the court order directing the payment until the executor actually makes payment. During the estate's 2001 taxable year, the estate distributes to the surviving spouse $5,000,000 in partial satisfaction of the elective share and pays $200,000 of interest on the delayed payment of the elective share. During that year, the estate receives dividend income of $3,000,000 and pays expenses of $60,000 that are deductible on the estate's federal income tax return.
                (ii) Conclusion. The estate has four separate shares consisting of the surviving spouse's elective share and each of the three children's residuary bequests. Because the surviving spouse is not entitled to any estate income under state law, none of the estate's gross income is allocated to the spouse's separate share for purposes of determining that share's distributable net income. Therefore, with respect to the $5,000,000 distribution, the estate is allowed no deduction under section 661, and no amount is included in the spouse's gross income under section 662. The $200,000 of interest paid to the spouse must be included in the spouse's gross income under section 61. Because no distributions were made to any other beneficiaries during the year, there is no need to compute the distributable net income of the other three separate shares. Thus, the taxable income of the estate for the 2000 taxable year is $2,939,400 ($3,000,000 (dividend income) minus $60,000 (expenses) and $600 (personal exemption)). The estate's $200,000 interest payment is a nondeductible personal interest expense described in section 163(h).

                Example 8.
                The will of Testator, who dies in 2000, directs the executor to distribute the X stock and all dividends therefrom to child A and the residue of the estate to child B. The estate has two separate shares consisting of the income on the X stock bequeathed to A and the residue of the estate bequeathed to B. The bequest of the X stock meets the definition of section 663(a)(1) and therefore is not a separate share. If any distributions, other than shares of the X stock, are made during the year to either A or B, then for purposes of determining the distributable net income for the separate shares, gross income attributable to dividends on the X stock must be allocated to A's separate share and any other income must be allocated to B's separate share.

                Example 9.
                The will of Testator, who dies in 2000, directs the executor to divide the residue of the estate equally between Testator's two children, A and B. The will directs the executor to fund A's share first with the proceeds of Testator's individual retirement account. The date of death value of the estate after the payment of debts, expenses, and estate taxes is $9,000,000. During 2000, the $900,000 balance in Testator's individual retirement account is distributed to the estate. The entire $900,000 is allocated to corpus under applicable local law. This amount is income in respect of a decedent within the meaning of section 691(a). The estate has two separate shares, one for the benefit of A and one for the benefit of B. If any distributions are made to either A or B during the year, then, for purposes of determining the distributable net income for each separate share, the $900,000 of income in respect of a decedent must be allocated to A's share.

                Example 10.
                The facts are the same as in Example 9, except that the will directs the executor to fund A's share first with X stock valued at $3,000,000, rather than with the proceeds of the individual retirement account. The estate has two separate shares, one for the benefit of A and one for the benefit of B. If any distributions are made to either A or B during the year, then, for purposes of determining the distributable net income for each separate share, the $900,000 of gross income attributable to the proceeds from the individual retirement account must be allocated between the two shares to the extent that they could potentially be funded with those proceeds. The maximum amount of A's share that could potentially be funded with the income in respect of decedent is $1,500,000 ($4,500,000 value of share less $3,000,000 to be funded with stock) and the maximum amount of B's share that could potentially be funded with income in respect of decedent is $4,500,000. Based upon the relative values of these amounts, the gross income attributable to the proceeds of the individual retirement account is allocated $225,000 (or one-fourth) to A's share and $675,000 (or three-fourths) to B's share.

                Example 11.
                The will of Testator, who dies in 2000, provides that after the payment of specific bequests of money, the residue of the estate is to be divided equally among the Testator's three children, A, B, and C. The will also provides that during the period of administration one-half of the income from the residue is to be paid to a designated charitable organization. After the specific bequests of money are paid, the estate initially has three equal separate shares. One share is for the benefit of the charitable organization and A, another share is for the benefit of the charitable organization and B, and the last share is for the benefit of the charitable organization and C. During the period of administration, payments of income to the charitable organization are deductible by the estate to the extent provided in section 642(c) and are not subject to the distribution provisions of sections 661 and 662.

              [T.D. 6500, 25 FR 11814, Nov. 26, 1960; 25 FR 14021, Dec. 31, 1960. Redesignated and amended by T.D. 8849, 64 FR 72543, 72544, Dec. 28, 1999; 65 FR 16317, Mar. 28, 2000]

              § 1.663(c)-6
              Effective dates.

              Sections 1.663(c)-1 through 1.663(c)-5 are applicable for estates and qualified revocable trusts within the meaning of section 645(b)(1) with respect to decedents who die on or after December 28, 1999. However, for estates and qualified revocable trusts with respect to decedents who died after the date that section 1307 of the Tax Reform Act of 1997 became effective but before December 28, 1999, the IRS will accept any reasonable interpretation of the separate share provisions, including those provisions provided in 1999-11 I.R.B. 41 (see § 601.601(d)(2)(ii)(b) of this chapter). For trusts other than qualified revocable trusts, § 1.663(c)-2 is applicable for taxable years of such trusts beginning after December 28, 1999.
              [T.D. 8849, 64 FR 72545, Dec. 28, 1999; 65 FR 16317, Mar. 28, 2000]

              § 1.664-1
              Charitable remainder trusts.
              (a) In general—(1) Introduction—(i) General description of a charitable remainder trust. Generally, a charitable remainder trust is a trust which provides for a specified distribution, at least annually, to one or more beneficiaries, at least one of which is not a charity, for life or for a term of years, with an irrevocable remainder interest to be held for the benefit of, or paid over to, charity. The specified distribution to be paid at least annually must be a sum certain which is not less than 5 percent of the initial net fair market value of all property placed in trust (in the case of a charitable remainder annuity trust) or a fixed percentage which is not less than 5 percent of the net fair market value of the trust assets, valued annually (in the case of a charitable remainder unitrust). A trust created after July 31, 1969, which is a charitable remainder trust, is exempt from all of the taxes imposed by subtitle A of the Code for any taxable year of the trust, except for a taxable year beginning before January 1, 2007, in which it has unrelated business taxable income. For taxable years beginning after December 31, 2006, an excise tax, treated as imposed by chapter 42, is imposed on charitable remainder trusts that have unrelated business taxable income. See paragraph (c) of this section.
              (ii) Scope. This section provides definitions, general rules governing the creation and administration of a charitable remainder trust, and rules governing the taxation of the trust and its beneficiaries. For the application of certain foundation rules to charitable remainder trusts, see paragraph (b) of this section. If the trust has unrelated business taxable income, see paragraph (c) of this section. For the treatment of distributions to recipients, see paragraph (d) of this section. For the treatment of distributions to charity, see paragraph (e) of this section. For the time limitations for amendment of governing instruments, see paragraph (f) of this section. For transitional rules under which particular requirements are inapplicable to certain trusts, see paragraph (g) of this section. Section 1.664-2 provides rules relating solely to a charitable remainder annuity trust. Section 1.664-3 provides rules relating solely to a charitable remainder unitrust. Section 1.664-4 provides rules governing the calculation of the fair market value of the remainder interest in a charitable remainder unitrust. For rules relating to the filing of returns for a charitable remainder trust, see paragraph (a)(6) of § 1.6012-3 and section 6034 and the regulations thereunder.
              (iii) Definitions. As used in this section and §§ 1.664-2, 1.664-3, and 1.664-4:
              (a) Charitable remainder trust. The term charitable remainder trust means a trust with respect to which a deduction is allowable under section 170, 2055, 2106, or 2522 and which meets the description of a charitable remainder annuity trust (as described in § 1.664-2) or a charitable remainder unitrust (as described in § 1.664-3).
              (b) Annuity amount. The term annuity amount means the amount described in paragraph (a)(1) of § 1.664-2 which is payable, at least annually, to the beneficiary of a charitable remainder annuity trust.
              (c) Unitrust amount. The term unitrust amount means the amount described in paragraph (a)(1) of § 1.664-3 which is payable, at least annually, to the beneficiary of a charitable remainder unitrust.
              (d) Recipient. The term recipient means the beneficiary who receives the possession or beneficial enjoyment of the annuity amount or unitrust amount.
              (e) Governing instrument. The term governing instrument has the same meaning as in section 508(e) and the regulations thereunder.
              (2) Requirement that the trust must be either a charitable remainder annuity trust or a charitable remainder unitrust. A trust is a charitable remainder trust only if it is either a charitable remainder annuity trust in every respect or a charitable remainder unitrust in every respect. For example, a trust which provides for the payment each year to a noncharitable beneficiary of the greater of a sum certain or a fixed percentage of the annual value of the trust assets is not a charitable remainder trust inasmuch as the trust is neither a charitable remainder annuity trust (for the reason that the payment for the year may be a fixed percentage of the annual value of the trust assets which is not a “sum certain”) nor a charitable remainder unitrust (for the reason that the payment for the year may be a sum certain which is not a “fixed percentage” of the annual value of the trust assets).
              (3) Restrictions on investments. A trust is not a charitable remainder trust if the provisions of the trust include a provision which restricts the trustee from investing the trust assets in a manner which could result in the annual realization of a reasonable amount of income or gain from the sale or disposition of trust assets. In the case of transactions with, or for the benefit of, a disqualified person, see section 4941(d) and the regulations thereunder for rules relating to the definition of self-dealing.
              (4) Requirement that trust must meet definition of and function exclusively as a charitable remainder trust from its creation. In order for a trust to be a charitable remainder trust, it must meet the definition of and function exclusively as a charitable remainder trust from the creation of the trust. Solely for the purposes of section 664 and the regulations thereunder, the trust will be deemed to be created at the earliest time that neither the grantor nor any other person is treated as the owner of the entire trust under subpart E, part 1, subchapter J, chapter 1, subtitle A of the Code (relating to grantors and others treated as substantial owners), but in no event prior to the time property is first transferred to the trust. For purposes of the preceding sentence, neither the grantor nor his spouse shall be treated as the owner of the trust under such subpart E merely because the grantor or his spouse is named as a recipient. See examples 1 through 3 of subparagraph (6) of this paragraph for illustrations of the foregoing rule.
              (5) Rules applicable to testamentary transfers—(i) Deferral of annuity or unitrust amount. Notwithstanding subparagraph (4) of this paragraph and §§ 1.664-2 and 1.664-3, for purposes of sections 2055 and 2106 a charitable remainder trust shall be deemed created at the date of death of the decedent (even though the trust is not funded until the end of a reasonable period of administration or settlement) if the obligation to pay the annuity or unitrust amount with respect to the property passing in trust at the death of the decedent begins as of the date of death of the decedent, even though the requirement to pay such amount is deferred in accordance with the rules provided in this subparagraph. If permitted by applicable local law or authorized by the provisions of the governing instrument, the requirement to pay such amount may be deferred until the end of the taxable year of the trust in which occurs the complete funding of the trust. Within a reasonable period after such time, the trust must pay (in the case of an underpayment) or must receive from the recipient (in the case of an overpayment) the difference between:
              (a) Any annuity or unitrust amounts actually paid, plus interest on such amounts computed at the rate of interest specified in paragraph (a)(5)(iv) of this section, compounded annually, and
              (b) The annuity or unitrust amounts payable, plus interest on such amounts computed at the rate of interest specified in paragraph (a)(5)(iv) of this section, compounded annually.
              The amounts payable shall be retroactively determined by using the taxable year, valuation method, and valuation dates which are ultimately adopted by the charitable remainder trust. See subdivision (ii) of this subparagraph for rules relating to retroactive determination of the amount payable under a charitable remainder unitrust. See paragraph (d)(4) of this section for rules relating to the year of inclusion in the case of an underpayment to a recipient and the allowance of a deduction in the case of an overpayment to a recipient.

              (ii) For purposes of retroactively determining the amount under subdivision (i)(b) of this subparagraph, the governing instrument of a charitable remainder unitrust may provide that the amount described in subdivision (i)(b) of this subparagraph with respect to property passing in trust at the death of the decedent for the period which begins on the date of death of the decedent and ends on the earlier of the date of death of the last recipient or the end of the taxable year of the trust in which occurs the complete funding of the trust shall be computed by multiplying:
              (a) The sum of (1) the value, on the earlier of the date of death of the last recipient or the last day in such taxable year, of the property held in trust which is attributable to property passing to the trust at the death of the decedent, (2) any distributions in respect of unitrust amounts made by the trust or estate before such date, and (3) interest on such distributions computed at the rate of interest specified in paragraph (a)(5)(iv) of this section, compounded annually, from the date of distribution to such date by:
              (b)(1) In the case of transfers made after November 30, 1983, for which the valuation date is before May 1, 1989, a factor equal to 1.000000 less the factor under the appropriate adjusted payout rate in Table D in § 1.664-4(e)(6) opposite the number of years in column 1 between the date of death of the decedent and the date of the earlier of the death of the last recipient or the last day of such taxable year.
              (2) In the case of transfers for which the valuation date is after April 30, 1989, a factor equal to 1.000000 less the factor under the appropriate adjusted payout rate in Table D in § 1.664-4(e)(6) opposite the number of years in column 1 between the date of death of the decedent and the date of the earlier of the death of the last recipient or the last day of such taxable year. The appropriate adjusted payout rate is determined by using the appropriate Table F contained in § 1.664-4(e)(6) for the section 7520 rate for the month of the valuation date.
              (3) If the number of years between the date of death and the date of the earlier of the death of the last recipient or the last day of such taxable year is between periods for which factors are provided, a linear interpolation must be made.
              (iii) Treatment of distributions. The treatment of a distribution to a charitable remainder trust, or to a recipient in respect of an annuity or unitrust amount, paid, credited, or required to be distributed by an estate, or by a trust which is not a charitable remainder trust, shall be governed by the rules of subchapter J, chapter 1, subtitle A of the Code other than section 664. In the case of a charitable remainder trust which is partially or fully funded during the period of administration of an estate or settlement of a trust (which is not a charitable remainder trust), the treatment of any amount paid, credited, or required to be distributed by the charitable remainder trust shall be governed by the rules of section 664.
              (iv) Rate of interest. The following rates of interest shall apply for purposes of paragraphs (a)(5) (i) through (ii) of this section:
              (a) The section 7520 rate for the month in which the valuation date with respect to the transfer is (or one of the prior two months if elected under § 1.7520-2(b)) after April 30, 1989;
              (b) 10 percent for instruments executed or amended (other than in the case of a reformation under section 2055(e)(3)) on or after August 9, 1984, and before May 1, 1989, and not subsequently amended;
              (c) 6 percent or 10 percent for instruments executed or amended (other than in the case of a reformation under section 2055(e)(3)) after October 24, 1983, and before August 9, 1984; and
              (d) 6 percent for instruments executed before October 25, 1983, and not subsequently amended (other than in the case of a reformation under section 2055(e)(3)).
              (6) Examples. The application of the rules in paragraphs (a)(4) and (a)(5) of this section require the use of actuarial factors contained in §§ 1.664-4(e) and 1.664-4A and may be illustrated by use of the following examples:

                Example 1.

                On September 19, 1971, H transfers property to a trust over which he retains an inter vivos power of revocation. The trust is to pay W 5 percent of the value of the trust assets, valued annually, for her life, remainder to charity. The trust would satisfy all of the requirements of section 664 if it were irrevocable. For purposes of section 664, the trust is not deemed created in 1971 because H is treated as the owner of the entire trust under subpart E. On May 26, 1975, H predeceases W at which time the trust becomes irrevocable. For purposes of section 664, the trust is deemed created on May 26, 1975, because that is the earliest date on which H is not treated as the owner of the entire trust under subpart E. The trust becomes a charitable remainder trust on May 26, 1975, because it meets the definition of a charitable remainder trust from its creation.

                Example 2.
                The facts are the same as in example 1, except that H retains the inter vivos power to revoke only one-half of the trust. For purposes of section 664, the trust is deemed created on September 19, 1971, because on that date the grantor is not treated as the owner of the entire trust under subpart E. Consequently, a charitable deduction is not allowable either at the creation of the trust or at H's death because the trust does not meet the definition of a charitable remainder trust from the date of its creation. The trust does not meet the definition of a charitable remainder trust from the date of its creation because the trust is subject to a partial power to revoke on such date.

                Example 3.
                The facts are the same as in example 1, except that the residue of H's estate is to be paid to the trust and the trust is required to pay H's debts. The trust is not a charitable remainder trust at H's death because it does not function exclusively as a charitable remainder trust from the date of its creation which, in this case, is the date it becomes irrevocable.

                Example 4.
                (i) In 1971, H transfers property to Trust A over which he retains an inter vivos power of revocation. Trust A, which is not a charitable remainder trust, is to provide income or corpus to W until the death of H. Upon H's death the trust is required by its governing instrument to pay the debts and administration expenses of H's estate, and then to terminate and distribute all of the remaining assets to a separate Trust B which meets the definition of a charitable remainder annuity trust.
                (ii) Trust B will be charitable remainder trust from the date of its funding because it will function exclusively as a charitable remainder trust from its creation. For purposes of section 2055, Trust B will be deemed created at H's death if the obligation to pay the annuity amount begins on the date of H's death. For purposes of section 664, Trust B becomes a charitable remainder trust as soon as it is partially or completely funded. Consequently, unless Trust B has unrelated business taxable income, the income of the trust is exempt from all taxes imposed by subtitle A of the Code, and any distributions by the trust, even before it is completely funded, are governed by the rules of section 664. Any distributions made by Trust A, including distributions to a recipient in respect of annuity amounts, are governed by the rules of subchapter J, chapter 1, subtitle A of the Code other than section 664.

                Example 5.
                In 1973, H dies testate leaving the net residue of his estate (after payment by the estate of all debts and administration expenses) to a trust which meets the definition of a charitable remainder unitrust. For purposes of section 2055, the trust is deemed created at H's death if the requirement to pay the unitrust amount begins on H's death and is a charitable remainder trust even though the estate is obligated to pay debts and administration expenses.
                For purposes of section 664, the trust becomes a charitable remainder trust as soon as it is partially or completely funded. Consequently, unless the trust has unrelated business taxable income, the income of the trust is exempt from all taxes imposed by subtitle A of the Code, and any distributions by the trust, even before it is completely funded, are governed by the rules of section 664. Any distributions made by H's estate, including distributions to a recipient in respect of unitrust amounts, are governed by the rules of subchapter J, chapter 1, subtitle A of the Code other than section 664.

                Example 6.
                (i) On January 1, 1974, H dies testate leaving the residue of his estate to a charitable remainder unitrust. The governing instrument provides that, beginning at H's death, the trustee is to make annual payments to W, on December 31 of each year of 5 percent of the net fair market value of the trust assets, valued as of December 31 of each year, for W's life and to pay the remainder to charity at the death of W. The governing instrument also provides that the actual payment of the unitrust amount need not be made until the end of the taxable year of the trust in which occurs the complete funding of the trust. The governing instrument also provides that the amount payable with respect to the period between the date of death and the end of such taxable year shall be computed under the special method provided in subparagraph (5)(ii) of this paragraph. The governing instrument provides that, within a reasonable period after the end of the taxable year of the trust in which occurs the complete funding of the trust, the trustee shall pay (in the case of an underpayment) or shall receive from the recipient (in the case of an overpayment) the difference between the unitrust amounts paid (plus interest at 6 percentage compounded annually) and the amount computed under the special method. The trust is completely funded on September 20, 1976. No amounts were paid before June 30, 1977. The trust adopts a fiscal year of July 1 to June 30. The net fair market value of the trust assets on June 30, 1977, is $100,000.

                (ii) Because no amounts were paid prior to the end of the taxable year in which the trust was completely funded, the amount payable at the end of such taxable year is equal to the net fair market value of the trust assets on the last day of such taxable year (June 30, 1977) multiplied by a factor equal to 1.0 minus the factor in Table D corresponding to the number of years in the period between the date of death and the end of such taxable year. The adjusted payout rate (determined under § 1.664-4A(c)) is 5 percent. Because the last day of the taxable year in which the trust is completely funded in June 30, 1977, there are 3 181/365 years in such period. Because there is no factor given in Table D for such a period, a linear interpolation must be made:

                    1.0 minus 0.814506 (factor at 5 percent for 4 years)
                    0.185494

                    1.0 minus 0.857375 (factor at 5 percent for 3 years)
                    .142625

                    Difference
                    .042869

                    181 ÷ 365=X ÷ 0.042869

                      X = 0.021258

                    1.0 minus 0.857375 (factor at 5 percent for 3 years
                    0.142625

                    Plus: X
                    .021258

                    Interpolated factor
                    .163883

                Thus, the amount payable for the period from January 1, 1974, to June 30, 1977, is $16,388.30 ($100,000 × 0.163883). Thereafter, the trust assets must be valued on December 31 of each year and 5 percent of such value paid annually to W for her life.

              (7) Valuation of unmarketable assets—(i) In general. If unmarketable assets are transferred to or held by a trust, the trust will not be a trust with respect to which a deduction is available under section 170, 2055, 2106, or 2522, or will be treated as failing to function exclusively as a charitable remainder trust unless, whenever the trust is required to value such assets, the valuation is—
              (a) Performed exclusively by an independent trustee; or
              (b) Determined by a current qualified appraisal from a qualified appraiser, as those terms are defined in—
              (1) Section 1.170A-13(c)(3) and 1.170A-13(c)(5), respectively, for appraisals prepared for returns or submissions filed on or before August 17, 2006;
              (2) Section 3 of Notice 2006-96, 2006-2 CB 902, for appraisals prepared for returns or submissions filed after August 17, 2006, if the donations are made before January 1, 2019; or
              (3) Section 1.170A-17(a) and 1.170A-17(b), respectively, for appraisals prepared for returns or submissions for donations made on or after January 1, 2019.
              (ii) Unmarketable assets. Unmarketable assets are assets that are not cash, cash equivalents, or other assets that can be readily sold or exchanged for cash or cash equivalents. For example, unmarketable assets include real property, closely-held stock, and an unregistered security for which there is no available exemption permitting public sale.
              (iii) Independent trustee. An independent trustee is a person who is not the grantor of the trust, a noncharitable beneficiary, or a related or subordinate party to the grantor, the grantor's spouse, or a noncharitable beneficiary (within the meaning of section 672(c) and the applicable regulations).
              (b) Application of certain foundation rules to charitable remainder trusts. See section 4947(a)(2) and section 4947(b)(3)(B) and the regulations thereunder for the application to charitable remainder trusts of certain provisions relating to private foundations. See section 508(e) for rules relating to required provisions in governing instruments prohibiting certain activities specified in section 4947(a)(2).
              (c) Excise tax on charitable remainder trusts—(1) In general. For each taxable year beginning after December 31, 2006, in which a charitable remainder annuity trust or a charitable remainder unitrust has any unrelated business taxable income, an excise tax is imposed on that trust in an amount equal to the amount of such unrelated business taxable income. For this purpose, unrelated business taxable income is as defined in section 512, determined as if part III, subchapter F, chapter 1, subtitle A of the Internal Revenue Code applied to such trust. Such excise tax is treated as imposed by chapter 42 (other than subchapter E) and is reported and payable in accordance with the appropriate forms and instructions. Such excise tax shall be allocated to corpus and, therefore, is not deductible in determining taxable income distributed to a beneficiary. (See paragraph (d)(2) of this section.) The charitable remainder trust income that is unrelated business taxable income constitutes income of the trust for purposes of determining the character of the distribution made to the beneficiary. Income of the charitable remainder trust is allocated among the charitable remainder trust income categories in paragraph (d)(1) of this section without regard to whether any part of that income constitutes unrelated business taxable income under section 512.
              (2) Examples. The application of the rules in this paragraph (c) may be illustrated by the following examples:

                Example 1.
                For 2007, a charitable remainder annuity trust with a taxable year beginning on January 1, 2007, has $60,000 of ordinary income, including $10,000 of gross income from a partnership that constitutes unrelated business taxable income to the trust. The trust has no deductions that are directly connected with that income. For that same year, the trust has administration expenses (deductible in computing taxable income) of $16,000, resulting in net ordinary income of $44,000. The amount of unrelated business taxable income is computed by taking gross income from an unrelated trade or business and deducting expenses directly connected with carrying on the trade or business, both computed with modifications under section 512(b). Section 512(b)(12) provides a specific deduction of $1,000 in computing the amount of unrelated business taxable income. Under the facts presented in this example, there are no other modifications under section 512(b). The trust, therefore, has unrelated business taxable income of $9,000 ($10,000 minus the $1,000 deduction under section 512(b)(12)). Undistributed ordinary income from prior years is $12,000 and undistributed capital gains from prior years are $50,000. Under the terms of the trust agreement, the trust is required to pay an annuity of $100,000 for year 2007 to the noncharitable beneficiary. Because the trust has unrelated business taxable income of $9,000, the excise tax imposed under section 664(c) is equal to the amount of such unrelated business taxable income, $9,000. The character of the $100,000 distribution to the noncharitable beneficiary is as follows: $56,000 of ordinary income ($44,000 from current year plus $12,000 from prior years), and $44,000 of capital gains. The $9,000 excise tax is allocated to corpus, and does not reduce the amount in any of the categories of income under paragraph (d)(1) of this section. At the beginning of year 2008, the amount of undistributed capital gains is $6,000, and there is no undistributed ordinary income.

                Example 2.
                During 2007, a charitable remainder annuity trust with a taxable year beginning on January 1, 2007, sells real estate generating gain of $40,000. Because the trust had obtained a loan to finance part of the purchase price of the asset, some of the income from the sale is treated as debt-financed income under section 514 and thus constitutes unrelated business taxable income under section 512. The unrelated debt-financed income computed under section 514 is $30,000. Assuming the trust receives no other income in 2007, the trust will have unrelated business taxable income under section 512 of $29,000 ($30,000 minus the $1,000 deduction under section 512(b)(12)). Except for section 512(b)(12), no other exceptions or modifications under sections 512-514 apply when calculating unrelated business taxable income based on the facts presented in this example. Because the trust has unrelated business taxable income of $29,000, the excise tax imposed under section 664(c) is equal to the amount of such unrelated business taxable income, $29,000. The $29,000 excise tax is allocated to corpus, and does not reduce the amount in any of the categories of income under paragraph (d)(1) of this section. Regardless of how the trust's income might be treated under sections 511-514, the entire $40,000 is capital gain for purposes of section 664 and is allocated accordingly to and within the second of the categories of income under paragraph (d)(1) of this section.

              (3) Effective/applicability date. This paragraph (c) is applicable for taxable years beginning after December 31, 2006. The rules that apply with respect to taxable years beginning before January 1, 2007, are contained in § 1.664-1(c) as in effect prior to June 24, 2008. (See 26 CFR part 1, § 1.664-1(c)(1) revised as of April 1, 2007.)
              (d) Treatment of annual distributions to recipients—(1) Character of distributions—(i) Assignment of income to categories and classes at the trust level. (a) A trust's income, including income includible in gross income and other income, is assigned to one of three categories in the year in which it is required to be taken into account by the trust. These categories are—
              (1) Gross income, other than gains and amounts treated as gains from the sale or other disposition of capital assets (referred to as the ordinary income category);
              (2) Gains and amounts treated as gains from the sale or other disposition of capital assets (referred to as the capital gains category); and
              (3) Other income (including income excluded under part III, subchapter B, chapter 1, subtitle A of the Internal Revenue Code).
              (b) Items within the ordinary income and capital gains categories are assigned to different classes based on the Federal income tax rate applicable to each type of income in that category in the year the items are required to be taken into account by the trust. For example, for a trust with a taxable year ending December 31, 2004, the ordinary income category may include a class of qualified dividend income as defined in section 1(h)(11) and a class of all other ordinary income, and the capital gains category may include separate classes for short-term and long-term capital gains and losses, such as a short-term capital gain class, a 28-percent long-term capital gain class (gains and losses from collectibles and section 1202 gains), an unrecaptured section 1250 long-term capital gain class (long-term gains not treated as ordinary income that would be treated as ordinary income if section 1250(b)(1) included all depreciation), a qualified 5-year long-term capital gain class as defined in section 1(h)(9) prior to amendment by the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA), Public Law 108-27 (117 Stat. 752), and an all other long-term capital gain class. After items are assigned to a class, the tax rates may change so that items in two or more classes would be taxed at the same rate if distributed to the recipient during a particular year. If the changes to the tax rates are permanent, the undistributed items in those classes are combined into one class. If, however, the changes to the tax rates are only temporary (for example, the new rate for one class will sunset in a future year), the classes are kept separate.
              (ii) Order of distributions. (a) The categories and classes of income (determined under paragraph (d)(1)(i) of this section) are used to determine the character of an annuity or unitrust distribution from the trust in the hands of the recipient irrespective of whether the trust is exempt from taxation under section 664(c) for the year of the distribution. The determination of the character of amounts distributed or deemed distributed at any time during the taxable year of the trust shall be made as of the end of that taxable year. The tax rate or rates to be used in computing the recipient's tax on the distribution shall be the tax rates that are applicable, in the year in which the distribution is required to be made, to the classes of income deemed to make up that distribution, and not the tax rates that are applicable to those classes of income in the year the income is received by the trust. The character of the distribution in the hands of the annuity or unitrust recipient is determined by treating the distribution as being made from each category in the following order:
              (1) First, from ordinary income to the extent of the sum of the trust's ordinary income for the taxable year and its undistributed ordinary income for prior years.
              (2) Second, from capital gain to the extent of the trust's capital gains determined under paragraph (d)(1)(iv) of this section.
              (3) Third, from other income to the extent of the sum of the trust's other income for the taxable year and its undistributed other income for prior years.
              (4) Finally, from trust corpus (with corpus defined for this purpose as the net fair market value of the trust assets less the total undistributed income (but not loss) in paragraphs (d)(1)(i)(a) (1) through (3) of this section).
              (b) If the trust has different classes of income in the ordinary income category, the distribution from that category is treated as being made from each class, in turn, until exhaustion of the class, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest Federal income tax rate. If the trust has different classes of net gain in the capital gains category, the distribution from that category is treated as being made first from the short-term capital gain class and then from each class of long-term capital gain, in turn, until exhaustion of the class, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate. If two or more classes within the same category are subject to the same current tax rate, but at least one of those classes will be subject to a different tax rate in a future year (for example, if the current rate sunsets), the order of that class in relation to other classes in the category with the same current tax rate is determined based on the future rate or rates applicable to those classes. Within each category, if there is more than one type of income in a class, amounts treated as distributed from that class are to be treated as consisting of the same proportion of each type of income as the total of the current and undistributed income of that type bears to the total of the current and undistributed income of all types of income included in that class. For example, if rental income and interest income are subject to the same current and future Federal income tax rate and, therefore, are in the same class, a distribution from that class will be treated as consisting of a proportional amount of rental income and interest income.
              (iii) Treatment of losses at the trust level—(a) Ordinary income category. A net ordinary loss for the current year is first used to reduce undistributed ordinary income for prior years that is assigned to the same class as the loss. Any excess loss is then used to reduce the current and undistributed ordinary income from other classes, in turn, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest Federal income tax rate. If any of the loss exists after all the current and undistributed ordinary income from all classes has been offset, the excess is carried forward indefinitely to reduce ordinary income for future years and retains its class assignment. For purposes of this section, the amount of current income and prior years' undistributed income shall be computed without regard to the deduction for net operating losses provided by section 172 or 642(d).
              (b) Other income category. A net loss in the other income category for the current year is used to reduce undistributed income in this category for prior years and any excess is carried forward indefinitely to reduce other income for future years.
              (iv) Netting of capital gains and losses at the trust level. Capital gains of the trust are determined on a cumulative net basis under the rules of this paragraph (d)(1) without regard to the provisions of section 1212. For each taxable year, current and undistributed gains and losses within each class are netted to determine the net gain or loss for that class, and the classes of capital gains and losses are then netted against each other in the following order. First, a net loss from a class of long-term capital gain and loss (beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate) is used to offset net gain from each other class of long-term capital gain and loss, in turn, until exhaustion of the class, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate. Second, either—
              (a) A net loss from all the classes of long-term capital gain and loss (beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate) is used to offset any net gain from the class of short-term capital gain and loss; or
              (b) A net loss from the class of short-term capital gain and loss is used to offset any net gain from each class of long-term capital gain and loss, in turn, until exhaustion of the class, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest Federal income tax rate.
              (v) Carry forward of net capital gain or loss by the trust. If, at the end of a taxable year, a trust has, after the application of paragraph (d)(1)(iv) of this section, any net loss or any net gain that is not treated as distributed under paragraph (d)(1)(ii)(a)(2) of this section, the net gain or loss is carried over to succeeding taxable years and retains its character in succeeding taxable years as gain or loss from its particular class.
              (vi) Special transitional rules. To be eligible to be included in the class of qualified dividend income, dividends must meet the definition of section 1(h)(11) and must be received by the trust after December 31, 2002. Long-term capital gain or loss properly taken into account by the trust before January 1, 1997, is included in the class of all other long-term capital gains and losses. Long-term capital gain or loss properly taken into account by the trust on or after January 1, 1997, and before May 7, 1997, if not treated as distributed in 1997, is included in the class of all other long-term capital gains and losses. Long-term capital gain or loss (other than 28-percent gain (gains and losses from collectibles and section 1202 gains), unrecaptured section 1250 gain (long-term gains not treated as ordinary income that would be treated as ordinary income if section 1250(b)(1) included all depreciation), and qualified 5-year gain as defined in section 1(h)(9) prior to amendment by JGTRRA), properly taken into account by the trust before January 1, 2003, and distributed during 2003 is treated as if it were properly taken into account by the trust after May 5, 2003. Long-term capital gain or loss (other than 28-percent gain, unrecaptured section 1250 gain, and qualified 5-year gain), properly taken into account by the trust on or after January 1, 2003, and before May 6, 2003, if not treated as distributed during 2003, is included in the class of all other long-term capital gain. Qualified 5-year gain properly taken into account by the trust after December 31, 2000, and before May 6, 2003, if not treated as distributed by the trust in 2003 or a prior year, must be maintained in a separate class within the capital gains category until distributed. Qualified 5-year gain properly taken into account by the trust before January 1, 2003, and deemed distributed during 2003 is subject to the same current tax rate as deemed distributions from the class of all other long-term capital gain realized by the trust after May 5, 2003. Qualified 5-year gain properly taken into account by the trust on or after January 1, 2003, and before May 6, 2003, if treated as distributed by the trust in 2003, is subject to the tax rate in effect prior to the amendment of section 1(h)(9) by JGTRRA.
              (vii) Application of section 643(a)(7). For application of the anti-abuse rule of section 643(a)(7) to distributions from charitable remainder trusts, see § 1.643(a)-8.
              (viii) Examples. The following examples illustrate the rules in this paragraph (d)(1):

                Example 1.
                (i) X, a charitable remainder annuity trust described in section 664(d)(1), is created on January 1, 2003. The annual annuity amount is $100. X's income for the 2003 tax year is as follows:

                    Interest income
                    $80

                    Qualified dividend income
                    50

                    Capital gains and losses
                    0

                    Tax-exempt income
                    0

                (ii) In 2003, the year this income is received by the trust, qualified dividend income is subject to a different rate of Federal income tax than interest income and is, therefore, a separate class of income in the ordinary income category. The annuity amount is deemed to be distributed from the classes within the ordinary income category, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate. Because during 2003 qualified dividend income is taxed at a lower rate than interest income, the interest income is deemed distributed prior to the qualified dividend income. Therefore, in the hands of the recipient, the 2003 annuity amount has the following characteristics:

                    Interest income
                    $80

                    Qualified dividend income
                    20

                (iii) The remaining $30 of qualified dividend income that is not treated as distributed to the recipient in 2003 is carried forward to 2004 as undistributed qualified dividend income.

                Example 2.
                (i) The facts are the same as in Example 1, and at the end of 2004, X has the following classes of income:

                    Interest income class
                    $5

                    Qualified dividend income class ($10 from 2004 and $30 carried forward from 2003)
                    40

                    Net short-term capital gain class
                    15

                    Net long-term capital loss in 28-percent class
                    (325)

                    Net long-term capital gain in unrecaptured section 1250 gain class
                    175

                    Net long-term capital gain in all other long-term capital gain class
                    350

                (ii) In 2004, gain in the unrecaptured section 1250 gain class is subject to a 25-percent Federal income tax rate, and gain in the all other long-term capital gain class is subject to a lower rate. The net long-term capital loss in the 28-percent gain class is used to offset the net capital gains in the other classes of long-term capital gain and loss, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate. The $325 net loss in the 28-percent gain class reduces the $175 net gain in the unrecaptured section 1250 gain class to $0. The remaining $150 loss from the 28-percent gain class reduces the $350 gain in the all other long-term capital gain class to $200. As in Example 1, qualified dividend income is taxed at a lower rate than interest income during 2004. The annuity amount is deemed to be distributed from all the classes in the ordinary income category and then from the classes in the capital gains category, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate. In the hands of the recipient, the 2004 annuity amount has the following characteristics:

                    Interest income
                    $ 5

                    Qualified dividend income
                    40

                    Net short-term capital gain
                    15

                    Net long-term capital gain in all other long-term capital gain class
                    40

                (iii) The remaining $160 gain in the all other long-term capital gain class that is not treated as distributed to the recipient in 2004 is carried forward to 2005 as gain in that same class.

                Example 3.
                (i) The facts are the same as in Examples 1 and 2, and at the end of 2005, X has the following classes of income:

                    Interest income class
                    $ 5

                    Qualified dividend income
                    20

                    Net loss in short-term capital gain class
                    (50)

                    Net long-term capital gain in 28-percent gain class
                    10

                    Net long-term capital gain in unrecaptured section 1250 gain class
                    135

                    Net long-term capital gain in all other long-term capital gain class (carried forward from 2004)
                    160

                (ii) There are no long-term capital losses to net against the long-term capital gains. Thus, the net short-term capital loss is used to offset the net capital gains in the classes of long-term capital gain and loss, in turn, until exhaustion of the class, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate. The $50 net short-term loss reduces the $10 net gain in the 28-percent gain class to $0. The remaining $40 net loss reduces the $135 net gain in the unrecaptured section 1250 gain class to $95. As in Examples 1 and 2, during 2005, qualified dividend income is taxed at a lower rate than interest income; gain in the unrecaptured section 1250 gain class is taxed at 25 percent; and gain in the all other long-term capital gain class is taxed at a rate lower than 25 percent. The annuity amount is deemed to be distributed from all the classes in the ordinary income category and then from the classes in the capital gains category, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate. Therefore, in the hands of the recipient, the 2005 annuity amount has the following characteristics:

                    Interest income
                    $ 5

                    Qualified dividend income
                    20

                    Unrecaptured section 1250 gain
                    75

                (iii) The remaining $20 gain in the unrecaptured section 1250 gain class and the $160 gain in the all other long-term capital gain class that are not treated as distributed to the recipient in 2005 are carried forward to 2006 as gains in their respective classes.

                Example 4.
                (i) The facts are the same as in Examples 1, 2 and 3, and at the end of 2006, X has the following classes of income:

                    Interest income class
                    $ 95

                    Qualified dividend income class
                    10

                    Net loss in short-term capital gain class
                    (20)

                    Net long-term capital loss in 28-percent gain class
                    (350)

                    Net long-term capital gain in unrecaptured section 1250 gain class (carried forward from 2005)
                    20

                    Net long-term capital gain in all other long-term capital gain class (carried forward from 2005)
                    160

                (ii) A net long-term capital loss in one class is used to offset the net capital gains in the other classes of long-term capital gain and loss, in turn, until exhaustion of the class, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate. The $350 net loss in the 28-percent gain class reduces the $20 net gain in the unrecaptured section 1250 gain class to $0. The remaining $330 net loss reduces the $160 net gain in the all other long-term capital gain class to $0. As in Examples 1, 2 and 3, during 2006, qualified dividend income is taxed at a lower rate than interest income. The annuity amount is deemed to be distributed from all the classes in the ordinary income category and then from the classes in the capital gains category, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate. In the hands of the recipient, the 2006 annuity amount has the following characteristics:

                    Interest income
                    $ 95

                    Qualified dividend income
                    5

                (iii) The remaining $5 of qualified dividend income that is not treated as distributed to the recipient in 2006 is carried forward to 2007 as qualified dividend income. The $20 net loss in the short-term capital gain class and the $170 net loss in the 28-percent gain class are carried forward to 2007 as net losses in their respective classes.

                Example 5.
                (i) X, a charitable remainder annuity trust described in section 664(d)(1), is created on January 1, 2002. The annual annuity amount is $100. Except for qualified 5-year gain of $200 realized before May 6, 2003, but not distributed, X has no other gains or losses carried over from former years. X's income for the 2007 tax year is as follows:

                    Interest income class
                    $ 10

                    Net gain in short-term capital gain class
                    5

                    Net long-term capital gain in 28-percent gain class
                    5

                    Net long-term capital gain in unrecaptured section 1250 gain class
                    10

                    Net long-term capital gain in all other long-term capital gain class
                    10

                (ii) The annuity amount is deemed to be distributed from all the classes in the ordinary income category and then from the classes in the capital gains category, beginning with the class subject to the highest Federal income tax rate and ending with the class subject to the lowest rate. In 2007, gains distributed to a recipient from both the qualified 5-year gain class and the all other long-term capital gains class are taxed at a 15/5 percent tax rate. Since after December 31, 2008, gains distributed from the qualified 5-year gain class will be taxed at a lower rate than gains distributed from the other classes of long-term capital gain and loss, distributions from the qualified 5-year gain class are made after distributions from the other classes of long-term capital gain and loss. In the hands of the recipient, the 2007 annuity amount has the following characteristics:

                    Interest income
                    $10

                    Short-term capital gain
                    5

                    28-percent gain
                    5

                    Unrecaptured section 1250 gain
                    10

                    All other long-term capital gain
                    10

                    Qualified 5-year gain (taxed as all other long-term capital gain)
                    60

                (iii) The remaining $140 of qualified 5-year gain that is not treated as distributed to the recipient in 2007 is carried forward to 2008 as qualified 5-year gain.

              (ix) Effective dates. The rules in this paragraph (d)(1) that require long-term capital gains to be distributed in the following order: first, 28-percent gain (gains and losses from collectibles and section 1202 gains); second, unrecaptured section 1250 gain (long-term gains not treated as ordinary income that would be treated as ordinary income if section 1250(b)(1) included all depreciation); and then, all other long-term capital gains are applicable for taxable years ending on or after December 31, 1998. The rules in this paragraph (d)(1) that provide for the netting of capital gains and losses are applicable for taxable years ending on or after December 31, 1998. The rule in the second sentence of paragraph (d)(1)(vi) of this section is applicable for taxable years ending on or after December 31, 1998. The rule in the third sentence of paragraph (d)(1)(vi) of this section is applicable for distributions made in taxable years ending on or after December 31, 1998. All other provisions of this paragraph (d)(1) are applicable for taxable years ending after November 20, 2003.

              (2) Allocation of deductions. Items of deduction of the trust for a taxable year of the trust which are deductible in determining taxable income (other than the deductions permitted by sections 642(b), 642(c), 661, and 1202) which are directly attributable to one or more classes of items within a category of income (determined under paragraph (d)(1)(i)(a) of this section) or to corpus shall be allocated to such classes of items or to corpus. All other allowable deductions for such taxable year which are not directly attributable to one or more classes of items within a category of income or to corpus (other than the deductions permitted by sections 642(b), 642(c), 661, and 1202) shall be allocated among the classes of items within the category (excluding classes of items with net losses) on the basis of the gross income of such classes for such taxable year reduced by the deductions allocated thereto under the first sentence of this subparagraph, but in no event shall the amount of expenses allocated to any class of items exceed such income of such class for the taxable year. Items of deduction which are not allocable under the above two sentences (other than the deductions permitted by sections 642(b), 642(c), 661, and 1202) may be allocated in any manner. All taxes imposed by chapter 42 of the Code (including without limitation taxes treated under section 664(c)(2) as imposed by chapter 42) and, for taxable years beginning prior to January 1, 2007, all taxes imposed by subtitle A of the Code for which the trust is liable because it has unrelated business taxable income, shall be allocated to corpus. Any expense which is not deductible in determining taxable income and which is not allocable to any class of items described in paragraph (d)(1)(i)(a)(3) of this section shall be allocated to corpus. The deductions allowable to a trust under sections 642(b), 642(c), 661, and 1202 are not allowed in determining the amount or character of any class of items within a category of income described in paragraph (d)(1)(i)(a) of this section or to corpus.
              (3) Allocation of income among recipients. If there are two or more recipients, each will be treated as receiving his pro rata portion of the categories of income and corpus. The application of this rule may be illustrated by the following example:

                Example.

                X transfers $40,000 to a charitable remainder annuity trust which is to pay $3,000 per year to X and $2,000 per year to Y for a term of 5 years. During the first taxable year the trust has $3,000 of ordinary income, $500 of capital gain, and $500 of tax-exempt income after allocation of all expenses. X is treated as receiving ordinary income of $1,800 ($3,000 / $5,000 × $3,000), capital gain of $300 ($3,000 / $5,000 × $500), tax exempt income of $300 ($3,000 / $5,000 × $500), and corpus of $600 ($3,000 / $5,000 × [$5,000 − $4,000]). Y is treated as receiving ordinary income of $1,200 ($2,000 / $5,000 × $3,000), capital gain of $200 ($2,000 / $5,000 × $500), tax exempt income of $200 ($2,000 / $5,000 × $500), and corpus of $400 ($2,000 / $5,000 × [$5,000 − $4,000]).

              (4) Year of inclusion—(i) General rule. To the extent required by this paragraph, the annuity or unitrust amount is includible in the recipient's gross income for the taxable year in which the annuity or unitrust amount is required to be distributed even though the annuity or unitrust amount is not distributed until after the close of the taxable year of the trust. If a recipient has a different taxable year (as defined in section 441 or 442) from the taxable year of the trust, the amount he is required to include in gross income to the extent required by this paragraph shall be included in his taxable year in which or with which ends the taxable year of the trust in which such amount is required to be distributed.
              (ii) Payments resulting from incorrect valuations. Notwithstanding subdivision (i) of this subparagraph, any payments which are made or required to be distributed by a charitable remainder trust pursuant to paragraph (a)(5) of this section, under paragraph (f)(3) of this section because of an amendment to the governing instrument, or under paragraphs (a)(1) of §§ 1.664-2 and 1.664-3 because of an incorrect valuation, shall, to the extent required by this paragraph, be included in the gross income of the recipient in his taxable year in which or with which ends the taxable year of the trust in which the amount is paid, credited, or required to be distributed. For rules relating to required adjustments of underpayments and overpayments of the annuity or unitrust amounts in respect of payments made prior to the amendment of a governing instrument, see paragraph (f)(3) of this section. There is allowable to a recipient a deduction from gross income for any amounts repaid to the trust because of an overpayment during the reasonable period of administration or settlement or until the trust is fully funded, because of an amendment, or because of an incorrect valuation, to the extent such amounts were included in his gross income. See section 1341 and the regulations thereunder for rules relating to the computation of tax where a taxpayer restores substantial amounts held under a claim of right.
              (iii) Rules applicable to year of recipient's death. If the taxable year of the trust does not end with or within the last taxable year of the recipient because of the recipient's death, the extent to which the annuity or unitrust amount required to be distributed to him is included in the gross income of the recipient for his last taxable year, or in the gross income of his estate, is determined by making the computations required under this paragraph for the taxable year of the trust in which his last taxable year ends. (The last sentence of subdivision (i) of this subparagraph does not apply to such amounts.) The gross income for the last taxable year of a recipient on the cash basis includes (to the extent required by this paragraph) amounts actually distributed to the recipient before his death. Amounts required to be distributed which are distributed to his estate, are included (to the extent required by this paragraph) in the gross income of the estate as income in respect of a decedent under section 691.
              (5) Distributions in kind. The annuity or unitrust amount may be paid in cash or in other property. In the case of a distribution made in other property, the amount paid, credited, or required to be distributed shall be considered as an amount realized by the trust from the sale or other disposition of property. The basis of the property in the hands of the recipient is its fair market value at the time it was paid, credited, or required to be distributed. The application of these rules may be illustrated by the following example:

                Example.
                On January 1, 1971, X creates a charitable remainder annuity trust, whose taxable year is the calendar year, under which X is to receive $5,000 per year. During 1971, the trust receives $500 of ordinary income. On December 31, 1971, the trust distributed cash of $500 and a capital asset of the trust having a fair market value of $4,500 and a basis of $2,200. The trust is deemed to have realized a capital gain of $2,300. X treats the distribution of $5,000 as being ordinary income of $500, capital gain of $2,300 and trust corpus of $2,200. The basis of the distributed property is $4,500 in the hands of X.

              (e) Other distributions—(1) Character of distributions. An amount distributed by the trust to an organization described in section 170(c) other than the annuity or unitrust amount shall be considered as a distribution of corpus and of those categories of income specified in paragraph (d)(1)(i)(a) of this section in an order inverse to that prescribed in such paragraph. The character of such amount shall be determined as of the end of the taxable year of the trust in which the distribution is made after the character of the annuity or unitrust amount has been determined.
              (2) Distributions in kind. In the case of a distribution of an amount to which subparagraph (1) of this paragraph applies, no gain or loss is realized by the trust by reason of a distribution in kind unless such distribution is in satisfaction of a right to receive a distribution of a specific dollar amount or in specific property other than that distributed.
              (f) Effective date—(1) General rule. The provisions of this section are effective with respect to transfers in trust made after July 31, 1969. Any trust created (within the meaning of applicable local law) prior to August 1, 1969, is not a charitable remainder trust even if it otherwise satisfies the definition of a charitable remainder trust. The provisions of paragraph § 1.664-1(a)(7)(i)(b) apply as provided in that paragraph.
              (2) Transfers to pre-1970 trusts. Property transferred to a trust created (within the meaning of applicable local law) before August 1, 1969, whose governing instrument provides that an organization described in section 170(c) receives an irrevocable remainder interest in such trust, shall, for purposes of subparagraphs (1) and (3) of this paragraph, be deemed transferred to a trust created on the date of such transfer provided that the transfer occurs after July 31, 1969, and prior to October 18, 1971, and the transferred property and any undistributed income therefrom is severed and placed in a separate trust before December 31, 1972, or if later, on or before the 30th day after the date on which any judicial proceedings begun before December 31, 1972, which are required to sever such property, become final.
              (3) Amendment of post-1969 trusts. A trust created (within the meaning of applicable local law) subsequent to July 31, 1969, and prior to December 31, 1972, which is not a charitable remainder trust at the date of its creation, may be treated as a charitable remainder trust from the date it would be deemed created under § 1.664-1(a) (4) and (5)(i) for all purposes: Provided, That all the following requirements are met:
              (i) At the time of the creation of the trust, the governing instrument provides that an organization described in section 170(c) receives an irrevocable remainder interest in such trust.

              (ii) The governing instrument of the trust is amended so that the trust will meet the definition of a charitable remainder trust and, if applicable, will meet the requirement of paragraph (a)(5)(i) of this section that obligation to make payment of the annuity or unitrust amount with respect to property passing at death begin as of the date of death, before December 31, 1972, or if later, on or before the 30th day after the date on which any judicial proceedings which are begun before December 31, 1972, and which are required to amend its governing instrument, become final. In the case of a trust created (within the meaning of applicable local law) subsequent to July 31, 1969, and prior to December 31, 1972, the provisions of section 508(d)(2)(A) shall not apply if the governing instrument of the trust is amended so as to comply with the requirements of section 508(e) before December 31, 1972, or if later, on or before the 30th day after the date on which any judicial proceedings which are begun before December 31, 1972, and which are required to amend its governing instrument, become final. Notwithstanding the provisions of paragraphs (a)(3) and (a)(4) of §§ 1.664-2 and 1.664-3, the governing instrument may grant to the trustee a power to amend the governing instrument for the sole purpose of complying with the requirements of this section and § 1.664-2 or § 1.664-3: Provided, That at the creation of the trust, the governing instrument (a) provides for the payment of a unitrust amount described in § 1.664-3(a)(1)(i) or an annuity which meets the requirements of paragraph (a)(2) of § 1.664-2 or § 1.664-3, (b) designates the recipients of the trust and the period for which the amount described in (a) of this subdivision (ii) is to be paid, and (c) provides that an organization described in section 170(c) receives an irrevocable remainder interest in such trust. The mere granting of such a power is not sufficient to meet the requirements of this subparagraph that the governing instrument be amended in the manner and within the time limitations of this subparagraph.
              (iii)(a) Where the amount of the distributions which would have been made by the trust to a recipient if the amended provisions of such trust had been in effect from the time of creation of such trust exceeds the amount of the distributions made by the trust prior to its amendment, the trust pays an amount equal to such excess to the recipient.
              (b) Where the amount of distributions made to the recipient prior to the amendment of the trust exceeds the amount of the distributions which would have been made by such trust if the amended provisions of such trust had been in effect from the time of creation of such trust, such excess is repaid to the trust by the recipient.
              See paragraph (d)(4) of this section for rules relating to the year of inclusion in the case of an underpayment to a recipient and the allowance of a deduction in the case of an overpayment to a recipient. A deduction for a transfer to a charitable remainder trust shall not be allowed until the requirements of this paragraph are met and then only if the deduction is claimed on a timely filed return (including extensions) or on a claim for refund filed within the period of limitations prescribed by section 6511(a).
              (4) Valuation of unmarketable assets. The rules contained in paragraph (a)(7) of this section are applicable for trusts created on or after December 10, 1998. A trust in existence as of December 10, 1998, whose governing instrument requires that an independent trustee value the trust's unmarketable assets may be amended or reformed to permit a valuation method that satisfies the requirements of paragraph (a)(7) of this section for taxable years beginning on or after December 10, 1998.
              (g) Transitional effective date. Notwithstanding any other provision of this section, § 1.664-2 or § 1.664-3, the requirement of paragraph (a)(5)(i) of this section that interest accrue on overpayments and underpayments, the requirement of paragraph (a)(5)(ii) of this section that the unitrust amount accruing under the formula provided therein cease with the death of the last recipient, and the requirement that the governing instrument of the trust contain the provisions specified in paragraph (a)(1)(iv) of § 1.664-2 (relating to computation of the annuity amount in certain circumstances), paragraph (a)(1)(v) of § 1.664-3 (relating to computation of the unitrust amount in certain circumstances), paragraphs (b) of §§ 1.664-2 and 1.664-3 (relating to additional contributions), and paragraph (a)(1)(iii) of § 1.664-3 (relating to incorrect valuations), paragraphs (a)(6)(iv) of §§ 1.664-2 and 1.664-3 (relating to alternative remaindermen) shall not apply to:
              (1) A will executed on or before December 31, 1972, if:
              (i) The testator dies before December 31, 1975, without having republished the will after December 31, 1972, by codicil or otherwise.
              (ii) The testator at no time after December 31, 1972, had the right to change the provisions of the will which pertain to the trust, or
              (iii) The will is not republished by codicil or otherwise before December 31, 1975, and the testator is on such date and at all times thereafter under a mental disability to republish the will by codicil or otherwise, or
              (2) A trust executed on or before December 31, 1972, if:
              (i) The grantor dies before December 31, 1975, without having amended the trust after December 31, 1972,
              (ii) The trust is irrevocable on December 31, 1972, or
              (iii) The trust is not amended before December 31, 1975, and the grantor is on such date and at all times thereafter under a mental disability to change the terms of the trust.
              [T.D. 7202, 37 FR 16913, Aug. 23, 1972]

                Editorial Note:
                For Federal Register citations affecting § 1.664-1, see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at www.govinfo.gov.

              § 1.664-2
              Charitable remainder annuity trust.
              (a) Description. A charitable remainder annuity trust is a trust which complies with the applicable provisions of § 1.664-1 and meets all of the following requirements:
              (1) Required payment of annuity amount—(i) Payment of sum certain at least annually. The governing instrument provides that the trust will pay a sum certain not less often than annually to a person or persons described in paragraph (a)(3) of this section for each taxable year of the period specified in paragraph (a)(5) of this section.
              (a) General rule applicable to all trusts. A trust will not be deemed to have engaged in an act of self-dealing (within the meaning of section 4941), to have unrelated debt-financed income (within the meaning of section 514), to have received an additional contribution (within the meaning of paragraph (b) of this section), or to have failed to function exclusively as a charitable remainder trust (within the meaning of § 1.664-1(a)(4)) merely because the annuity amount is paid after the close of the taxable year if such payment is made within a reasonable time after the close of such taxable year and the entire annuity amount in the hands of the recipient is characterized only as income from the categories described in section 664(b)(1), (2), or (3), except to the extent it is characterized as corpus described in section 664(b)(4) because—
              (1) The trust pays the annuity amount by distributing property (other than cash) that it owned at the close of the taxable year to pay the annuity amount, and the trustee elects to treat any income generated by the distribution as occurring on the last day of the taxable year in which the annuity amount is due;
              (2) The trust pays the annuity amount by distributing cash that was contributed to the trust (with respect to which a deduction was allowable under section 170, 2055, 2106, or 2522); or
              (3) The trust pays the annuity amount by distributing cash received as a return of basis in any asset that was contributed to the trust (with respect to which a deduction was allowable under section 170, 2055, 2106, or 2522), and that is sold by the trust during the year for which the annuity amount is due.
              (b) Special rule for trusts created before December 10, 1998. In addition to the circumstances described in paragraph (a)(1)(i)(a) of this section, a trust created before December 10, 1998, will not be deemed to have engaged in an act of self-dealing (within the meaning of section 4941), to have unrelated debt-financed income (within the meaning of section 514), to have received an additional contribution (within the meaning of paragraph (b) of this section), or to have failed to function exclusively as a charitable remainder trust (within the meaning of § 1.664-1(a)(4)) merely because the annuity amount is paid after the close of the taxable year if such payment is made within a reasonable time after the close of such taxable year and the sum certain to be paid each year as the annuity amount is 15 percent or less of the initial net fair market value of the property irrevocably passing in trust as determined for federal tax purposes.
              (c) Reasonable time. For this paragraph (a)(1)(i), a reasonable time will not ordinarily extend beyond the date by which the trustee is required to file Form 5227, “Split-Interest Trust Information Return,” (including extensions) for the taxable year.
              (d) Example. The following example illustrates the rules in paragraph (a)(1)(i)(a) of this section:

                Example. X

                is a charitable remainder annuity trust described in section 664(d)(1) that was created after December 10, 1998. The prorated annuity amount payable from X for Year 1 is $100. The trustee does not pay the annuity amount to the recipient by the close of Year 1. At the end of Year 1, X has only $95 in the ordinary income category under section 664(b)(1) and no income in the capital gain or tax-exempt income categories under section 664(b)(2) or (3), respectively. By April 15 of Year 2, in addition to $95 in cash, the trustee distributes to the recipient of the annuity a capital asset with a $5 fair market value and a $2 adjusted basis to pay the $100 annuity amount due for Year 1. The trust owned the asset at the end of Year 1. Under § 1.664-1(d)(5), the distribution is treated as a sale by X, resulting in X recognizing a $3 capital gain. The trustee elects to treat the capital gain as occurring on the last day of Year 1. Under § 1.664-1(d)(1), the character of the annuity amount for Year 1 in the recipient's hands is $95 of ordinary income, $3 of capital gain income, and $2 of trust corpus. For Year 1, X satisfied paragraph (a)(1)(i)(a) of this section.

              (e) Effective date. This paragraph (a)(1)(i) is applicable for taxable years ending after April 18, 1997. However, paragraphs (a)(1)(i)(a)(2) and (3) of this section apply only to distributions made on or after January 5, 2001.
              (ii) Definition of sum certain. A sum certain is a stated dollar amount which is the same either as to each recipient or as to the total amount payable for each year of such period. For example, a provision for an amount which is the same every year to A until his death and concurrently an amount which is the same every year to B until his death, with the amount to each recipient to terminate at his death, would satisfy the above rule. Similarly, provisions for an amount to A and B for their joint lives and then to the survivor would satisfy the above rule. In the case of a distribution to an organization described in section 170(c) at the death of a recipient or the expiration of a term of years, the governing instrument may provide for a reduction of the stated amount payable after such a distribution: Provided, That:
              (a) The reduced amount payable is the same either as to each recipient or as to the total amount payable for each year of the balance of such period, and
              (b) The requirements of subparagraph (2)(ii) of this paragraph are met.
              (iii) Sum certain stated as a fraction or percentage. The stated dollar amount may be expressed as a fraction or a percentage of the initial net fair market value of the property irrevocably passing in trust as finally determined for Federal tax purposes. If the stated dollar amount is so expressed and such market value is incorrectly determined by the fiduciary, the requirement of this subparagraph will be satisfied if the governing instrument provides that in such event the trust shall pay to the recipient (in the case of an undervaluation) or be repaid by the recipient (in the case of an overvaluation) an amount equal to the difference between the amount which the trust should have paid the recipient if the correct value were used and the amount which the trust actually paid the recipient. Such payments or repayments must be made within a reasonable period after the final determination of such value. Any payment due to a recipient by reason of such incorrect valuation shall be considered to be a payment required to be distributed at the time of such final determination for purposes of paragraph (d)(4)(ii) of § 1.664-1. See paragraph (d)(4) of § 1.664-1 for rules relating to the year of inclusion of such payments and the allowance of a deduction for such repayments. See paragraph (b) of this section for rules relating to future contributions. For rules relating to required adjustments for underpayments or overpayments of the amount described in this paragraph in respect of payments made during a reasonable period of administration, see paragraph (a)(5) of § 1.664-1. The application of the rule permitting the stated dollar amount to be expressed as a fraction or a percentage of the initial net fair market value of the property irrevocably passing in trust as finally determined for Federal tax purposes may be illustrated by the following example:

                Example.

                The will of X provides for the transfer of one-half of his residuary estate to a charitable remainder annuity trust which is required to pay to W for life an annuity equal to 5 percent of the initial net fair market value of the interest passing in trust as finally determined for Federal tax purposes. The annuity is to be paid on December 31 of each year computed from the date of X's death. The will also provides that if such initial net fair market value is incorrectly determined, the trust shall pay to W, in the case of an undervaluation, or be repaid by W, in the case of an overvaluation, an amount equal to the difference between the amount which the trust should have paid if the correct value were used and the amount which the trust actually paid. X dies on March 1, 1971. The executor files an estate tax return showing the value of the residuary estate as $250,000 before reduction for taxes and expenses of $50,000. The executor paid to W $4,192 ([$250,000 − $50,000] × 1/2 × 5 percent × 306/365) on December 31, 1971. On January 1, 1972, the executor transfers one-half of the residue of the estate to the trust. The trust adopts the calendar year as its taxable year. The value of the residuary estate is finally determined for Federal tax purposes to be $240,000 ($290,000 − $50,000). Accordingly, the amount which the executor should have paid to W is $5,030 ([$290,000 − $50,000] × 1/2 × 5 percent × 306 / 365). Consequently, an additional amount of $838 ($5,030 − $4,192) must be paid to W within a reasonable period after the final determination of value for Federal tax purposes.

              (iv) Computation of annuity amount in certain circumstances—(a) Short taxable years. The governing instrument provides that, in the case of a taxable year which is for a period of less than 12 months other than the taxable year in which occurs the end of the period specified in subparagraph (5) of this paragraph, the annuity amount determined under subdivision (i) of this subparagraph shall be the amount otherwise determined under that subdivision multiplied by a fraction the numerator of which is the number of days in the taxable year of the trust and the denominator of which is 365 (366 if February 29 is a day included in the numerator).
              (b) Last taxable year of period. The governing instrument provides that, in the case of the taxable year in which occurs the end of the period specified in subparagraph (5) of this paragraph, the annuity amount which must be distributed under subdivision (i) of this subparagraph shall be the amount otherwise determined under that subdivision multiplied by a fraction the numerator of which is the number of days in the period beginning on the first day of such taxable year and ending on the last day of the period specified in subparagraph (5) of this paragraph and the denominator of which is 365 (366 if February 29 is a day included in the numerator). See subparagraph (5) of this paragraph for a special rule allowing termination of payment of the annuity amount with the regular payment next preceding the termination of the period specified therein.
              (2) Minimum annuity amount—(i) General rule. The total amount payable under subparagraph (1) of this paragraph is not less than 5 percent of the initial net fair market value of the property placed in trust as finally determined for Federal tax purposes.
              (ii) Reduction of annuity amount in certain cases. A trust will not fail to meet the requirements of this subparagraph by reason of the fact that it provides for a reduction of the stated amount payable upon the death of a recipient or the expiration of a term of years provided that:
              (a) A distribution is made to an organization described in section 170(c) at the death of such recipient or the expiration of such term of years, and
              (b) The total amounts payable each year under subparagraph (1) of this paragraph after such distribution are not less than a stated dollar amount which bears the same ratio to 5 percent of the initial net fair market value of the trust assets as the net fair market value of the trust assets immediately after such distribution bears to the net fair market value of the trust assets immediately before such distribution.
              (iii) Rule applicable to inter vivos trust which does not provide for payment of minimum annuity amount. In the case where the grantor of an inter vivos trust underestimates in good faith the initial net fair market value of the property placed in trust as finally determined for Federal tax purposes and specifies a fixed dollar amount for the annuity which is less than 5 percent of the initial net fair market value of the property placed in trust as finally determined for Federal tax purposes, the trust will be deemed to have met the 5 percent requirement if the grantor or his representative consents, by appropriate agreement with the District Director, to accept an amount equal to 20 times the annuity as the fair market value of the property placed in trust for purposes of determining the appropriate charitable contributions deduction.
              (3) Permissible recipients—(i) General rule. The amount described in subparagraph (1) of this paragraph is payable to or for the use of a named person or persons, at least one of which is not an organization described in section 170(c). If the amount described in subparagraph (1) of this paragraph is to be paid to an individual or individuals, all such individuals must be living at the time of the creation of the trust. A named person or persons may include members of a named class provided that, in the case of a class which includes any individual, all such individuals must be alive and ascertainable at the time of the creation of the trust unless the period for which the annuity amount is to be paid to such class consists solely of a term of years. For example, in the case of a testamentary trust, the testator's will may provide that an amount shall be paid to his children living at his death.
              (ii) Power to alter amount paid to recipients. A trust is not a charitable remainder annuity trust if any person has the power to alter the amount to be paid to any named person other than an organization described in section 170(c) if such power would cause any person to be treated as the owner of the trust, or any portion thereof, if subpart E, part 1, subchapter J, chapter 1, subtitle A of the Code were applicable to such trust. See paragraph (a)(4) of this section for a rule permitting the retention by a grantor of a testamentary power to revoke or terminate the interest of any recipient other than an organization described in section 170(c). For example, the governing instrument may not grant the trustee the power to allocate the annuity among members of a class unless such power falls within one of the exceptions to section 674(a).
              (4) Other payments. No amount other than the amount described in subparagraph (1) of this paragraph may be paid to or for the use of any person other than an organization described in section 170(c). An amount is not paid to or for the use of any person other than an organization described in section 170(c) if the amount is transferred for full and adequate consideration. The trust may not be subject to a power to invade, alter, amend, or revoke for the beneficial use of a person other than an organization described in section 170(c). Notwithstanding the preceding sentence, the grantor may retain the power exercisable only by will to revoke or terminate the interest of any recipient other than an organization described in section 170(c). The governing instrument may provide that any amount other than the amount described in subparagraph (1) of this paragraph shall be paid (or may be paid in the discretion of the trustee) to an organization described in section 170(c) provided that in the case of distributions in kind, the adjusted basis of the property distributed is fairly representative of the adjusted basis of the property available for payment on the date of payment. For example, the governing instrument may provide that a portion of the trust assets may be distributed currently, or upon the death of one or more recipients, to an organization described in section 170(c).
              (5) Period of payment of annuity amount—(i) General rules. The period for which an amount described in subparagraph (1) of this paragraph is payable begins with the first year of the charitable remainder trust and continues either for the life or lives of a named individual or individuals or for a term of years not to exceed 20 years. Only an individual or an organization described in section 170(c) may receive an amount for the life of an individual. If an individual receives an amount for life, it must be solely for his life. Payment of the amount described in subparagraph (1) of this paragraph may terminate with the regular payment next preceding the termination of the period described in this subparagraph. The fact that the recipient may not receive such last payment shall not be taken into account for purposes of determining the present value of the remainder interest. In the case of an amount payable for a term of years, the length of the term of years shall be ascertainable with certainty at the time of the creation of the trust, except that the term may be terminated by the death of the recipient or by the grantor's exercise by will of a retained power to revoke or terminate the interest of any recipient other than an organization described in section 170(c). In any event, the period may not extend beyond either the life or lives of a named individual or individuals or a term of years not to exceed 20 years. For example, the governing instrument may not provide for the payment of an annuity amount to A for his life and then to B for a term of years because it is possible for the period to last longer than either the lives of recipients in being at the creation of the trust or a term of years not to exceed 20 years. On the other hand, the governing instrument may provide for the payment of an annuity amount to A for his life and then to B for his life or a term of years (not to exceed 20 years), whichever is shorter (but not longer), if both A and B are in being at the creation of the trust because it is not possible for the period to last longer than the lives of recipients in being at the creation of the trust.
              (ii) Relationship to 5 percent requirement. The 5 percent requirement provided in subparagraph (2) of this paragraph must be met until the termination of all of the payments described in subparagraph (1) of this paragraph. For example, the following provisions would satisfy the above rules:
              (a) An amount equal to at least 5 percent of the initial net fair market value of the property placed in trust to A and B for their joint lives and then to the survivor for his life;
              (b) An amount equal to at least 5 percent of the initial net fair market value of the property placed in trust to A for life or for a term of years not longer than 20 years, whichever is longer (or shorter);
              (c) An amount equal to at least 5 percent of the initial net fair market value of the property placed in trust to A for a term of years not longer than 20 years and then to B for life (provided B was living at the date of creation of the trust);
              (d) An amount to A for his life and concurrently an amount to B for his life (the amount to each recipient to terminate at his death) if the amount given to each individual is not less than 5 percent of the initial net fair market value of the property placed in trust; or
              (e) An amount to A for his life and concurrently an equal amount to B for his life, and at the death of the first to die, the trust to distribute one-half of the then value of its assets to an organization described in section 170(c), if the total of the amounts given to A and B is not less than 5 percent of the initial net fair market value of the property placed in trust.
              (6) Permissible remaindermen—(i) General rule. At the end of the period specified in subparagraph (5) of this paragraph the entire corpus of the trust is required to be irrevocably transferred, in whole or in part, to or for the use of one or more organizations described in section 170(c) or retained, in whole or in part, for such use.
              (ii) Treatment of trust. If all of the trust corpus is to be retained for such use, the taxable year of the trust shall terminate at the end of the period specified in subparagraph (5) of this paragraph and the trust shall cease to be treated as a charitable remainder trust for all purposes. If all or any portion of the trust corpus is to be transferred to or for the use of such organization or organizations, the trustee shall have a reasonable time after the period specified in subparagraph (5) of this paragraph to complete the settlement of the trust. During such time, the trust shall continue to be treated as a charitable remainder trust for all purposes, such as sections 664, 4947(a)(2), and 4947(b)(3)(B). Upon the expiration of such period, the taxable year of the trust shall terminate and the trust shall cease to be treated as a charitable remainder trust for all purposes. If the trust continues in existence, it will be subject to the provisions of section 4947(a)(1) unless the trust is exempt from taxation under section 501(a). For purposes of determining whether the trust is exempt under section 501(a) as an organization described in section 501(c)(3), the trust shall be deemed to have been created at the time it ceases to be treated as a charitable remainder trust.
              (iii) Concurrent or successive remaindermen. Where interests in the corpus of the trust are given to more than one organization described in section 170(c) such interests may be enjoyed by them either concurrently or successively.
              (iv) Alternative remaindermen. The governing instrument shall provide that if an organization to or for the use of which the trust corpus is to be transferred or for the use of which the trust corpus is to be retained is not an organization described in section 170(c) at the time any amount is to be irrevocably transferred to or for the use of such organization, such amount shall be transferred to or for the use of one or more alternative organizations which are described in section 170(c) at such time or retained for such use. Such alternative organization or organizations may be selected in any manner provided by the terms of the governing instrument.
              (b) Additional contributions. A trust is not a charitable remainder annuity trust unless its governing instrument provides that no additional contributions may be made to the charitable remainder annuity trust after the initial contribution. For purposes of this section, all property passing to a charitable remainder annuity trust by reason of death of the grantor shall be considered one contribution.
              (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, 1989, 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 under that section, 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 § 20.2031-7(d) of this chapter 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).
              (d) Deduction for transfers to a charitable remainder annuity trust. For rules relating to a deduction for transfers to a charitable remainder annuity trust, see section 170, 2055, 2106, or 2522 and the regulations thereunder. Any claim for deduction on any return for the value of a remainder interest in a charitable remainder annuity trust must be supported by a full statement attached to the return showing the computation of the present value of such interest. The deduction allowed by section 170 is limited to the fair market value of the remainder interest of a charitable remainder annuity trust regardless of whether an organization described in section 170(c) also receives a portion of the annuity. For a special rule relating to the reduction of the amount of a charitable contribution deduction with respect to a contribution of certain ordinary income property or capital gain property, see section 170(e)(1)(A) or 170(e)(1)(B)(i) and the regulations thereunder. For rules for postponing the time for deduction of a charitable contribution of a future interest in tangible personal property, see section 170(a)(3) and the regulations thereunder.
              (e) Effective/applicability date. Paragraph (c) applies after April 30, 1989.
              [T.D. 7202, 37 FR 16918, Aug. 23, 1972, as amended by T.D. 7955, 49 FR 19983, May 11, 1984; T.D. 8540, 59 FR 30116, June 10, 1994; T.D. 8791, 63 FR 68191, Dec. 10, 1998; T.D. 8819, 64 FR 23229, Apr. 30, 1999; T.D. 8819, Mar. 9, 2000, 65 FR 12471; T.D. 8926, 66 FR 1037, Jan. 5, 2001; T.D. 9448, 74 FR 21464, May 7, 2009; T.D. 9540, 76 FR 49595, Aug. 10, 2011]

              § 1.664-3
              Charitable remainder unitrust.
              (a) Description. A charitable remainder unitrust is a trust which complies with the applicable provisions of § 1.664-1 and meets all of the following requirements:
              (1) Required payment of unitrust amount—(i) Payment of fixed percentage at least annually—(a) General rule. The governing instrument provides that the trust will pay not less often than annually a fixed percentage of the net fair market value of the trust assets determined annually to a person or persons described in paragraph (a)(3) of this section for each taxable year of the period specified in paragraph (a)(5) of this section. This paragraph (a)(1)(i)(a) is applicable for taxable years ending after April 18, 1997.
              (b) Income exception. Instead of the amount described in (a) of this subdivision (i), the governing instrument may provide that the trust shall pay for any year either the amount described in (1) or the total of the amounts described in (1) and (2) of this subdivision (b).
              (1) The amount of trust income for a taxable year to the extent that such amount is not more than the amount required to be distributed under paragraph (a)(1)(i)(a) of this section.
              (2) An amount of trust income for a taxable year that is in excess of the amount required to be distributed under paragraph (a)(1)(i)(a) of this section for such year to the extent that (by reason of paragraph (a)(1)(i)(b)(1) of this section) the aggregate of the amounts paid in prior years was less than the aggregate of such required amounts.
              (3) For purposes of this paragraph (a)(1)(i)(b), trust income generally means income as defined under section 643(b) and the applicable regulations. However, trust income may not be determined by reference to a fixed percentage of the annual fair market value of the trust property, notwithstanding any contrary provision in applicable state law. Proceeds from the sale or exchange of any assets contributed to the trust by the donor must be allocated to principal and not to trust income at least to the extent of the fair market value of those assets on the date of their contribution to the trust. Proceeds from the sale or exchange of any assets purchased by the trust must be allocated to principal and not to trust income at least to the extent of the trust's purchase price of those assets. Except as provided in the two preceding sentences, proceeds from the sale or exchange of any assets contributed to the trust by the donor or purchased by the trust may be allocated to income, pursuant to the terms of the governing instrument, if not prohibited by applicable local law. A discretionary power to make this allocation may be granted to the trustee under the terms of the governing instrument but only to the extent that the state statute permits the trustee to make adjustments between income and principal to treat beneficiaries impartially.
              (4) The rules in paragraph (a)(1)(i)(b)(1) and (2) of this section are applicable for taxable years ending after April 18, 1997. The rule in the first sentence of paragraph (a)(1)(i)(b)(3) is applicable for taxable years ending after April 18, 1997. The rules in the second, fourth, and fifth sentences of paragraph (a)(1)(i)(b)(3) are applicable for taxable years ending after January 2, 2004. The rule in the third sentence of paragraph (a)(1)(i)(b)(3) is applicable for sales or exchanges that occur after April 18, 1997. The rule in the sixth sentence of paragraph (a)(1)(i)(b)(3) is applicable for trusts created after January 2, 2004.
              (c) Combination of methods. Instead of the amount described in paragraph (a)(1)(i)(a) or (b) of this section, the governing instrument may provide that the trust will pay not less often than annually the amount described in paragraph (a)(1)(i)(b) of this section for an initial period and then pay the amount described in paragraph (a)(1)(i)(a) of this section (calculated using the same fixed percentage) for the remaining years of the trust only if the governing instrument provides that—
              (1) The change from the method prescribed in paragraph (a)(1)(i)(b) of this section to the method prescribed in paragraph (a)(1)(i)(a) of this section is triggered on a specific date or by a single event whose occurrence is not discretionary with, or within the control of, the trustees or any other persons;
              (2) The change from the method prescribed in paragraph (a)(1)(i)(b) of this section to the method prescribed in paragraph (a)(1)(i)(a) of this section occurs at the beginning of the taxable year that immediately follows the taxable year during which the date or event specified under paragraph (a)(1)(i)(c)(1) of this section occurs; and
              (3) Following the trust's conversion to the method described in paragraph (a)(1)(i)(a) of this section, the trust will pay at least annually to the permissible recipients the amount described only in paragraph (a)(1)(i)(a) of this section and not any amount described in paragraph (a)(1)(i)(b) of this section.
              (d) Triggering event. For purposes of paragraph (a)(1)(i)(c)(1) of this section, a triggering event based on the sale of unmarketable assets as defined in § 1.664-1(a)(7)(ii), or the marriage, divorce, death, or birth of a child with respect to any individual will not be considered discretionary with, or within the control of, the trustees or any other persons.
              (e) Examples. The following examples illustrate the rules in paragraph (a)(1)(i)(c) of this section. For each example, assume that the governing instrument of charitable remainder unitrust Y provides that Y will initially pay not less often than annually the amount described in paragraph (a)(1)(i)(b) of this section and then pay the amount described in paragraph (a)(1)(i)(a) of this section (calculated using the same fixed percentage) for the remaining years of the trust and that the requirements of paragraphs (a)(1)(i)(c)(2) and (3) of this section are satisfied. The examples are as follows:

                Example 1. Y

                is funded with the donor's former personal residence. The governing instrument of Y provides for the change in method for computing the annual unitrust amount as of the first day of the year following the year in which the trust sells the residence. Y provides for a combination of methods that satisfies paragraph (a)(1)(i)(c) of this section.

                Example 2. Y

                is funded with cash and an unregistered security for which there is no available exemption permitting public sale under the Securities and Exchange Commission rules. The governing instrument of Y provides that the change in method for computing the annual unitrust amount is triggered on the earlier of the date when the stock is sold or at the time the restrictions on its public sale lapse or are otherwise lifted. Y provides for a combination of methods that satisfies paragraph (a)(1)(i)(c) of this section.

                Example 3. Y

                is funded with cash and with a security that may be publicly traded under the Securities and Exchange Commission rules. The governing instrument of Y provides that the change in method for computing the annual unitrust amount is triggered when the stock is sold. Y does not provide for a combination of methods that satisfies the requirements of paragraph (a)(1)(i)(c) of this section because the sale of the publicly-traded stock is within the discretion of the trustee.

                Example 4. S
                establishes Y for her granddaughter, G, when G is 10 years old. The governing instrument of Y provides for the change in method for computing the annual unitrust amount as of the first day of the year following the year in which G turns 18 years old. Y provides for a combination of methods that satisfies paragraph (a)(1)(i)(c) of this section.

                Example 5.
                The governing instrument of Y provides for the change in method for computing the annual unitrust amount as of the first day of the year following the year in which the donor is married. Y provides for a combination of methods that satisfies paragraph (a)(1)(i)(c) of this section.

                Example 6.
                The governing instrument of Y provides that if the donor divorces, the change in method for computing the annual unitrust amount will occur as of the first day of the year following the year of the divorce. Y provides for a combination of methods that satisfies paragraph (a)(1)(i)(c) of this section.

                Example 7.
                The governing instrument of Y provides for the change in method for computing the annual unitrust amount as of the first day of the year following the year in which the noncharitable beneficiary's first child is born. Y provides for a combination of methods that satisfies paragraph (a)(1)(i)(c) of this section.

                Example 8.
                The governing instrument of Y provides for the change in method for computing the annual unitrust amount as of the first day of the year following the year in which the noncharitable beneficiary's father dies. Y provides for a combination of methods that satisfies paragraph (a)(1)(i)(c) of this section.

                Example 9.
                The governing instrument of Y provides for the change in method for computing the annual unitrust amount as of the first day of the year following the year in which the noncharitable beneficiary's financial advisor determines that the beneficiary should begin receiving payments under the second prescribed payment method. Because the change in methods for paying the unitrust amount is triggered by an event that is within a person's control, Y does not provide for a combination of methods that satisfies paragraph (a)(1)(i)(c) of this section.

                Example 10.
                The governing instrument of Y provides for the change in method for computing the annual unitrust amount as of the first day of the year following the year in which the noncharitable beneficiary submits a request to the trustee that the trust convert to the second prescribed payment method. Because the change in methods for paying the unitrust amount is triggered by an event that is within a person's control, Y
                  does not provide for a combination of methods that satisfies paragraph (a)(1)(i)(c) of this section.

              (f) Effective date—(1) General rule. Paragraphs (a)(1)(i)(c), (d), and (e) of this section are applicable for charitable remainder trusts created on or after December 10, 1998.
              (2) General rule regarding reformations of combination of method unitrusts. If a trust is created on or after December 10, 1998, and contains a provision allowing a change in calculating the unitrust amount that does not comply with the provisions of paragraph (a)(1)(i)(c) of this section, the trust will qualify as a charitable remainder unitrust only if it is amended or reformed to use the initial method for computing the unitrust amount throughout the term of the trust, or is reformed in accordance with paragraph (a)(1)(i)(f)(3) of this section. If a trust was created before December 10, 1998, and contains a provision allowing a change in calculating the unitrust amount that does not comply with the provisions of paragraph (a)(1)(i)(c) of this section, the trust may be reformed to use the initial method for computing the unitrust amount throughout the term of the trust without causing the trust to fail to function exclusively as a charitable remainder unitrust under § 1.664-1(a)(4), or may be reformed in accordance with paragraph (a)(1)(i)(f)(3) of this section. Except as provided in paragraph (a)(1)(i)(f)(3) of this section, a qualified charitable remainder unitrust will not continue to qualify as a charitable remainder unitrust if it is amended or reformed to add a provision allowing a change in the method for calculating the unitrust amount.
              (3) Special rule for reformations of trusts that begin by June 8, 1999. Notwithstanding paragraph (a)(1)(i)(f)(2) of this section, if a trust either provides for payment of the unitrust amount under a combination of methods that is not permitted under paragraph (a)(1)(i)(c) of this section, or provides for payment of the unitrust amount under only the method prescribed in paragraph (a)(1)(i)(b) of this section, then the trust may be reformed to allow for a combination of methods permitted under paragraph (a)(1)(i)(c) of this section without causing the trust to fail to function exclusively as a charitable remainder unitrust under § 1.664-1(a)(4) or to engage in an act of self-dealing under section 4941 if the trustee begins legal proceedings to reform by June 8, 1999. The triggering event under the reformed governing instrument may not occur in a year prior to the year in which the court issues the order reforming the trust, except for situations in which the governing instrument prior to reformation already provided for payment of the unitrust amount under a combination of methods that is not permitted under paragraph (a)(1)(i)(c) of this section and the triggering event occurred prior to the reformation.
              (g) Payment under general rule for fixed percentage trusts. When the unitrust amount is computed under paragraph (a)(1)(i)(a) of this section, a trust will not be deemed to have engaged in an act of self-dealing (within the meaning of section 4941), to have unrelated debt-financed income (within the meaning of section 514), to have received an additional contribution (within the meaning of paragraph (b) of this section), or to have failed to function exclusively as a charitable remainder trust (within the meaning of § 1.664-1(a)(4)) merely because the unitrust amount is paid after the close of the taxable year if such payment is made within a reasonable time after the close of such taxable year and the entire unitrust amount in the hands of the recipient is characterized only as income from the categories described in section 664(b)(1), (2), or (3), except to the extent it is characterized as corpus described in section 664(b)(4) because—
              (1) The trust pays the unitrust amount by distributing property (other than cash) that it owned at the close of the taxable year, and the trustee elects to treat any income generated by the distribution as occurring on the last day of the taxable year in which the unitrust amount is due;
              (2) The trust pays the unitrust amount by distributing cash that was contributed to the trust (with respect to which a deduction was allowable under section 170, 2055, 2106, or 2522); or
              (3) The trust pays the unitrust amount by distributing cash received as a return of basis in any asset that was contributed to the trust (with respect to which a deduction was allowable under section 170, 2055, 2106, or 2522), and that is sold by the trust during the year for which the unitrust amount is due.
              (h) Special rule for fixed percentage trusts created before December 10, 1998. When the unitrust amount is computed under paragraph (a)(1)(i)(a) of this section, a trust created before December 10, 1998, will not be deemed to have engaged in an act of self-dealing (within the meaning of section 4941), to have unrelated debt-financed income (within the meaning of section 514), to have received an additional contribution (within the meaning of paragraph (b) of this section), or to have failed to function exclusively as a charitable remainder trust (within the meaning of § 1.664-1(a)(4)) merely because the unitrust amount is paid after the close of the taxable year if such payment is made within a reasonable time after the close of such taxable year and the fixed percentage to be paid each year as the unitrust amount is 15 percent or less of the net fair market value of the trust assets as determined under paragraph (a)(1)(iv) of this section.
              (i) Example. The following example illustrates the rules in paragraph (a)(1)(i)(g) of this section:

                Example. X

                is a charitable remainder unitrust that calculates the unitrust amount under paragraph (a)(1)(i)(a) of this section. X was created after December 10, 1998. The prorated unitrust amount payable from X for Year 1 is $100. The trustee does not pay the unitrust amount to the recipient by the end of the Year 1. At the end of Year 1, X has only $95 in the ordinary income category under section 664(b)(1) and no income in the capital gain or tax-exempt income categories under section 664(b) (2) or (3), respectively. By April 15 of Year 2, in addition to $95 in cash, the trustee distributes to the unitrust recipient a capital asset with a $5 fair market value and a $2 adjusted basis to pay the $100 unitrust amount due for Year 1. The trust owned the asset at the end of Year 1. Under § 1.664-1(d)(5), the distribution is treated as a sale by X, resulting in X recognizing a $3 capital gain. The trustee elects to treat the capital gain as occurring on the last day of Year 1. Under § 1.664-1(d)(1), the character of the unitrust amount for Year 1 in the recipient's hands is $95 of ordinary income, $3 of capital gain income, and $2 of trust corpus. For Year 1, X satisfied paragraph (a)(1)(i)(g) of this section.

              (j) Payment under income exception. When the unitrust amount is computed under paragraph (a)(1)(i)(b) of this section, a trust will not be deemed to have engaged in an act of self-dealing (within the meaning of section 4941), to have unrelated debt-financed income (within the meaning of section 514), to have received an additional contribution (within the meaning of paragraph (b) of this section), or to have failed to function exclusively as a charitable remainder trust (within the meaning of § 1.664-1(a)(4)) merely because payment of the unitrust amount is made after the close of the taxable year if such payment is made within a reasonable time after the close of such taxable year.
              (k) Reasonable time. For paragraphs (a)(1)(i) (g), (h), and (j) of this section, a reasonable time will not ordinarily extend beyond the date by which the trustee is required to file Form 5227, “Split-Interest Trust Information Return,” (including extensions) for the taxable year.
              (l) Effective date. Paragraphs (a)(1)(i) (g), (h), (i), (j), and (k) of this section are applicable for taxable years ending after April 18, 1997. Paragraphs (a)(1)(i)(g)(2) and (3) apply only to distributions made on or after January 5, 2001.
              (ii) Definition of fixed percentage. The fixed percentage may be expressed either as a fraction or as a percentage and must be payable each year in the period specified in subparagraph (5) of this paragraph. A percentage is fixed if the percentage is the same either as to each recipient or as to the total percentage payable each year of such period. For example, provision for a fixed percentage which is the same every year to A until his death and concurrently a fixed percentage which is the same every year to B until his death, the fixed percentage to each recipient to terminate at his death, would satisfy the rule. Similarly, provision for a fixed percentage to A and B for their joint lives and then to the survivor would satisfy the rule. In the case of a distribution to an organization described in section 170(c) at the death of a recipient or the expiration of a term of years, the governing instrument may provide for a reduction of the fixed percentage payable after such distribution Provided That:
              (a) The reduced fixed percentage is the same either as to each recipient or as to the total amount payable for each year of the balance of such period, and
              (b) The requirements of subparagraph (2)(ii) of this paragraph are met.
              (iii) Rules applicable to incorrect valuations. The governing instrument provides that in the case where the net fair market value of the trust assets is incorrectly determined by the fiduciary, the trust shall pay to the recipient (in the case of an undervaluation) or be repaid by the recipient (in the case of an overvaluation) an amount equal to the difference between the amount which the trust should have paid the recipient if the correct value were used and the amount which the trust actually paid the recipient. Such payments or repayments must be made within a reasonable period after the final determination of such value. Any payment due to a recipient by reason of such incorrect valuation shall be considered to be a payment required to be distributed at the time of such final determination for purposes of paragraph (d)(4)(ii) of § 1.664-1. See paragraph (d)(4) of § 1.664-1 for rules relating to the year of inclusion of such payments and the allowance of a deduction for such repayments. See paragraph (b) of this section for rules relating to additional contributions.
              (iv) Rules applicable to valuation. In computing the net fair market value of the trust assets there shall be taken into account all assets and liabilities without regard to whether particular items are taken into account in determining the income of the trust. The net fair market value of the trust assets may be determined on any one date during the taxable year of the trust, or by taking the average of valuations made on more than one date during the taxable year of the trust, so long as the same valuation date or dates and valuation methods are used each year. If the governing instrument does not specify the valuation date or dates, the trustee must select such date or dates and indicate the selection on the first return on Form 5227, “Split-Interest Trust Information Return,” that the trust must file. The amount described in subdivision (i)(a) of this subparagraph which must be paid each year must be based upon the valuation for such year.
              (v) Computation of unitrust amount in certain circumstances—(a) Short taxable years. The governing instrument provides that, in the case of a taxable year which is for a period of less than 12 months other than the taxable year in which occurs the end of the period specified in subparagraph (5) of this paragraph:
              (1) The amount determined under subdivision (i)(a) of this subparagraph shall be the amount otherwise determined under that subdivision multiplied by a fraction the numerator of which is the number of days in the taxable year of the trust and the denominator of which is 365 (366 if February 29 is a day included in the numerator),
              (2) The amount determined under subdivision (i)(b) of this subparagraph shall be computed by using the amount determined under subdivision (a)(1) of this subdivision (v), and
              (3) If no valuation date occurs before the end of the taxable year of the trust, the trust assets shall be valued as of the last day of the taxable year of the trust.
              (b) Last taxable year of period. (1) The governing instrument provides that, in the case of the taxable year in which occurs the end of the period specified in subparagraph (5) of this paragraph:
              (i) The unitrust amount which must be distributed under subdivision (i)(a) of this subparagraph shall be the amount otherwise determined under that subdivision multiplied by a fraction the numerator of which is the number of days in the period beginning on the first day of such taxable year and ending on the last day of the period specified in subparagraph (5) of this paragraph and the denominator of which is 365 (366 if February 29 is a day included in the numerator),
              (ii) The amount determined under subdivision (i)(b) of this subparagraph shall be computed by using the amount determined under (b)(1)(i) of this subdivision (v), and
              (iii) If no valuation date occurs before the end of such period, the trust assets shall be valued as of the last day of such period.
              (2) See subparagraph (5) of this paragraph for a special rule allowing termination of payment of the unitrust amount with the regular payment next preceding the termination of the period specified therein.
              (2) Minimum unitrust amount—(i) General rule. The fixed percentage described in subparagraph (1)(i) of this paragraph with respect to all beneficiaries taken together is not less than 5 percent.
              (ii) Reduction of unitrust amount in certain cases. A trust will not fail to meet the requirements of this subparagraph by reason of the fact that it provides for a reduction of the fixed percentage payable upon the death of a recipient or the expiration of a term of years Provided That:
              (a) A distribution is made to an organization described in section 170(c) at the death of such recipient or the expiration of such term of years, and
              (b) The total of the percentage payable under subparagraph (1) of this paragraph after such distribution is not less than 5 percent.
              (3) Permissible recipients—(i) General rule. The amount described in subparagraph (1) of this paragraph is payable to or for the use of a named person or persons, at least one of which is not an organization described in section 170(c). If the amount described in subparagraph (1) of this paragraph is to be paid to an individual or individuals, all such individuals must be living at the time of creation of the trust. A named person or persons may include members of a named class except in the case of a class which includes any individual, all such individuals must be alive and ascertainable at the time of the creation of the trust unless the period for which the unitrust amount is to be paid to such class consists solely of a term of years. For example, in the case of a testamentary trust, the testator's will may provide that the required amount shall be paid to his children living at his death.
              (ii) Power to alter amount paid to recipients. A trust is not a charitable remainder unitrust if any person has the power to alter the amount to be paid to any named person other than an organization described in section 170(c) if such power would cause any person to be treated as the owner of the trust, or any portion thereof, if subpart E, part 1, subchapter J, chapter 1, subtitle A of the Code were applicable to such trust. See paragraph (a)(4) of this section for a rule permitting the retention by a grantor of a testamentary power to revoke or terminate the interest of any recipient other than an organization described in section 170(c). For example, the governing instrument may not grant the trustee the power to allocate the fixed percentage among members of a class unless such power falls within one of the exceptions to section 674(a).
              (4) Other payments. No amount other than the amount described in subparagraph (1) of this paragraph may be paid to or for the use of any person other than an organization described in section 170(c). An amount is not paid to or for the use of any person other than an organization described in section 170(c) if the amount is transferred for full and adequate consideration. The trust may not be subject to a power to invade, alter, amend, or revoke for the beneficial use of a person other than an organization described in section 170(c). Notwithstanding the preceding sentence, the grantor may retain the power exercisable only by will to revoke or terminate the interest of any recipient other than an organization described in section 170(c). The governing instrument may provide that any amount other than the amount described in subparagraph (1) of this paragraph shall be paid (or may be paid in the discretion of the trustee) to an organization described in section 170(c) provided that, in the case of distributions in kind, the adjusted basis of the property distributed is fairly representative of the adjusted basis of the property available for payment on the date of payment. For example, the governing instrument may provide that a portion of the trust assets may be distributed currently, or upon the death of one or more recipients, to an organization described in section 170(c).
              (5) Period of payment of unitrust amount—(i) General rules. The period for which an amount described in subparagraph (1) of this paragraph is payable begins with the first year of the charitable remainder trust and continues either for the life or lives of a named individual or individuals or for a term of years not to exceed 20 years. Only an individual or an organization described in section 170(c) may receive an amount for the life of an individual. If an individual receives an amount for life, it must be solely for his life. Payment of the amount described in subparagraph (1) of this paragraph may terminate with the regular payment next preceding the termination of the period described in this subparagraph. The fact that the recipient may not receive such last payment shall not be taken into account for purposes of determining the present value of the remainder interest. In the case of an amount payable for a term of years, the length of the term of years shall be ascertainable with certainty at the time of the creation of the trust, except that the term may be terminated by the death of the recipient or by the grantor's exercise by will of a retained power to revoke or terminate the interest of any recipient other than an organization described in section 170(c). In any event, the period may not extend beyond either the life or lives of a named individual or individuals or a term of years not to exceed 20 years. For example, the governing instrument may not provide for the payment of a unitrust amount to A for his life and then to B for a term of years because it is possible for the period to last longer than either the lives of recipients in being at the creation of the trust or a term of years not to exceed 20 years. On the other hand, the governing instrument may provide for the payment of a unitrust amount to A for his life and then to B for his life or a term of years (not to exceed 20 years), whichever is shorter (but not longer), if both A and B are in being at the creation of the trust because it is not possible for the period to last longer than the lives of recipients in being at the creation of the trust.
              (ii) Relationship to 5 percent requirement. The 5 percent requirement provided in subparagraph (2) of this paragraph must be met until the termination of all of the payments described in subparagraph (1) of this paragraph. For example, the following provisions would satisfy the above rules:
              (a) A fixed percentage of at least 5 percent to A and B for their joint lives and then to the survivor for his life;
              (b) A fixed percentage of at least 5 percent to A for life or for a term of years not longer than 20 years, whichever is longer (or shorter);
              (c) A fixed percentage of at least 5 percent to A for life or for a term of years not longer than 20 years and then to B for life (provided B was living at the creation of the trust);
              (d) A fixed percentage to A for his life and concurrently a fixed percentage to B for his life (the percentage to each recipient to terminate at his death) if the percentage given to each individual is not less than 5 percent;
              (e) A fixed percentage to A for his life and concurrently an equal percentage to B for his life, and at the death of the first to die, the trust to distribute one-half of the then value of its assets to an organization described in section 170(c) if the total of the percentages is not less than 5 percent for the entire period described in this subparagraph.
              (6) Permissible remaindermen—(i) General rule. At the end of the period specified in subparagraph (5) of this paragraph, the entire corpus of the trust is required to be irrevocably transferred, in whole or in part, to or for the use of one or more organizations described in section 170(c) or retained, in whole or in part, for such use.
              (ii) Treatment of trust. If all of the trust corpus is to be retained for such use, the taxable year of the trust shall terminate at the end of the period specified in subparagraph (5) of this paragraph and the trust shall cease to be treated as a charitable remainder trust for all purposes. If all or any portion of the trust corpus is to be transferred to or for the use of such organization or organizations, the trustee shall have a reasonable time after the period specified in subparagraph (5) of this paragraph to complete the settlement of the trust. During such time, the trust shall continue to be treated as a charitable remainder trust for all purposes, such as section 664, 4947(a)(2), and 4947(b)(3)(B). Upon the expiration of such period, the taxable year of the trust shall terminate and the trust shall cease to be treated as a charitable remainder trust for all purposes. If the trust continues in existence, it will be subject to the provisions of section 4947(a)(1) unless the trust is exempt from taxation under section 501(a). For purposes of determining whether the trust is exempt under section 501(a) as an organization described in section 501(c)(3), the trust shall be deemed to have been created at the time it ceases to be treated as a charitable remainder trust.
              (iii) Concurrent or successive remaindermen. Where interests in the corpus of the trust are given to more than one organization described in section 170(c) such interests may be enjoyed by them either concurrently or successively.
              (iv) Alternative remaindermen. The governing instrument shall provide that if an organization to or for the use of which the trust corpus is to be transferred or for the use of which the trust corpus is to be retained is not an organization described in section 170(c) at the time any amount is to be irrevocably transferred to or for the use of such organization, such amount shall be transferred to or for the use of or retained for the use of one or more alternative organizations which are described in section 170(c) at such time. Such alternative organization or organizations may be selected in any manner provided by the terms of the governing instrument.
              (b) Additional contributions. A trust is not a charitable remainder annuity trust unless its governing instrument either prohibits additional contributions to the trust after the initial contribution or provides that for the taxable year of the trust in which the additional contribution is made:
              (1) Where no valuation date occurs after the time of the contribution and during the taxable year in which the contribution is made, the additional property shall be valued as of the time of contribution; and
              (2) The amount described in paragraph (a)(1)(i)(a) of this section shall be computed by multiplying the fixed percentage by the sum of (i) the net fair market value of the trust assets (excluding the value of the additional property and any earned income from and any appreciation on such property after its contribution), and (ii) that proportion of the value of the additional property (that was excluded under subdivision (i) of this paragraph), which the number of days in the period which begins with the date of contribution and ends with the earlier of the last day of such taxable year or the last day of the period described in paragraph (a)(5) of this section bears to the number of days in the period which begins with the first day of such taxable year and ends with the earlier of the last day of such taxable year or the last day of the period described in paragraph (a)(5) of this section.

              For purposes of this section, all property passing to a charitable remainder unitrust by reason of death of the grantor shall be considered one contribution. The application of the preceding rules may be illustrated by the following examples:

                Example 1.
                On March 2, 1971, X makes an additional contribution of property to a charitable remainder unitrust. The taxable year of the trust is the calendar year and the regular valuation date is January 1 of each year. For purposes of computing the required payout with respect to the additional contribution for the year of contribution, the additional contribution is valued on March 2, 1971, the time of contribution. The property had a value on that date of $5,000. Income from such property in the amount of $250 was received on December 31, 1971. The required payout with respect to the additional contribution for the year of contribution is $208 (5 percent × $5,000 × 305/365). The income earned after the date of the contribution and after the regular valuation date does not enter into the computation.

                Example 2.
                On July 1, 1971, X makes an additional contribution of $10,000 to a charitable remainder unitrust. The taxable year of the trust is the calendar year and the regular valuation date is December 31 of each year. The fixed percentage is 5 percent. Between July 1, 1971, and December 31, 1971, the additional property appreciates in value to $12,500 and earns $500 of income. Because the regular valuation date for the year of contribution occurs after the date of the additional contribution, the additional contribution including income earned by it is valued on the regular valuation date. Thus, the required payout with respect to the additional contribution is $325.87 (5 percent × [$12,500 + $500] × 183/365).

              (c) Calculation of the fair market value of the remainder interest of a charitable remainder unitrust. See § 1.664-4 for rules relating to the calculation of the fair market value of the remainder interest of a charitable remainder unitrust.
              (d) Deduction for transfers to a charitable remainder unitrust. For rules relating to a deduction for transfers to a charitable remainder unitrust, see section 170, 2055, 2106, or 2522 and the regulations thereunder. The deduction allowed by section 170 for transfers to charity is limited to the fair market value of the remainder interest of a charitable remainder unitrusts regardless of whether an organization described in section 170(c) also receives a portion of the amount described in § 1.664-3(a)(1). For a special rule relating to the reduction of the amount of a charitable contribution deduction with respect to a contribution of certain ordinary income property or capital gain property, see section 170(e)(1) (A) or (B)(i) and the regulations thereunder. For rules for postponing the time for deduction of a charitable contribution of a future interest in tangible personal property, see section 170(a)(3) and the regulations thereunder.
              [T.D. 7202, 37 FR 16920, Aug. 23, 1972, as amended by T.D. 8791, 63 FR 68192, Dec. 10, 1998; T.D. 8926, 66 FR 1038, Jan. 5, 2001; T.D. 9102, 69 FR 20, Jan. 2, 2004]

              § 1.664-4
              Calculation of the fair market value of the remainder interest in a charitable remainder unitrust.
              (a) Rules for determining present value. For purposes of sections 170, 2055, 2106, and 2522, the fair market value of a remainder interest in a charitable remainder unitrust (as described in § 1.664-3) is its present value determined under paragraph (d) of this section. The present value determined under this section shall be computed on the basis of—

              (1) Life contingencies determined as to each life involved, from the values of lx set forth in Table 2000CM contained in § 20.2031-7(d)(7) of this chapter 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 transfers 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;
              (2) Interest at the section 7520 rate in the case of transfers for which the valuation date is after April 30, 1989, or 10 percent in the case of transfers to charitable remainder unitrusts made after November 30, 1983, for which the valuation date is before May 1, 1989. See § 20.2031-7A (a) through (c) of this chapter, whichever is applicable, for transfers for which the valuation date is before December 1, 1983; and

              (3) The assumption that the amount described in § 1.664-3(a)(1)(i)(a) is distributed in accordance with the payout sequence described in the governing instrument. If the governing instrument does not prescribe when the distribution is made during the period for which the payment is made, for purposes of this section, the distribution is considered payable on the first day of the period for which the payment is made.
              (b) Actuarial Computations by the Internal Revenue Service. The regulations in this and in related sections provide tables of actuarial factors and examples that illustrate the use of the tables in determining the value of remainder interests in property. Section 1.7520-1(c)(2) refers to government publications that provide additional tables of factors and examples of computations for more complex situations. If the computation requires the use of a factor that is not provided in this section, the Commissioner may supply the factor upon a request for a ruling. A request for a ruling must be accompanied by a recitation of the facts including the date of birth of each measuring life, and copies of the relevant documents. A request for a ruling must comply with the instructions for requesting a ruling published periodically in the Internal Revenue Bulletin (See § 601.601(d)(2)(ii)(b) of this chapter) and include payment of the required user fee. If the Commissioner furnishes the factor, a copy of the letter supplying the factor should be attached to the tax return in which the deduction is claimed. If the Commissioner does not furnish the factor, the taxpayer must furnish a factor computed in accordance with the principles set forth in this section.

              (c) Statement supporting deduction required. Any claim for a deduction on any return for the value of a remainder interest in a charitable remainder unitrust must be supported by a full statement attached to the return showing the computation of the present value of such interest.
              (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

                  After
                  Before

                    Applicable 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) Adjusted payout rate. For transfers for which the valuation date is after April 30, 1989, the adjusted payout rate is determined by using the appropriate Table F in paragraph (e)(6) of this section, for the section 7520 interest rate applicable to the transfer. If the interest rate is between 4.2 and 14 percent, see paragraph (e)(6) of this section. If the interest rate is below 4.2 percent or greater than 14 percent, see paragraph (b) of this section. The adjusted payout rate is determined by multiplying the fixed percentage described in § 1.664-3(a)(1)(i)(a) by the factor describing the payout sequence of the trust and the number of months by which the valuation date for the first full taxable year of the trust precedes the first payout date for such taxable year. If the governing instrument does not prescribe when the distribution or distributions shall be made during the taxable year of the trust, see paragraph (a) of this section. In the case of a trust having a payout sequence for which no figures have been provided by the appropriate table, and in the case of a trust that determines the fair market value of the trust assets by taking the average of valuations on more than one date during the taxable year, see paragraph (b) of this section.
              (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 November 30, 1983, is the factor under the appropriate adjusted payout rate in Table D of paragraph (e)(6) of this section 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. 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. However, 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 date of transfer falls, the month so elected is the valuation date for purposes of determining the interest rate and mortality tables. In the case of a testamentary transfer under section 2055, 2106, or 2624, the valuation date is the date of death, unless the alternate valuation date is elected under 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 application of this paragraph (e)(4) may be illustrated by the following example:

                Example.
                D transfers $100,000 to a charitable remainder unitrust on January 1. The trust instrument requires that the trust pay 8 percent of the fair market value of the trust assets as of January 1st for a term of 12 years to D in quarterly payments (March 31, June 30, September 30, and December 31). The section 7520 rate for January (the month that the transfer occurred) is 9.6 percent. Under Table F(9.6) in paragraph (e)(6) of this section, the appropriate adjustment factor is .944628 for quarterly payments payable at the end of each quarter. The adjusted payout rate is 7.557 (8% × .944628). Based on the remainder factors in Table D in paragraph (e)(6) of this section, the present value of the remainder interest is $38,950.30, computed as follows:

                    Factor at 7.4 percent for 12 years
                    .397495

                    Factor at 7.6 percent for 12 years
                    .387314

                    Difference
                    .010181

                Interpolation adjustment:

                  ER12JN00.002

                    Factor at 7.4 percent for 12 years
                    .397495

                    Less: Interpolation adjustment
                    .007992

                    Interpolated factor
                    .389503

                Present value of remainder interest:

                ($100,000 × .389503)..........$38,950.30

              (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 paragraph (e)(4) of this section) 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 paragraph (b) of this section.

              (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 paragraph (e)(6) of this section, the appropriate adjustment factor is .953317 for semiannual payments payable at the end of the semiannual period. The adjusted payout rate is 7.627% (8% × .953317). Based on the remainder factors in Table U(1) in this section, the present value of the remainder interest is $11,075.00, computed as follows:

                  ER10AU11.023

              (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 Paragraph (e)(5) of this section. See, however, § 1.7520-3(b) (relating to exceptions to the use of prescribed tables under certain circumstances). Many actuarial factors not contained in the following tables are contained in Internal Revenue Service Publication 1458, “Actuarial Valuations Version 3B” (2009). This publication will be available beginning May 1, 2009, at no charge, electronically via the IRS Internet site at http://www.irs.gov.

                Table D—Showing the Present Worth of a Remainder Interest Postponed for a Term Certain in a Charitable Remainder Unitrust
                [Applicable after April 30, 1989]

                  Years
                  Adjusted payout rate
                  4.2%
                  4.4%
                  4.6%
                  4.8%
                  5.0%
                  5.2%
                  5.4%
                  5.6%
                  5.8%
                  6.0%

                  1
                  .958000
                  .956000
                  .954000
                  .952000
                  .950000
                  .948000
                  .946000
                  .944000
                  .942000
                  .940000

                  2
                  .917764
                  .913936
                  .910116
                  .906304
                  .902500
                  .898704
                  .894916
                  .891136
                  .887364
                  .883600

                  3
                  .879218
                  .873723
                  .868251
                  .862801
                  .857375
                  .851971
                  .846591
                  .841232
                  .835897
                  .830584

                  4
                  .842291
                  .835279
                  .828311
                  .821387
                  .814506
                  .807669
                  .800875
                  .794123
                  .787415
                  .780749

                  5
                  .806915
                  .798527
                  .790209
                  .781960
                  .773781
                  .765670
                  .757627
                  .749652
                  .741745
                  .733904

                  6
                  .773024
                  .763392
                  .753859
                  .744426
                  .735092
                  .725855
                  .716716
                  .707672
                  .698724
                  .689870

                  7
                  .740557
                  .729802
                  .719182
                  .708694
                  .698337
                  .688111
                  .678013
                  .668042
                  .658198
                  .648478

                  8
                  .709454
                  .697691
                  .686099
                  .674677
                  .663420
                  .652329
                  .641400
                  .630632
                  .620022
                  .609569

                  9
                  .679657
                  .666993
                  .654539
                  .642292
                  .630249
                  .618408
                  .606765
                  .595317
                  .584061
                  .572995

                  10
                  .651111
                  .637645
                  .624430
                  .611462
                  .598737
                  .586251
                  .573999
                  .561979
                  .550185
                  .538615

                  11
                  .623764
                  .609589
                  .595706
                  .582112
                  .568800
                  .555766
                  .543003
                  .530508
                  .518275
                  .506298

                  12
                  .597566
                  .582767
                  .568304
                  .554170
                  .540360
                  .526866
                  .513681
                  .500800
                  .488215
                  .475920

                  13
                  .572469
                  .557125
                  .542162
                  .527570
                  .513342
                  .499469
                  .485942
                  .472755
                  .459898
                  .447365

                  14
                  .548425
                  .532611
                  .517222
                  .502247
                  .487675
                  .473496
                  .459701
                  .446281
                  .433224
                  .420523

                  15
                  .525391
                  .509177
                  .493430
                  .478139
                  .463291
                  .448875
                  .434878
                  .421289
                  .408097
                  .395292

                  16
                  .503325
                  .486773
                  .470732
                  .455188
                  .440127
                  .425533
                  .411394
                  .397697
                  .384427
                  .371574

                  17
                  .482185
                  .465355
                  .449079
                  .433339
                  .418120
                  .403405
                  .389179
                  .375426
                  .362131
                  .349280

                  18
                  .461933
                  .444879
                  .428421
                  .412539
                  .397214
                  .382428
                  .368163
                  .354402
                  .341127
                  .328323

                  19
                  .442532
                  .425304
                  .408714
                  .392737
                  .377354
                  .362542
                  .348282
                  .334555
                  .321342
                  .308624

                  20
                  .423946
                  .406591
                  .389913
                  .373886
                  .358486
                  .343690
                  .329475
                  .315820
                  .302704
                  .290106

                Table D—Showing the Present Worth of a Remainder Interest Postponed for a Term Certain in a Charitable Remainder Unitrust
                [Applicable after April 30, 1989]

                  Years
                  Adjusted payout rate
                  6.2%
                  6.4%
                  6.6%
                  6.8%
                  7.0%
                  7.2%
                  7.4%
                  7.6%
                  7.8%
                  8.0%

                  1
                  .938000
                  .936000
                  .934000
                  .932000
                  .930000
                  .928000
                  .926000
                  .924000
                  .922000
                  .920000

                  2
                  .879844
                  .876096
                  .872356
                  .868624
                  .864900
                  .861184
                  .857476
                  .853776
                  .850084
                  .846400

                  3
                  .825294
                  .820026
                  .814781
                  .809558
                  .804357
                  .799179
                  .794023
                  .788889
                  .783777
                  .778688

                  4
                  .774125
                  .767544
                  .761005
                  .754508
                  .748052
                  .741638
                  .735265
                  .728933
                  .722643
                  .716393

                  5
                  .726130
                  .718421
                  .710779
                  .703201
                  .695688
                  .688240
                  .680855
                  .673535
                  .666277
                  .659082

                  6
                  .681110
                  .672442
                  .663867
                  .655383
                  .646990
                  .638687
                  .630472
                  .622346
                  .614307
                  .606355

                  7
                  .638881
                  .629406
                  .620052
                  .610817
                  .601701
                  .592701
                  .583817
                  .575048
                  .566391
                  .557847

                  8
                  .599270
                  .589124
                  .579129
                  .569282
                  .559582
                  .550027
                  .540615
                  .531344
                  .522213
                  .513219

                  9
                  .562115
                  .551420
                  .540906
                  .530571
                  .520411
                  .510425
                  .500609
                  .490962
                  .481480
                  .472161

                  10
                  .527264
                  .516129
                  .505206
                  .494492
                  .483982
                  .473674
                  .463564
                  .453649
                  .443925
                  .434388

                  11
                  .494574
                  .483097
                  .471863
                  .460866
                  .450104
                  .439570
                  .429260
                  .419171
                  .409298
                  .399637

                  12
                  .463910
                  .452179
                  .440720
                  .429527
                  .418596
                  .407921
                  .397495
                  .387314
                  .377373
                  .367666

                  13
                  .435148
                  .423239
                  .411632
                  .400320
                  .389295
                  .378550
                  .368081
                  .357879
                  .347938
                  .338253

                  14
                  .408169
                  .396152
                  .384465
                  .373098
                  .362044
                  .351295
                  .340843
                  .330680
                  .320799
                  .311193

                  15
                  .382862
                  .370798
                  .359090
                  .347727
                  .336701
                  .326002
                  .315620
                  .305548
                  .295777
                  .286297

                  16
                  .359125
                  .347067
                  .335390
                  .324082
                  .313132
                  .302529
                  .292264
                  .282326
                  .272706
                  .263394

                  17
                  .336859
                  .324855
                  .313254
                  .302044
                  .291213
                  .280747
                  .270637
                  .260870
                  .251435
                  .242322

                  18
                  .315974
                  .304064
                  .292579
                  .281505
                  .270828
                  .260533
                  .250610
                  .241044
                  .231823
                  .222936

                  19
                  .296383
                  .284604
                  .273269
                  .262363
                  .251870
                  .241775
                  .232065
                  .222724
                  .213741
                  .205101

                  20
                  .278008
                  .266389
                  .255233
                  .244522
                  .234239
                  .224367
                  .214892
                  .205797
                  .197069
                  .188693

                Table D—Showing the Present Worth of a Remainder Interest Postponed for a Term Certain in a Charitable Remainder Unitrust
                [Applicable after April 30, 1989]

                  Years
                  Adjusted payout rate
                  8.2%
                  8.4%
                  8.6%
                  8.8%
                  9.0%
                  9.2%
                  9.4%
                  9.6%
                  9.8%
                  10.0%

                  1
                  .918000
                  .916000
                  .914000
                  .912000
                  .910000
                  .908000
                  .906000
                  .904000
                  .902000
                  .900000

                  2
                  .842724
                  .839056
                  .835396
                  .831744
                  .828100
                  .824464
                  .820836
                  .817216
                  .813604
                  .810000

                  3
                  .773621
                  .768575
                  .763552
                  .758551
                  .753571
                  .748613
                  .743677
                  .738763
                  .733871
                  .729000

                  4
                  .710184
                  .704015
                  .697886
                  .691798
                  .685750
                  .679741
                  .673772
                  .667842
                  .661951
                  .656100

                  5
                  .651949
                  .644878
                  .637868
                  .630920
                  .624032
                  .617205
                  .610437
                  .603729
                  .597080
                  .590490

                  6
                  .598489
                  .590708
                  .583012
                  .575399
                  .567869
                  .560422
                  .553056
                  .545771
                  .538566
                  .531441

                  7
                  .549413
                  .541089
                  .532873
                  .524764
                  .516761
                  .508863
                  .501069
                  .493377
                  .485787
                  .478297

                  8
                  .504361
                  .495637
                  .487046
                  .478585
                  .470253
                  .462048
                  .453968
                  .446013
                  .438180
                  .430467

                  9
                  .463003
                  .454004
                  .445160
                  .436469
                  .427930
                  .419539
                  .411295
                  .403196
                  .395238
                  .387420

                  10
                  .425037
                  .415867
                  .406876
                  .398060
                  .389416
                  .380942
                  .372634
                  .364489
                  .356505
                  .348678

                  11
                  .390184
                  .380934
                  .371885
                  .363031
                  .354369
                  .345895
                  .337606
                  .329498
                  .321567
                  .313811

                  12
                  .358189
                  .348936
                  .339902
                  .331084
                  .322475
                  .314073
                  .305871
                  .297866
                  .290054
                  .282430

                  13
                  .328817
                  .319625
                  .310671
                  .301949
                  .293453
                  .285178
                  .277119
                  .269271
                  .261628
                  .254187

                  14
                  .301854
                  .292777
                  .283953
                  .275377
                  .267042
                  .258942
                  .251070
                  .243421
                  .235989
                  .228768

                  15
                  .277102
                  .268184
                  .259533
                  .251144
                  .243008
                  .235119
                  .227469
                  .220053
                  .212862
                  .205891

                  16
                  .254380
                  .245656
                  .237213
                  .229043
                  .221137
                  .213488
                  .206087
                  .198928
                  .192001
                  .185302

                  17
                  .233521
                  .225021
                  .216813
                  .208887
                  .201235
                  .193847
                  .186715
                  .179830
                  .173185
                  .166772

                  18
                  .214372
                  .206119
                  .198167
                  .190505
                  .183124
                  .176013
                  .169164
                  .162567
                  .156213
                  .150095

                  19
                  .196794
                  .188805
                  .181125
                  .173741
                  .166643
                  .159820
                  .153262
                  .146960
                  .140904
                  .135085

                  20
                  .180657
                  .172946
                  .165548
                  .158452
                  .151645
                  .145117
                  .138856
                  .132852
                  .127096
                  .121577

                Table D—Showing the Present Worth of a Remainder Interest Postponed for a Term Certain in a Charitable Remainder Unitrust
                [Applicable after April 30, 1989]

                  Years
                  Adjusted payout rate
                  10.2%
                  10.4%
                  10.6%
                  10.8%
                  11.0%
                  11.2%
                  11.4%
                  11.6%
                  11.8%
                  12.0%

                  1
                  .898000
                  .896000
                  .894000
                  .892000
                  .890000
                  .888000
                  .886000
                  .884000
                  .882000
                  .880000

                  2
                  .806404
                  .802816
                  .799236
                  .795664
                  .792100
                  .788544
                  .784996
                  .781456
                  .777924
                  .774400

                  3
                  .724151
                  .719323
                  .714517
                  .709732
                  .704969
                  .700227
                  .695506
                  .690807
                  .686129
                  .681472

                  4
                  .650287
                  .644514
                  .638778
                  .633081
                  .627422
                  .621802
                  .616219
                  .610673
                  .605166
                  .599695

                  5
                  .583958
                  .577484
                  .571068
                  .564708
                  .558406
                  .552160
                  .545970
                  .539835
                  .533756
                  .527732

                  6
                  .524394
                  .517426
                  .510535
                  .503720
                  .496981
                  .490318
                  .483729
                  .477214
                  .470773
                  .464404

                  7
                  .470906
                  .463613
                  .456418
                  .449318
                  .442313
                  .435402
                  .428584
                  .421858
                  .415222
                  .408676

                  8
                  .422874
                  .415398
                  .408038
                  .400792
                  .393659
                  .386637
                  .379726
                  .372922
                  .366226
                  .359635

                  9
                  .379741
                  .372196
                  .364786
                  .357506
                  .350356
                  .343334
                  .336437
                  .329663
                  .323011
                  .316478

                  10
                  .341007
                  .333488
                  .326118
                  .318896
                  .311817
                  .304881
                  .298083
                  .291422
                  .284896
                  .278501

                  11
                  .306224
                  .298805
                  .291550
                  .284455
                  .277517
                  .270734
                  .264102
                  .257617
                  .251278
                  .245081

                  12
                  .274989
                  .267729
                  .260645
                  .253734
                  .246990
                  .240412
                  .233994
                  .227734
                  .221627
                  .215671

                  13
                  .246941
                  .239886
                  .233017
                  .226331
                  .219821
                  .213486
                  .207319
                  .201317
                  .195475
                  .189791

                  14
                  .221753
                  .214937
                  .208317
                  .201887
                  .195641
                  .189575
                  .183684
                  .177964
                  .172409
                  .167016

                  15
                  .199134
                  .192584
                  .186236
                  .180083
                  .174121
                  .168343
                  .162744
                  .157320
                  .152065
                  .146974

                  16
                  .178822
                  .172555
                  .166495
                  .160634
                  .154967
                  .149488
                  .144191
                  .139071
                  .134121
                  .129337

                  17
                  .160582
                  .154609
                  .148846
                  .143286
                  .137921
                  .132746
                  .127754
                  .122939
                  .118295
                  .113817

                  18
                  .144203
                  .138530
                  .133069
                  .127811
                  .122750
                  .117878
                  .113190
                  .108678
                  .104336
                  .100159

                  19
                  .129494
                  .124123
                  .118963
                  .114007
                  .109247
                  .104676
                  .100286
                  .096071
                  .092024
                  .088140

                  20
                  .116286
                  .111214
                  .106353
                  .101694
                  .097230
                  .092952
                  .088853
                  .084927
                  .081166
                  .077563

                Table D—Showing the Present Worth of a Remainder Interest Postponed for a Term Certain in a Charitable Remainder Unitrust
                [Applicable after April 30, 1989]

                  Years
                  Adjusted payout rate
                  12.2%
                  12.4%
                  12.6%
                  12.8%
                  13.0%
                  13.2%
                  13.4%
                  13.6%
                  13.8%
                  14.0%

                  1
                  .878000
                  .876000
                  .874000
                  .872000
                  .870000
                  .868000
                  .866000
                  .864000
                  .862000
                  .860000

                  2
                  .770884
                  .767376
                  .763876
                  .760384
                  .756900
                  .753424
                  .749956
                  .746496
                  .743044
                  .739600

                  3
                  .676836
                  .672221
                  .667628
                  .663055
                  .658503
                  .653972
                  .649462
                  .644973
                  .640504
                  .636056

                  4
                  .594262
                  .588866
                  .583507
                  .578184
                  .572898
                  .567648
                  .562434
                  .557256
                  .552114
                  .547008

                  5
                  .521762
                  .515847
                  .509985
                  .504176
                  .498421
                  .492718
                  .487068
                  .481469
                  .475923
                  .470427

                  6
                  .458107
                  .451882
                  .445727
                  .439642
                  .433626
                  .427679
                  .421801
                  .415990
                  .410245
                  .404567

                  7
                  .402218
                  .395848
                  .389565
                  .383368
                  .377255
                  .371226
                  .365279
                  .359415
                  .353631
                  .347928

                  8
                  .353147
                  .346763
                  .340480
                  .334297
                  .328212
                  .322224
                  .316332
                  .310535
                  .304830
                  .299218

                  9
                  .310063
                  .303764
                  .297579
                  .291507
                  .285544
                  .279690
                  .273944
                  .268302
                  .262764
                  .257327

                  10
                  .272236
                  .266098
                  .260084
                  .254194
                  .248423
                  .242771
                  .237235
                  .231813
                  .226502
                  .221302

                  11
                  .239023
                  .233102
                  .227314
                  .221657
                  .216128
                  .210725
                  .205446
                  .200286
                  .195245
                  .190319

                  12
                  .209862
                  .204197
                  .198672
                  .193285
                  .188032
                  .182910
                  .177916
                  .173047
                  .168301
                  .163675

                  13
                  .184259
                  .178877
                  .173640
                  .168544
                  .163588
                  .158766
                  .154075
                  .149513
                  .145076
                  .140760

                  14
                  .161779
                  .156696
                  .151761
                  .146971
                  .142321
                  .137809
                  .133429
                  .129179
                  .125055
                  .121054

                  15
                  .142042
                  .137266
                  .132639
                  .128158
                  .123819
                  .119618
                  .115550
                  .111611
                  .107798
                  .104106

                  16
                  .124713
                  .120245
                  .115927
                  .111754
                  .107723
                  .103828
                  .100066
                  .096432
                  .092922
                  .089531

                  17
                  .109498
                  .105334
                  .101320
                  .097450
                  .093719
                  .090123
                  .086657
                  .083317
                  .080098
                  .076997

                  18
                  .096139
                  .092273
                  .088554
                  .084976
                  .081535
                  .078227
                  .075045
                  .071986
                  .069045
                  .066217

                  19
                  .084410
                  .080831
                  .077396
                  .074099
                  .070936
                  .067901
                  .064989
                  .062196
                  .059517
                  .056947

                  20
                  .074112
                  .070808
                  .067644
                  .064614
                  .061714
                  .058938
                  .056280
                  .053737
                  .051303
                  .048974

                Table F(4.2)—With Interest at 4.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .989820
                  .984755
                  .981389

                   1
                   2
                   .996577
                  .986432
                  .981385
                  .978030

                   2
                   3
                   .993166
                  .983056
                  .978026

                   3
                   4
                   .989767
                  .979691
                  .974679

                   4
                   5
                   .986380
                  .976338

                   5
                   6
                   .983004
                  .972996

                   6
                   7
                   .979639
                  .969666

                   7
                   8
                   .976286

                   8
                   9
                   .972945

                   9
                  10
                   .969615

                  10
                  11
                   .966296

                  11
                  12
                   .962989

                  12

                   .959693

                Table F(4.4)—With Interest at 4.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .989350
                  .984054
                  .980533

                   1
                   2
                   .996418
                  .985806
                  .980529
                  .977021

                   2
                   3
                   .992849
                  .982275
                  .977017

                   3
                   4
                   .989293
                  .978757
                  .973517

                   4
                   5
                   .985749
                  .975251

                   5
                   6
                   .982219
                  .971758

                   6
                   7
                   .978700
                  .968277

                   7
                   8
                   .975195

                   8
                   9
                   .971702

                   9
                  10
                   .968221

                  10
                  11
                   .964753

                  11
                  12
                   .961298

                  12

                   .957854

                Table F(4.6)—With Interest at 4.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .988882
                  .983354
                  .979680

                   1
                   2
                   .996259
                  .985183
                  .979676
                  .976015

                   2
                   3
                   .992532
                  .981498
                  .976011

                   3
                   4
                   .988820
                  .977826
                  .972360

                   4
                   5
                   .985121
                  .974168

                   5
                   6
                   .981436
                  .970524

                   6
                   7
                   .977764
                  .966894

                   7
                   8
                   .974107

                   8
                   9
                   .970463

                   9
                  10
                   .966832

                  10
                  11
                   .963216

                  11
                  12
                   .959613

                  12

                   .956023

                Table F(4.8)—With Interest at 4.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .988415
                  .982657
                  .978830

                   1
                   2
                  .996101
                  .984561
                  .978825
                  .975013

                   2
                   3
                  .992217
                  .980722
                  .975008

                   3
                   4
                  .988348
                  .976898
                  .971206

                   4
                   5
                  .984494
                  .973089

                   5
                   6
                  .980655
                  .969294

                   6
                   7
                  .976831
                  .965515

                   7
                   8
                  .973022

                   8
                   9
                  .969228

                   9
                  10
                  .965448

                  10
                  11
                  .961684

                  11
                  12
                  .957934

                  12

                  .954198

                Table F(5.0)—With Interest at 5.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .987950
                  .981961
                  .977982

                   1
                   2
                   .995942
                  .983941
                  .977977
                  .974014

                   2
                   3
                   .991901
                  .979949
                  .974009

                   3
                   4
                   .987877
                  .975973
                  .970057

                   4
                   5
                   .983868
                  .972013

                   5
                   6
                   .979876
                  .968069

                   6
                   7
                   .975900
                  .964141

                   7
                   8
                   .971940

                   8
                   9
                   .967997

                   9
                  10
                   .964069

                  10
                  11
                   .960157

                  11
                  12
                   .956261

                  12

                   .952381

                Table F(5.2)—With Interest at 5.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .987486
                  .981268
                  .977137

                   1
                   2
                   .995784
                  .983323
                  .977132
                  .973018

                   2
                   3
                   .991587
                  .979178
                  .973012

                   3
                   4
                   .987407
                  .975050
                  .968911

                   4
                   5
                   .983244
                  .970940

                   5
                   6
                   .979099
                  .966847

                   6
                   7
                   .974972
                  .962771

                   7
                   8
                   .970862

                   8
                   9
                   .966769

                   9
                  10
                   .962694

                  10
                  11
                   .958636

                  11
                  12
                   .954594

                  12

                   .950570

                Table F(5.4)—With Interest at 5.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .987023
                  .980577
                  .976295

                   1
                   2
                   .995627
                  .982707
                  .976289
                  .972026

                   2
                   3
                   .991273
                  .978409
                  .972019

                   3
                   4
                   .986938
                  .974131
                  .967769

                   4
                   5
                   .982622
                  .969871

                   5
                   6
                   .978325
                  .965629

                   6
                   7
                   .974047
                  .961407

                   7
                   8
                   .969787

                   8
                   9
                   .965546

                   9
                  10
                   .961323

                  10
                  11
                   .957119

                  11
                  12
                   .952934

                  12

                   .948767

                Table F(5.6)—With Interest at 5.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .986562
                  .979888
                  .975455

                   1
                   2
                   .995470
                  .982092
                  .975449
                  .971036

                   2
                   3
                   .990960
                  .977643
                  .971029

                   3
                   4
                   .986470
                  .973214
                  .966630

                   4
                   5
                   .982001
                  .968805

                   5
                   6
                   .977552
                  .964416

                   6
                   7
                   .973124
                  .960047

                   7
                   8
                   .968715

                   8
                   9
                   .964326

                   9
                  10
                   .959958

                  10
                  11
                   .955609

                  11
                  12
                   .951279

                  12

                   .946970

                Table F(5.8)—With Interest at 5.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .986102
                  .979201
                  .974618

                   1
                   2
                   .995313
                  .981480
                  .974611
                  .970050

                   2
                   3
                   .990647
                  .976879
                  .970043

                   3
                   4
                   .986004
                  .972300
                  .965496

                   4
                   5
                   .981382
                  .967743

                   5
                   6
                   .976782
                  .963206

                   6
                   7
                   .972203
                  .958692

                   7
                   8
                   .967646

                   8
                   9
                   .963111

                   9
                  10
                   .958596

                  10
                  11
                   .954103

                  11
                  12
                   .949631

                  12

                   .945180

                Table F(6.0)—With Interest at 6.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .985643
                  .978516
                  .973784

                   1
                   2
                   .995156
                  .980869
                  .973776
                  .969067

                   2
                   3
                   .990336
                  .976117
                  .969059

                   3
                   4
                   .985538
                  .971389
                  .964365

                   4
                   5
                   .980764
                  .966684

                   5
                   6
                   .976014
                  .962001

                   6
                   7
                   .971286
                  .957341

                   7
                   8
                   .966581

                   8
                   9
                   .961899

                   9
                  10
                   .957239

                  10
                  11
                   .952603

                  11
                  12
                   .947988

                  12

                   .943396

                Table F(6.2)—With Interest at 6.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .985185
                  .977833
                  .972952

                   1
                   2
                   .995000
                  .980259
                  .972944
                  .968087

                   2
                   3
                   .990024
                  .975358
                  .968079

                   3
                   4
                   .985074
                  .970481
                  .963238

                   4
                   5
                   .980148
                  .965628

                   5
                   6
                   .975247
                  .960799

                   6
                   7
                   .970371
                  .955995

                   7
                   8
                   .965519

                   8
                   9
                   .960691

                   9
                  10
                   .955887

                  10
                  11
                   .951107

                  11
                  12
                   .946352

                  12

                   .941620

                Table F(6.4)—With Interest at 6.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .984729
                  .977152
                  .972122

                   1
                   2
                   .994844
                  .979652
                  .972114
                  .967110

                   2
                   3
                   .989714
                  .974600
                  .967101

                   3
                   4
                   .984611
                  .969575
                  .962115

                   4
                   5
                   .979534
                  .964576

                   5
                   6
                   .974483
                  .959602

                   6
                   7
                   .969458
                  .954654

                   7
                   8
                   .964460

                   8
                   9
                   .959487

                   9
                  10
                   .954539

                  10
                  11
                   .949617

                  11
                  12
                   .944721

                  12

                   .939850

                Table F(6.6)—With Interest at 6.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .984274
                  .976473
                  .971295

                   1
                   2
                   .994688
                  .979046
                  .971286
                  .966136

                   2
                   3
                   .989404
                  .973845
                  .966127

                   3
                   4
                   .984149
                  .968672
                  .960995

                   4
                   5
                   .978921
                  .963527

                   5
                   6
                   .973721
                  .958408

                   6
                   7
                   .968549
                  .953317

                   7
                   8
                   .963404

                   8
                   9
                   .958286

                   9
                  10
                   .953196

                  10
                  11
                   .948132

                  11
                  12
                   .943096

                  12

                   .938086

                Table F(6.8)—With Interest at 6.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .983821
                  .975796
                  .970471

                   1
                   2
                   .994533
                  .978442
                  .970461
                  .965165

                   2
                   3
                   .989095
                  .973092
                  .965156

                   3
                   4
                   .983688
                  .967772
                  .959879

                   4
                   5
                   .978309
                  .962481

                   5
                   6
                   .972961
                  .957219

                   6
                   7
                   .967641
                  .951985

                   7
                   8
                   .962351

                   8
                   9
                   .957089

                   9
                  10
                   .951857

                  10
                  11
                   .946653

                  11
                  12
                   .941477

                  12

                   .936330

                Table F(7.0)—With Interest at 7.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .983368
                  .975122
                  .969649

                   1
                   2
                   .994378
                  .977839
                  .969639
                  .964198

                   2
                   3
                   .988787
                  .972342
                  .964187

                   3
                   4
                   .983228
                  .966875
                  .958766

                   4
                   5
                   .977700
                  .961439

                   5
                   6
                   .972203
                  .956033

                   6
                   7
                   .966736
                  .950658

                   7
                   8
                   .961301

                   8
                   9
                   .955896

                   9
                  10
                   .950522

                  10
                  11
                   .945178

                  11
                  12
                   .939864

                  12

                   .934579

                Table F(7.2)—With Interest at 7.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .982917
                  .974449
                  .968830

                   1
                   2
                   .994223
                  .977239
                  .968819
                  .963233

                   2
                   3
                   .988479
                  .971593
                  .963222

                   3
                   4
                   .982769
                  .965980
                  .957658

                   4
                   5
                   .977091
                  .960400

                   5
                   6
                   .971446
                  .954851

                   6
                   7
                   .965834
                  .949335

                   7
                   8
                   .960255

                   8
                   9
                   .954707

                   9
                   10
                   .949192

                  10
                   11
                   .943708

                  11
                   12
                   .938256

                  12

                   .932836

                Table F(7.4)—With Interest at 7.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .982467
                  .973778
                  .968013

                   1
                   2
                   .994068
                  .976640
                  .968002
                  .962271

                   2
                   3
                   .988172
                  .970847
                  .962260

                   3
                   4
                   .982311
                  .965088
                  .956552

                   4
                   5
                   .976484
                  .959364

                   5
                   6
                   .970692
                  .953673

                   6
                   7
                   .964935
                  .948017

                   7
                   8
                   .959211

                   8
                   9
                   .953521

                   9
                  10
                   .947866

                  10
                  11
                   .942243

                  11
                  12
                   .936654

                  12

                   .931099

                Table F(7.6)—With Interest at 7.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .982019
                  .973109
                  .967199

                   1
                   2
                   .993914
                  .976042
                  .967187
                  .961313

                   2
                   3
                   .987866
                  .970103
                  .961301

                   3
                   4
                   .981854
                  .964199
                  .955451

                   4
                   5
                   .975879
                  .958331

                   5
                   6
                   .969940
                  .952499

                   6
                   7
                   .964037
                  .946703

                   7
                   8
                   .958171

                   8
                   9
                   .952340

                   9
                  10
                   .946544

                  10
                  11
                   .940784

                  11
                  12
                   .935058

                  12

                   .929368

                Table F(7.8)—With Interest at 7.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.0000000
                  .981571
                  .972442
                  .966387

                   1
                   2
                   .993761
                  .975447
                  .966374
                  .960357

                   2
                   3
                   .987560
                  .969361
                  .960345

                   3
                   4
                   .981398
                  .963312
                  .954353

                   4
                   5
                   .975275
                  .957302

                   5
                   6
                   .969190
                  .951329

                   6
                   7
                   .963143
                  .945393

                   7
                   8
                   .957133

                   8
                   9
                   .951161

                   9
                  10
                   .945227

                  10
                  11
                   .939329

                  11
                  12
                   .933468

                  12

                   .927644

                Table F(8.0)—With Interest at 8.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .981125
                  .971777
                  .965578

                   1
                   2
                   .993607
                  .974853
                  .965564
                  .959405

                   2
                   3
                   .987255
                  .968621
                  .959392

                   3
                   4
                   980944
                  .962429
                  .953258

                   4
                   5
                   .974673
                  .956276

                   5
                   6
                   .968442
                  .950162

                   6
                   7
                   .962250
                  .944088

                   7
                   8
                   .956099

                   8
                   9
                   .949987

                   9
                  10
                   .943913

                  10
                  11
                   .937879

                  11
                  12
                   .931883

                  12

                   .925926

                Table F(8.2)—With Interest at 8.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .980680
                  .971114
                  .964771

                   1
                   2
                   .993454
                  .974261
                  .964757
                  .958455

                   2
                   3
                   .986951
                  .967883
                  .958441

                   3
                   4
                   .980490
                  .961547
                  .952167

                   4
                   5
                   .974072
                  .955253

                   5
                   6
                   .967695
                  .949000

                   6
                   7
                   .961361
                  .942788

                   7
                   8
                   .955068

                   8
                   9
                   .948816

                   9
                  10
                   .942605

                  10
                  11
                   .936434

                  11
                  12
                   .930304

                  12

                   .924214

                Table F(8.2)—With Interest at 8.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .980237
                  .970453
                  .963966

                   1
                   2
                   .993301
                  .973670
                  .963952
                  .957509

                   2
                   3
                   .986647
                  .967148
                  .957494

                   3
                   4
                   .980037
                  .960669
                  .951080

                   4
                   5
                   .973472
                  .954233

                   5
                   6
                   .966951
                  .947841

                   6
                   7
                   .960473
                  .941491

                   7
                   8
                   .954039

                   8
                   9
                   .947648

                   9
                  10
                   .941300

                  10
                  11
                   .934994

                  11
                  12
                   .928731

                  12

                   .922509

                Table F(8.6)—With Interest at 8.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .979794
                  .969794
                  .963164

                   1
                   2
                   .993148
                  .973081
                  .963149
                  .956565

                   2
                   3
                   .986344
                  .966414
                  .956550

                   3
                   4
                   .979586
                  .959793
                  .949996

                   4
                   5
                   .972874
                  .953217

                   5
                   6
                   .966209
                  .946686

                   6
                   7
                   .959589
                  .940199

                   7
                   8
                   .953014

                   8
                   9
                   .946484

                   9
                  10
                   .940000

                  10
                  11
                   .933559

                  11
                  12
                   .927163

                  12

                   .920810

                Table F(8.8)—With Interest at 8.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .979353
                  .969136
                  .962364

                   1
                   2
                   .992996
                  .972494
                  .962349
                  .955624

                   2
                   3
                   .986041
                  .965683
                  .955609

                   3
                   4
                  .979135
                  .958919
                  .948916

                   4
                   5
                  .972278
                  .952203

                   5
                   6
                  .965468
                  .945534

                   6
                   7
                  .958706
                  .938912

                   7
                   8
                  .951992

                   8
                   9
                  .945324

                   9
                  10
                  .938703

                  10
                  11
                  .932129

                  11
                  12
                  .925600

                  12

                  .919118

                Table F(9.0)—With Interest at 9.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .978913
                  .968481
                  .961567

                   1
                   2
                   .992844
                  .971908
                  .961551
                  .954686

                   2
                   3
                   .985740
                  .964954
                  .954670

                   3
                   4
                   .978686
                  .958049
                  .947839

                   4
                   5
                   .971683
                  .951193

                   5
                   6
                   .964730
                  .944387

                   6
                   7
                   .957826
                  .937629

                   7
                   8
                   .950972

                   8
                   9
                   .944167

                   9
                  10
                   .937411

                  10
                  11
                   .930703

                  11
                  12
                   .924043

                  12

                   .917431

                Table F(9.2)—With Interest at 9.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .978474
                  .967827
                  .960772

                   1
                   2
                  .992693
                  .971324
                  .960755
                  .953752

                   2
                   3
                  .985439
                  .964226
                  .953734

                   3
                   4
                  .978238
                  .957180
                  .946765

                   4
                   5
                  .971089
                  .950186

                   5
                   6
                  .963993
                  .943242

                   6
                   7
                  .956949
                  .936350

                   7
                   8
                  .949956

                   8
                   9
                  .943014

                   9
                  10
                  .936123

                  10
                  11
                  .929283

                  11
                  12
                  .922492

                  12

                  .915751

                Table F(9.4)—With Interest at 9.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .978037
                  .967176
                  .959980

                   1
                   2
                   .992541
                  .970742
                  .959962
                  .952820

                   2
                   3
                   .985138
                  .963501
                  .952802

                   3
                   4
                   .977790
                  .956315
                  .945695

                   4
                   5
                   .970497
                  .949182

                   5
                   6
                   .963258
                  .942102

                   6
                   7
                   .956074
                  .935075

                   7
                   8
                   .948942

                   8
                   9
                   .941865

                   9
                  10
                   .934839

                  10
                  11
                   .927867

                  11
                  12
                   .920946

                  12

                   .914077

                Table F(9.6)—With Interest at 9.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .977600
                  .966526
                  .959190

                   1
                   2
                   .992390
                  .970161
                  .959171
                  .951890

                   2
                   3
                   .984838
                  .962778
                  .951872

                   3
                   4
                   .977344
                  .955452
                  .944628

                   4
                   5
                   .969906
                  .948181

                   5
                   6
                   .962526
                  .940965

                   6
                   7
                   .955201
                  .933805

                   7
                   8
                   .947932

                   8
                   9
                   .940718

                   9
                  10
                   .933560

                  10
                  11
                   .926455

                  11
                  12
                   .919405

                  12

                   .912409

                Table F(9.8)—With Interest at 9.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .977165
                  .965878
                  .958402

                   1
                   2
                   .992239
                  .969582
                  .958382
                  .950964

                   2
                   3
                   .984539
                  .962057
                  .950945

                   3
                   4
                   .976898
                  .954591
                  .943565

                   4
                   5
                   .969317
                  .947183

                   5
                   6
                   .961795
                  .939832

                   6
                   7
                   .954331
                  .932539

                   7
                   8
                   .946924

                   8
                   9
                   .939576

                   9
                  10
                   .932284

                  10
                  11
                   .925049

                  11
                  12
                   .917870

                  12

                   .910747

                Table F(10.0)—With Interest at 10.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .976731
                  .965232
                  .957616

                   1
                   2
                   .992089
                  .969004
                  .957596
                  .950041

                   2
                   3
                   .984240
                  .961338
                  .950021

                   3
                   4
                   .976454
                  .953733
                  .942505

                   4
                   5
                   .968729
                  .946188

                   5
                   6
                   .961066
                  .938703

                   6
                   7
                   .953463
                  .931277

                   7
                   8
                   .945920

                   8
                   9
                   .938436

                   9
                  10
                   .931012

                  10
                  11
                   .923647

                  11
                  12
                   .916340

                  12

                  .909091

                Table F(10.2)—With Interest at 10.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .976298
                  .964588
                  .956833

                   1
                   2
                   .991939
                  .968428
                  .956812
                  .949120

                   2
                   3
                   .983943
                  .960622
                  .949099

                   3
                   4
                   .976011
                  .952878
                  .941448

                   4
                   5
                   .968143
                  .945196

                   5
                   6
                   .960338
                  .937577

                   6
                   7
                   .952597
                  .930019

                   7
                   8
                   .944918

                   8
                   9
                   .937301

                   9
                  10
                   .929745

                  10
                  11
                   .922250

                  11
                  12
                   .914816

                  12

                   .907441

                Table F(10.4)—With Interest at 10.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .975867
                  .963946
                  .956052

                   1
                   2
                   .991789
                  .967854
                  .956031
                  .948202

                   2
                   3
                   .983645
                  .959907
                  .948181

                   3
                   4
                   .975568
                  .952025
                  .940395

                   4
                   5
                   .967558
                  .944208

                   5
                   6
                   .959613
                  .936455

                   6
                   7
                   .951734
                  .928765

                   7
                   8
                   .943919

                   8
                   9
                   .936168

                   9
                  10
                   .928481

                  10
                  11
                   .920858

                  11
                  12
                   .913296

                  12

                   .905797

                Table F(10.6)—With Interest at 10.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .975436
                  .963305
                  .955274

                   1
                   2
                   .991639
                  .967281
                  .955252
                  .947287

                   2
                   3
                   .983349
                  .959194
                  .947265

                   3
                   4
                   .975127
                  .951174
                  .939345

                   4
                   5
                   .966974
                  .943222

                   5
                   6
                   .958890
                  .935336

                   6
                   7
                   .950873
                  .927516

                   7
                   8
                   .942923

                   8
                   9
                   .935039

                   9
                  10
                   .927222

                  10
                  11
                   .919470

                  11
                  12
                   .911782

                  12

                   .904159

                Table F(10.8)—With Interest at 10.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .975007
                  .962667
                  .954498

                   1
                   2
                   .991490
                  .966710
                  .954475
                  .946375

                   2
                   3
                   .983052
                  .958483
                  .946352

                   3
                   4
                   .974687
                  .950327
                  .938299

                   4
                   5
                   .966392
                  .942239

                   5
                   6
                   .958168
                  .934221

                   6
                   7
                   .950014
                  .926271

                   7
                   8
                   .941930

                   8
                   9
                   .933914

                   9
                  10
                   .925966

                  10
                  11
                   .918086

                  11
                  12
                   .910273

                  12

                   .902527

                Table F(11.0)—With Interest at 11.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .974579
                  .962030
                  .953724

                   1
                   2
                  .991341
                  .966140
                  .953700
                  .945466

                   2
                   3
                  .982757
                  .957774
                  .945442

                   3
                   4
                  .974247
                  .949481
                  .937255

                   4
                   5
                  .965811
                  .941260

                   5
                   6
                  .957449
                  .933109

                   6
                   7
                  .949158
                  .925029

                   7
                   8
                  .940939

                   8
                   9
                  .932792

                   9
                  10
                  .924715

                  10
                  11
                  .916708

                  11
                  12
                  .908770

                  12

                  .900901

                Table F(11.2)—With Interest at 11.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .974152
                  .961395
                  .952952

                   1
                   2
                  .991192
                  .965572
                  .952927
                  .944559

                   2
                   3
                  .982462
                  .957068
                  .944534

                   3
                   4
                  .973809
                  .948638
                  .936215

                   4
                   5
                  .965232
                  .940283

                   5
                   6
                  .956731
                  .932001

                   6
                   7
                  .948304
                  .923792

                   7
                   8
                  .939952

                   8
                   9
                  .931673

                   9
                  10
                  .923467

                  10
                  11
                  .915333

                  11
                  12
                  .907272

                  12

                  .899281

                Table F(11.4)—With Interest at 11.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .973726
                  .960762
                  .952183

                   1
                   2
                   .991044
                  .965005
                  .952157
                  .943655

                   2
                   3
                   .982168
                  .956363
                  .943630

                   3
                   4
                   .973372
                  .947798
                  .935178

                   4
                   5
                   .964654
                  .939309

                   5
                   6
                   .956015
                  .930896

                   6
                   7
                   .947452
                  .922559

                   7
                   8
                   .938967

                   8
                   9
                   .930557

                   9
                  10
                   .922223

                  10
                  11
                   .913964

                  11
                  12
                   .905778

                  12

                   .897666

                Table F(11.6)—With Interest at 11.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .973302
                  .960130
                  .951416

                   1
                   2
                   .990896
                  .964440
                  .951389
                  .942754

                   2
                   3
                   .981874
                  .955660
                  .942728

                   3
                   4
                   .972935
                  .946959
                  .934145

                   4
                   5
                   .964077
                  .938338

                   5
                   6
                   .955300
                  .929795

                   6
                   7
                   .946603
                  .921330

                   7
                   8
                   .937985

                   8
                   9
                   .929445

                   9
                  10
                   .920984

                  10
                  11
                   .912599

                  11
                  12
                   .904290

                  12

                   .896057

                Table F(11.8)—With Interest at 11.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .972878
                  .959501
                  .950651

                   1
                   2
                   .990748
                  .963877
                  .950624
                  .941855

                   2
                   3
                   .981582
                  .954959
                  .941828

                   3
                   4
                   .972500
                  .946124
                  .933114

                   4
                   5
                   .963502
                  .937370

                   5
                   6
                   .954588
                  .928698

                   6
                   7
                   .945756
                  .920105

                   7
                   8
                   .937006

                   8
                   9
                   .928337

                   9
                  10
                   .919748

                  10
                  11
                   .911238

                  11
                  12
                   .902807

                  12

                   .894454

                Table F(12.0)—With Interest at 12.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .972456
                  .958873
                  .949888

                   1
                   2
                   .990600
                  .963315
                  .949860
                  .940960

                   2
                   3
                   .981289
                  .954260
                  .940932

                   3
                   4
                   .972065
                  .945290
                  .932087

                   4
                   5
                   .962928
                  .936405

                   5
                   6
                   .953877
                  .927603

                   6
                   7
                   .944911
                  .918884

                   7
                   8
                   .936029

                   8
                   9
                   .927231

                   9
                  10
                   .918515

                  10
                  11
                   .909882

                  11
                  12
                   .901329

                  12

                   .892857

                Table F(12.2)—With Interest at 12.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .972034
                  .958247
                  .949128

                   1
                   2
                   .990453
                  .962754
                  .949099
                  .940067

                   2
                   3
                   .980997
                  .953563
                  .940038

                   3
                   4
                   .971632
                  .944460
                  .931063

                   4
                   5
                   .962356
                  .935443

                   5
                   6
                   .953168
                  .926512

                   6
                   7
                   .944069
                  .917667

                   7
                   8
                   .935056

                   8
                   9
                   .926129

                   9
                  10
                   .917287

                  10
                  11
                   .908530

                  11
                  12
                   .899856

                  12

                   .891266

                Table F(12.4)—With Interest at 12.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .971614
                  .957623
                  .948370

                   1
                   2
                   .990306
                  .962195
                  .948340
                  .939176

                   2
                   3
                   .980706
                  .952868
                  .939147

                   3
                   4
                   .971199
                  .943631
                  .930043

                   4
                   5
                   .961785
                  .934484

                   5
                   6
                   .952461
                  .925425

                   6
                   7
                   .943228
                  .916454

                   7
                   8
                   .934085

                   8
                   9
                   .925030

                   9
                  10
                   .916063

                  10
                  11
                   .907183

                  11
                  12
                   .898389

                  12

                   .889680

                Table F(12.6)—With Interest at 12.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  but less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .971195
                  .957000
                  .947614

                   1
                   2
                   .990159
                  .961638
                  .947583
                  .938289

                   2
                   3
                   .980416
                  .952175
                  .938258

                   3
                   4
                   .970768
                  .942805
                  .929025

                   4
                   5
                   .961215
                  .933527

                   5
                   6
                   .951756
                  .924341

                   6
                   7
                   .942390
                  .915245

                   7
                   8
                   .933117

                   8
                   9
                   .923934

                   9
                  10
                   .914842

                  10
                  11
                   .905840

                  11
                  12
                   .896926

                  12

                   .888099

                Table F(12.8)—With Interest at 12.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  but less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .970777
                  .956379
                  .946860

                   1
                   2
                   .990013
                  .961082
                  .946828
                  .937403

                   2
                   3
                   .980126
                  .951484
                  .937372

                   3
                   4
                   .970337
                  .941981
                  .928011

                   4
                   5
                   .960647
                  .932574

                   5
                   6
                   .951053
                  .923260

                   6
                   7
                   .941554
                  .914040

                   7
                   8
                   .932151

                   8
                   9
                   .922842

                   9
                  10
                   .913625

                  10
                  11
                   .904501

                  11
                  12
                   .895468

                  12

                   .886525

                Table F(13.0)—With Interest at 13.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .970360
                  .955760
                  .946108

                   1
                   2
                   .989867
                  .960528
                  .946075
                  .936521

                   2
                   3
                   .979836
                  .950795
                  .936489

                   3
                   4
                   .969908
                  .941160
                  .926999

                   4
                   5
                   .960079
                  .931623

                   5
                   6
                   .950351
                  .922183

                   6
                   7
                   .940721
                  .912838

                   7
                   8
                   .931188

                   8
                   9
                   .921753

                   9
                  10
                   .912412

                  10
                  11
                   .903167

                  11
                  12
                   .894015

                  12

                   .884956

                Table F(13.2)—With Interest at 13.2 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .969945
                  .955143
                  .945359

                   1
                   2
                   .989721
                  .959975
                  .945325
                  .935641

                   2
                   3
                   .979548
                  .950107
                  .935608

                   3
                   4
                   .969479
                  .940341
                  .925991

                   4
                   5
                   .959514
                  .930675

                   5
                   6
                   .949651
                  .921109

                   6
                   7
                   .939889
                  .911641

                   7
                   8
                   .930228

                   8
                   9
                   .920667

                   9
                  10
                   .911203

                  10
                  11
                   .901837

                  11
                  12
                   .892567

                  12

                   .883392

                Table F(13.4)—With Interest at 13.4 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .969530
                  .954527
                  .944611

                   1
                   2
                   .989575
                  .959423
                  .944577
                  .934764

                   2
                   3
                   .979260
                  .949422
                  .934730

                   3
                   4
                   .969051
                  .939524
                  .924986

                   4
                   5
                   .958949
                  .929730

                   5
                   6
                   .948953
                  .920038

                   6
                   7
                   .939060
                  .910447

                   7
                   8
                   .929271

                   8
                   9
                   .919584

                   9
                  10
                   .909998

                  10
                  11
                   .900511

                  11
                  12
                   .891124

                  12

                   .881834

                Table F(13.6)—With Interest at 13.6 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .969117
                  .953913
                  .943866

                   1
                   2
                   .989430
                  .958873
                  .943831
                  .933890

                   2
                   3
                   .978972
                  .948738
                  .933854

                   3
                   4
                   .968624
                  .938710
                  .923984

                   4
                   5
                   .958386
                  .928788

                   5
                   6
                   .948256
                  .918971

                   6
                   7
                   .938233
                  .909257

                   7
                   8
                   .928316

                   8
                   9
                   .918504

                   9
                  10
                   .908796

                  10
                  11
                   .899190

                  11
                  12
                   .889686

                  12

                   .880282

                Table F(13.8)—With Interest at 13.8 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first full taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .968704
                  .953301
                  .943123

                   1
                   2
                   .989285
                  .958325
                  .943087
                  .933018

                   2
                   3
                   .978685
                  .948056
                  .932982

                   3
                   4
                   .968199
                  .937898
                  .922985

                   4
                   5
                   .957824
                  .927849

                   5
                   6
                   .947561
                  .917907

                   6
                   7
                   .937408
                  .908072

                   7
                   8
                   .927364

                   8
                   9
                   .917428

                   9
                  10
                   .907598

                  10
                  11
                   .897873

                  11
                  12
                   .888252

                  12

                   .878735

                Table F(14.0)—With Interest at 14.0 Percent, Showing Factors for Computation of the Adjusted Payout Rate for Certain Valuations
                [Applicable after April 30, 1989]

                  1Number of months by which the valuation date for the first rull taxable year of the trust precedes the first payout

                  At least
                  But less than
                  2Factors for payout at the end of each period

                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                   1
                  1.000000
                  .968293
                  .952691
                  .942382

                   1
                   2
                   .989140
                  .957778
                  .942345
                  .932148

                   2
                   3
                   .978399
                  .947377
                  .932111

                   3
                   4
                   .967774
                  .937088
                  .921989

                   4
                   5
                   .957264
                  .926912

                   5
                   6
                   .946868
                  .916846

                   6
                   7
                   .936586
                  .906889

                   7
                   8
                   .926415

                   8
                   9
                   .916354

                   9
                  10
                   .906403

                  10
                  11
                   .896560

                  11
                  12
                   .886824

                  12

                   .877193

              (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 paragraph (e)(6) of this section. 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 is available, at no charge, electronically via the IRS Internet site at http://www.irs.gov.

                ER10AU11.024

                ER10AU11.025

                ER10AU11.026

                ER10AU11.027

                ER10AU11.028

                ER10AU11.029

                ER10AU11.030

                ER10AU11.031

                ER10AU11.032

                ER10AU11.033

                ER10AU11.034

                ER10AU11.035

                ER10AU11.036

                ER10AU11.037

                ER10AU11.038

              (f) Effective/applicability date. This section applies on and after May 1, 2009.
              [T.D. 8540, 59 FR 30117, June 10, 1994, as amended by T.D. 8819, 64 FR 23199, Apr. 30, 1999; T.D. 8886, 65 FR 36919, 36943, June 12, 2000; T.D. 9448, 74 FR 21465, May 7, 2009; T.D. 9540, 76 FR 49595, Aug. 10, 2011]

            treatment of excess distributions of trusts applicable to taxable years beginning before january 1, 1969

              § 1.665(a)-0
              Excess distributions by trusts; scope of subpart D.
              Subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Internal Revenue Code, in the case of trusts other than foreign trusts created by U.S. persons, is designed generally to prevent a shift of tax burden to a trust from a beneficiary or beneficiaries. In the case of a foreign trust created by a U.S. person, subpart D is designed to prevent certain other tax avoidance possibilities. To accomplish these ends, subpart D provides special rules for treatment of amounts paid, credited, or required to be distributed by a complex trust (subject to subpart C (section 661 and following) of such part I) in any year in excess of distributable net income for that year. Such an excess distribution is defined as an accumulation distribution, subject to the limitations in section 665 (b) or (c). An accumulation distribution, in the case of a trust other than a foreign trust created by a U.S. person, is “thrown back” to each of the 5 preceding years in inverse order. In the case of a foreign trust created by a U.S. person such an accumulation distribution is “thrown back,” in inverse order, to each of the preceding years to which the Internal Revenue Code of 1954 applies. That is, an accumulation distribution will be taxed to the beneficiaries of the trust in the year the distribution is made or required, but, in general, only to the extent of the distributable net income of those years which was not in fact distributed. However, with respect to a distribution by a trust other than a foreign trust created by a U.S. person, the resulting tax will not be greater than the aggregate of the taxes that would have been attributable to the amount thrown back to previous years had they been included in gross income of the beneficiaries in those years. In the case of a foreign trust created by a U.S. person, the resulting tax is computed under the provisions of section 669. To prevent double taxation, both in the case of a foreign trust created by a U.S. person, and a trust other than a foreign trust created by a U.S. person, the beneficiaries receive a credit for any taxes previously paid by the trust which are attributable to the excess thrown back and which are creditable under the provisions of chapter 1 of the Internal Revenue Code. Subpart D does not apply to any estate.
              [T.D. 6989, 34 FR 733, Jan. 17, 1969]

              § 1.665(a)-1
              Undistributed net income.
              (a) The term undistributed net income means for any taxable year the distributable net income of the trust for that year as determined under section 643(a), less:
              (1) The amount of income required to be distributed currently and any other amounts properly paid or credited or required to be distributed to beneficiaries in the taxable year as specified in paragraphs (1) and (2) of section 661(a), and
              (2) The amount of taxes imposed on the trust, as defined in § 1.665(d)-1.

              The application of the rule in this paragraph to the first year of a trust in which income is accumulated may be illustrated by the following example:

                Example.
                Assume that under the terms of the trust, $10,000 of income is required to be distributed currently to A and the trustee has discretion to make additional distributions to A. During the taxable year 1954 the trust had distributable net income of $30,100 derived from royalties and the trustee made distributions of $20,000 to A. The taxable income of the trust is $10,000 on which a tax of $2,640 is paid. The undistributed net income of the trust as of the close of the taxable year 1954 is $7,460 computed as follows:

                    Distributable net income
                    $30,100

                    Less:

                    Income currently distributable to A
                    $10,000

                    Other amounts distributed to A
                    10,000

                    Taxes imposed on the trust (see § 1.665(d)-1)
                    2,640

                    22,640

                    Undistributed net income
                    7,460

                See also paragraphs (e)(1) and (f)(1) of § 1.668(b)-2 for additional illustrations of the application of the rule in this paragraph to the first year of a trust in which income is accumulated.

              (b) The undistributed net income of a foreign trust created by a U.S. person for any taxable year is the distributable net income of such trust (see § 1.643(a)-6 and the examples set forth in paragraph (b) thereof), less:
              (1) The amount of income required to be distributed currently and any other amounts properly paid or credited or required to be distributed to beneficiaries in the taxable year as specified in paragraphs (1) and (2) of section 661(a), and

              (2) The amount of taxes imposed on such trust by chapter 1 of the Internal Revenue Code, which are attributable to items of income which are required to be included in such distributable net income. For purposes of subparagraph (2) of this paragraph, the amount of taxes imposed on the trust (for any taxable year), by chapter 1 of the Internal Revenue Code is the amount of taxes imposed pursuant to the provisions of section 871 which is properly allocable to the undistributed portion of the distributable net income. See § 1.665(d)-1. The amount of taxes imposed pursuant to the provisions of section 871 is the difference between the total tax imposed pursuant to the provisions of that section on the foreign trust created by a U.S. person for the year and the amount which would have been imposed on such trust had all the distributable net income, as determined under section 643(a), been distributed. The application of the rule in this paragraph may be illustrated by the following examples:

                Example 1.
                A trust was created in 1952 under the laws of Country X by the transfer to a trustee in Country X of money or property by a U.S. person. The entire trust constitutes a foreign trust created by a U.S. person. The governing instrument of the trust provides that $7,000 of income is required to be distributed currently to a U.S. beneficiary and gives the trustee discretion to make additional distributions to the beneficiary. During the taxable year 1963 the trust had income of $10,000 from dividends of a U.S. corporation (on which Federal income taxes of $3,000 were imposed pursuant to the provisions of section 871 and withheld under section 1441 resulting in the receipt by the trust of cash in the amount of $7,000), $20,000 in capital gains from the sale of stock of a Country Y corporation, and $30,000 from dividends of a Country X corporation, none of the gross income of which was derived from sources within the United States. The trustee did not file a U.S. income tax return for the taxable year 1963. The distributable net income of the trust before distributions to the beneficiary for 1963 is $60,000 ($57,000 of which is cash). During 1963 the trustee made distributions to the U.S. beneficiary equaling one-half of the trust's distributable net income or $30,000. Thus, the U.S. beneficiary is treated as having had distributed to him $5,000 (composed of $3,500 as a cash distribution and $1,500 as the tax imposed pursuant to the provisions of section 871 and withheld under section 1441), representing one-half of the income from U.S. sources; $10,000 in cash, representing one-half of the capital gains from the sale of stock of the Country Y corporation; and $15,000 in cash, representing one-half of the income from Country X sources for a total of $30,000. The undistributed net income of the trust at the close of taxable year 1963 is $28,500 computed as follows:

                    Distributable net income
                    $60,000

                    Less:

                    (1) Amounts distributed to the beneficiary—

                    Income currently distributed to the beneficiary
                    $7,000

                    Other amounts distributed to the beneficiary
                    21,500

                    Taxes under sec. 871 deemed distributed to the beneficiary
                    1,500

                    Total amounts distributed to the beneficiary
                    30,000

                    (2) Amount of taxes imposed on the trust under chapter 1 of the Code (See § 1.665(d)-1)
                    1,500

                    Total
                    31,500

                    Undistributed net income
                    28,500

                Example 2.
                The facts are the same as in example 1 except that property has been transferred to the trust by a person other than a U.S. person, and during 1963 the foreign trust created by a U.S. person was 60 percent of the entire foreign trust. The trustee paid no income taxes to Country X in 1963.
                (1) The undistributed net income of the foreign trust created by a U.S. person for 1963 is $17,100, computed as follows:

                    Distributable net income (60% of each item of gross income of entire trust):

                    60% of $10,000 U.S. dividends
                    $6,000

                    60% of $20,000 Country X capital gains
                    12,000

                    60% of $30,000 Country X dividends
                    18,000

                    Total
                    36,000

                    Less:

                    (i) Amounts distributed to the beneficiary—

                    Income currently distributed to the beneficiary (60% of $7,000)
                    $4,200

                    Other amounts distributed to the beneficiary (60% of $21,500)
                    12,900

                    Taxes under sec. 871 deemed distributed to the beneficiary (60% of $1,500)
                    900

                    Total amounts distributed to the beneficiary
                    18,000

                    (ii) Amount of taxes imposed on the trust under chapter 1 of the Code (See § 1.665(d)-1) (60% of $1,500)
                    $900

                    Total
                    $18,900

                    Undistributed net income
                    17,100

                (2) The undistributed net income of the portion of the entire trust which is not a foreign trust created by a U.S. person for 1963 is $11,400, computed as follows:

                    Distributed net income (40% of each item of gross income of entire trust)

                    40% of $10,000 U.S. dividends
                    $4,000

                    40% of $20,000 Country X capital gains
                    8,000

                    40% of Country X dividends
                    12,000

                    Total
                    24,000

                    Less:

                    (i) Amounts distributed to the beneficiary—

                    Income currently distributed to the beneficiary (40% of $7,000)
                    $2,800

                    Other amounts distributed to the beneficiary (40% of $21,500)
                    8,600

                    Taxes under sec. 871 deemed distributed to the beneficiary (40% of $1,500)
                    600

                    Total amounts distributed to the beneficiary
                    12,000

                    (ii) Amount of taxes imposed on the trust under chapter 1 of the Code (See § 1.665(d)-1) (40% of $1,500)
                    $600

                    Total
                    $12,600

                    Undistributed net income
                    11,400

              (c) However, the undistributed net income for any year to which an accumulation distribution for a later year may be thrown back may be reduced by accumulation distributions in intervening years and also by any taxes imposed on the trust which are deemed to be distributed under section 666 by reason of the accumulation distributions. On the other hand, undistributed net income for any year will not be reduced by any distributions in an intervening year which are excluded from the definition of an accumulation distribution under section 665(b), or which are excluded under section 663(a)(1), relating to gifts, bequests, etc. See paragraph (f)(5) of § 1.668(b)-2 for an illustration of the reduction of undistributed net income for any year by a subsequent accumulation distribution.
              [T.D. 6989, 34 FR 733, 741, Jan. 17, 1969]

              § 1.665(b)-1
              Accumulation distributions of trusts other than certain foreign trusts; in general.

              (a) Subject to the limitations set forth in § 1.665(b)-2, in the case of a trust other than a foreign trust created by a U.S. person, the term accumulation distribution for any taxable year means an amount (if in excess of $2,000), by which the amounts properly paid, credited, or required to be distributed within the meaning of section 661(a)(2) for that year exceed the distributable net income (determined under section 643(a)) of the trust, reduced (but not below zero) by the amount of income required to be distributed currently. (In computing the amount of an accumulation distribution pursuant to the preceding sentence, there is taken into account amounts applied or distributed for the support of a dependent under the circumstances specified in section 677(b) or section 678(c) out of corpus or out of other than income for the taxable year and amounts used to discharge or satisfy any person's legal obligation as that term is used in § 1.662(a)-4.) If the distribution as so computed is $2,000 or less, it is not an accumulation distribution within the meaning of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code. If the distribution exceeds $2,000, then the full amount is an accumulation distribution for the purposes of subpart D.

              (b) Although amounts properly paid, credited, or required to be distributed under section 661(a)(2) do not exceed the income of the trust during the taxable year, an accumulation distribution may result if such amounts exceed distributable net income reduced (but not below zero) by the amount required to be distributed currently. This may result from the fact that expenses allocable to corpus are taken into account in determining taxable income and hence distributable net income. However, in the case of a trust other than a foreign trust created by a U.S. person, the provisions of subpart D will not apply unless there is undistributed net income in at least one of the five preceding taxable years. See section 666 and the regulations thereunder.

              (c) The provisions of paragraphs (a) and (b) of this section may be illustrated by the following examples (it is assumed in each case that the exclusions provided in § 1.665(b)-2 do not apply):

                Example 1.
                A trustee properly makes a distribution to a beneficiary of $20,000 during the taxable year 1956, of which $10,000 is income required to be distributed currently to the beneficiary. The distributable net income of the trust is $15,000. There is an accumulation distribution of $5,000 computed as follows:

                    Total distribution
                    $20,000

                    Less: Income required to be distributed currently (section 661(a)(1))
                    10,000

                    Other amounts distributed (section 661(a)(2))
                    10,000

                    Distributable net income
                    $15,000

                    Less: Income required to be distributed currently
                    10,000

                    Balance of distributable net income
                    5,000

                    Accumulation distribution
                    5,000

                Example 2.
                Under the terms of the trust instrument, an annuity of $15,000 is required to be paid to A out of income each year and the trustee may in his discretion make distributions out of income or corpus to B. During the taxable year the trust had income of $18,000, as defined in section 643(b), and expenses allocable to corpus of $5,000. Distributable net income amounted to $13,000. The trustee distributed $15,000 of income to A and in the exercise of his discretion, paid $5,000 to B. There is an accumulation distribution of $5,000 computed as follows:

                    Total distribution
                    $20,000

                    Less: Income required to be distributed currently to A (section 661(a)(1))
                    15,000

                    Other amounts distributed (section 661(a)(2))
                    5,000

                    Distributable net income
                    $13,000

                    Less: Income required to be distributed currently to A
                    15,000

                    Balance of distributable net income
                    0

                    Accumulation distribution to B
                    5,000

                Example 3.
                Under the terms of a trust instrument, the trustee may either accumulate the trust income or make distributions to A and B. The trustee may also invade corpus for the benefit of A and B. During the taxable year, the trust had income as defined in section 643(b) of $22,000 and expenses of $5,000 allocable to corpus. Distributable net income amounts to $17,000. The trustee distributed $10,000 each to A and B during the taxable year. There is an accumulation distribution of $3,000 computed as follows:

                    Total distribution
                    $20,000

                    Less: income required to be distributed currently
                    0

                    Other amounts distributed (section 661(a)(2))
                    20,000

                    Distributable net income
                    17,000

                    Accumulation distribution
                    3,000

              (d) There are not taken into account, in computing the accumulation distribution for any taxable year, any amounts deemed distributed in that year because of an accumulation distribution in a later year.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6989, 34 FR 734, Jan. 17, 1969]

              § 1.665(b)-2
              Exclusions from accumulation distributions in the case of trusts (other than a foreign trust created by a U.S. person).
              (a) In the case of a trust other than a foreign trust created by a U.S. person, certain amounts paid, credited, or required to be distributed to a beneficiary are excluded under section 665(b) in determining whether there is an accumulation distribution for the purposes of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code. These exclusions are solely for the purpose of determining the amount allocable to preceding years under section 666 and in no way affect the determination under subpart C (section 661 and following) of such part I of the beneficiary's tax liability for the year of distribution. Further, amounts excluded from accumulation distributions do not reduce the amount of undistributed net income for the 5 years preceding the year of distribution.
              (b) The amounts excluded from the computation of an accumulation distribution are discussed in the following subparagraphs:
              (1) Distributions from accumulations while a beneficiary is under 21. (i) The first exception to the definition of an accumulation distribution is for amounts paid, credited, or required to be distributed to a beneficiary who was under 21 years of age or unborn when it was accumulated. A distribution is to be considered as so paid, credited, or required to be distributed to the extent, and only to the extent, that there is no undistributed net income for taxable years preceding the year of distribution other than undistributed net income accumulated while the beneficiary was under 21. If a distribution can be made from income accumulated either before or after a beneficiary reaches 21, it will be considered as made from the most recently accumulated income, and it will be so considered even though the governing instrument directs that distributions be charged first against the earliest accumulations.
              (ii) As was indicated in paragraph (a) of this section, a distribution of an amount excepted from the definition of an accumulation distribution will not reduce undistributed net income for the purpose of determining the effect of a future accumulation distribution. Thus, a distribution to a beneficiary of income accumulated before he reached 21 would not reduce the undistributed net income includible in a future accumulation distribution to another beneficiary. However, all future distributions to the same beneficiary, or to another beneficiary to whom a distribution would be excepted under the provisions of this subparagraph, would be excepted from the definition of an accumulation distribution to the extent that they could not be paid, credited, or required to be distributed from other accumulated income.
              (iii) The following examples illustrate the application of the foregoing rules of this subparagraph (in each of these examples it is assumed that the exceptions in section 665(b) (2), (3), and (4) do not apply):
              (a) Income is to be accumulated until A reaches 21 when the corpus and accumulated income are to be distributed to him. The distribution is not an accumulation distribution.
              (b) Income is to be accumulated until A is 21, when it is to be distributed to him but the corpus is to remain in trust. A distribution of the accumulated income to A when he reaches 21 is not an accumulation distribution.
              (c) Income is to be accumulated and added to corpus until A reaches 21, when he is to receive one-third of the corpus (including accumulations). Thereafter all the income is to be paid to A until he is 23 when the remaining corpus (including accumulations) is to be paid to him. If A dies under that age any undistributed portion is to be paid to B. Distributions to A at 21 and 23 out of accumulations are not accumulation distributions even though they include accumulated income. However, if A died at the age of 22, when B was 23, a distribution to B would be an accumulation distribution to the extent of income accumulations since B reached 21, and the amount of undistributed net income includible in the distribution will not be reduced by the previous distribution to A.
              (d) Income is to be accumulated and added to corpus until A is 21. After he is 21, he is entitled to all the income and, in addition, to distributions of corpus in the discretion of the trustee. When he reaches 25 he is entitled to the corpus. Distributions to A are not accumulation distributions, whether they are discretionary or upon termination of the trust.
              (e) The facts are the same as in the preceding example, except that income is to be accumulated until A is 23. Distributions to A are accumulation distributions to the extent of income accumulated after A reached 21.
              (f) Income may be distributed among a testator's children or accumulated and added to corpus until the youngest child is 21, when the corpus is to be distributed to the testator's then living descendants. Upon termination of the trust, the corpus is distributed to A, age 21; B, age 23; and C, the child of a deceased child, age 3. The distributions to A and C are not accumulation distributions. The distribution to B is an accumulation distribution to the extent of income accumulated after he reaches 21. (If the terms of the trust were such that it was subject to the separate share treatment under section 663(c), the distribution to B would be an accumulation distribution only to the extent of income accumulated for B's separate share since he reached 21.)
              (g) Income may be distributed to A or accumulated and added to corpus during A's life. Upon the death of A the corpus is to be distributed to B. B is 23 at A's death. The distribution is an accumulation distribution to the extent of income accumulated since B reached 21.
              (2) Emergency distributions. The second exclusion from the definition of an accumulation distribution is for amounts properly paid or credited to a beneficiary to meet his emergency needs. Whether or not a distribution falls within this exclusion depends upon the facts and circumstances causing the distribution. A distribution based upon an unforeseen or unforeseeable combination of circumstances requiring immediate help to the beneficiary would qualify for the exclusion. However, the beneficiary must be in actual need of the distribution and the fact that he had other sufficient resources would tend to negate the conclusion that a distribution was to meet his emergency needs. Ordinary distributions for the support, maintenance, or education of the beneficiary would not qualify for the exclusion.
              (3) Certain distributions at specified ages. The third exclusion from the definition of an accumulation distribution is for amounts properly paid or credited to a beneficiary upon the beneficiary's attaining a specified age or ages; provided, (i) the total number of such distributions with respect to that beneficiary cannot exceed 4; (ii) the period between each such distribution is 4 years or more; and (iii) on January 1, 1954, such distributions were required by the specific terms of the governing instrument. Any discretionary invasion of corpus at other times is not excluded under this subparagraph, but does not affect the status of distributions that would otherwise be excluded. If more than four distributions are required to be made to a particular beneficiary at specified ages if he survives to receive them, none of the distributions will be excluded, even though the beneficiary dies before he receives more than four. On the other hand, a direction to make additional distributions to a remainderman will not affect the status of distributions required to be made to the primary beneficiary. For example, a trust agreement provided on January 1, 1954, that when A reached age 25 he would receive one-eighth of the corpus and accumulated income, as then constituted, and similar distributions at ages 30, 35, and 40. It also provided for similar distributions to B after A's death, and for additional discretionary distributions to both A and B. Required distributions to both A and B are excluded, regardless of whether discretionary distributions are made, but discretionary distributions are not excluded. On the other hand, if an additional distribution to A was directed when he reached 45, no distributions to him would be excluded, regardless of when he died.
              (4) Certain final distributions. (i) The last exception to the definition of an accumulation distribution is for amounts properly paid or credited to a beneficiary as a final distribution of a trust if the final distribution is made more than 9 years after the date of the last transfer to such trust.
              (ii) The term last transfer to such trust includes only transfers, whether by the original grantor or by a third person, made with a donative intent. A transfer arising out of a property right held by the trust is excluded, such as a transfer by a debtor in satisfaction of his indebtedness, or a distribution in liquidation or reorganization of a corporation. If the terms of two or more trusts include cross-remainders on the deaths of life beneficiaries, the donative transfers occurred at the time the trusts were created. The addition of the corpus of one trust to that of another when a remainder falls in is therefore not a new transfer within the meaning of section 665(b)(4).

              (iii) For example, under the terms of a trust created July 1, 1950, with an original corpus of $100,000, by H for the benefit of his wife, W, the income of the trust is to be accumulated and added to corpus. Upon the expiration of a 10-year period, the trust is to terminate and its assets, including all accumulated income, are to be distributed to W. No transfers were made by H or other persons to the trust after it was created. Both the trust and W file returns on the calendar year basis. In accordance with its terms, the trust terminated on June 30, 1960, and on August 1, 1960, the trustee made a final distribution of the assets of the trust to W, consisting of investments derived from $100,000 of donated principal, accumulated income of $30,000 attributable to the period July 1, 1950, through December 31, 1959, and income of $3,000 attributable to the period the trust was in existence during 1960. Subpart D is inapplicable to the $3,000 of income of the trust for 1960 since that amount would be deductible by the trust and includible in W's gross income for that year to the extent provided in subpart C. However, the balance of the distribution will qualify as an exclusion from the provisions of subpart D.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6989, 34 FR 735, Jan. 17, 1969]

              § 1.665(b)-3
              Exclusions under section 663(a)(1).
              Subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code, has no application to an amount which qualifies as an exclusion under section 663(a)(1), relating to gifts, bequests, etc.

              § 1.665(c)-1
              Accumulation distributions of certain foreign trusts; in general.

              (a) In the case of a foreign trust created by a U.S. person, the term accumulation distribution for any taxable year means an amount by which the amounts properly paid, credited, or required to be distributed within the meaning of section 661(a)(2) for that year exceed the distributable net income (determined under section 643(a)) of the trust, reduced (but not below zero) by the amount of income required to be distributed currently. (In computing the amount of an accumulation distribution pursuant to the preceding sentence, there is taken into account amounts applied or distributed for the support of a dependent under circumstances specified in section 677(b) and section 678(c) out of corpus or out of other than income for the taxable year and amounts used to discharge or satisfy any person's legal obligation as that term is used in § 1.662(a)-4.)
              (b) Although amounts properly paid, credited, or required to be distributed under section 661(a)(2) do not exceed the income of the trust during the taxable year, an accumulation distribution may result if such amounts exceed distributable net income reduced (but not below zero) by the amount required to be distributed currently. This may result from the fact that expenses allocable to corpus are taken into account in determining taxable income and hence distributable net income. However, the provisions of subpart D will not apply unless there is undistributed net income in at least one of the preceding taxable years which began after December 31, 1953, and ended after August 16, 1954. See section 666 and the regulations thereunder.
              (c) The provisions of paragraphs (a) and (b) of this section may be illustrated by the examples provided in paragraph (c) of § 1.665(b)-1.
              [T.D. 6989, 34 FR 735, Jan. 17, 1969]

              § 1.665(c)-2
              Indirect payments to the beneficiary.
              (a) In general. Except as provided in paragraph (b) of this section, for purposes of section 665 any amount paid to a U.S. person which is from a payor who is not a U.S. person and which is derived directly or indirectly from a foreign trust created by a U.S. person shall be deemed in the year of payment to the U.S. person to have been directly paid to the U.S. person by the trust. For example, if a nonresident alien receives a distribution from a foreign trust created by a U.S. person and then pays the amount of the distribution over to a U.S. person, the payment of such amount to the U.S. person represents an accumulation distribution to the U.S. person from the trust to the extent that the amount received would have been an accumulation distribution had the trust paid the amount directly to the U.S. person in the year in which the payment was received by the U.S. person. This section also applies in a case where a nonresident alien receives indirectly an accumulation distribution from a foreign trust created by a U.S. person and then pays it over to a U.S. person. An example of such a transaction is one where the foreign trust created by a U.S. person makes the distribution to an intervening foreign trust created by either a U.S. person or a person other than a U.S. person and the intervening trust distributes the amount received to a nonresident alien who in turn pays it over to a U.S. person. Under these circumstances, it is deemed that the payment received by the U.S. person was received directly from a foreign trust created by a U.S. person.
              (b) Limitation. In the case of a distribution to a beneficiary who is a U.S. person, paragraph (a) of this section does not apply if the distribution is received by such beneficiary under circumstances indicating lack of intent on the part of the parties to circumvent the purposes for which section 7 of the Revenue Act of 1962 (76 Stat. 985) was enacted.
              [T.D. 6989, 34 FR 735, Jan. 17, 1969]

              § 1.665(d)-1
              Taxes imposed on the trust.

              (a) For the purpose of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code, the term taxes imposed on the trust means (for any taxable year) the amount of Federal income taxes which are properly allocable to the undistributed portion of the distributable net income. This amount is the difference between the total taxes of the trust for the year and the amount which would have been paid by the trust had all of the distributable net income, as determined under section 643(a), been distributed. Thus, in determining the amount of taxes imposed on the trust for the purposes of subpart D, there is excluded the portion of the taxes paid by the trust which is attributable to items of gross income which are not includible in distributable net income, such as capital gains allocable to corpus. The rule stated in this paragraph may be illustrated by the following example:

                Example.
                (1) Under the terms of a trust which reports on the calendar year basis the income may be accumulated or distributed to A in the discretion of the trustee and capital gains are allocable to corpus. During the taxable year 1954, the trust had income of $20,000 from royalties, long-term capital gains of $10,000, and expenses of $2,000. The trustee in his discretion made a distribution of $10,000 to A. The taxes imposed on the trust for the purposes of this subpart are $2,713, determined as shown below.
                (2) The distributable net income of the trust computed under section 643(a) is $18,000 (royalties of $20,000 less expenses of $2,000). The total taxes paid by the trust are $3,787, computed as follows:

                    Royalties
                    $20,000

                    Capital gains
                    10,000

                    Gross income
                    30,000

                    Deductions:

                    Expenses
                    $2,000

                    Distributions to A
                    10,000

                    Capital gain deduction
                    5,000

                    Personal exemption
                    100

                    17,100

                    Taxable income
                    12,900

                    Total income taxes
                    3,787

                (3) The amount of taxes which would have been paid by the trust, had all of the distributable net income ($18,000) of the trust been distributed to A, is $1,074, computed as follows:

                    Taxable income of the trust
                    $12,900

                    Less: Undistributed portion of distributable net income ($18,000−$10,000)
                    8,000

                    Balance of taxable income
                    4,900

                    Income taxes on $4,900
                    1,074

                (4) The amount of taxes imposed on the trust as defined in this paragraph is $2,713, computed as follows:

                    Total taxes
                    $3,787

                    Taxes which would have been paid by the trust had all of the distributable net income been distributed
                    1,074

                    Taxes imposed on the trust as defined in this paragraph
                    2,713

              (b) If in any subsequent year an accumulation distribution is made by the trust which results in a throwback to the taxable year, the taxes of the taxable year allocable to the undistributed portion of distributable net income (the taxes imposed on the trust), after the close of the subsequent year, are the taxes prescribed in paragraph (a) of this section reduced by the taxes of the taxable year allowed as credits to beneficiaries on account of amounts deemed distributed on the last day of the taxable year under section 666. See paragraph (f)(4) of § 1.668(b)-2 for an illustration of the application of this paragraph.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960. Redesignated by T.D. 6989, 34 FR 735, Jan. 17, 1969]

              § 1.665(e)-1
              Preceding taxable year.
              (a) Definition. For purposes of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Internal Revenue Code of 1954, the term preceding taxable year does not include any taxable year to which such part I does not apply. See section 683 and regulations thereunder. Accordingly, the provisions of such subpart D may not, in general, be applied to any taxable year which begins before 1954 or ends before August 17, 1954. For example, if a trust (reporting on the calendar year basis) makes a distribution during the calendar year 1955 of income accumulated during prior years and the distribution exceeds the distributable net income of 1955, the excess distribution may be allocated under such subpart D to 1954, but it may not be allocated to 1953 and preceding years, since the Internal Revenue Code of 1939 applies to those years.
              (b) Simple trusts subject to subpart D. An accumulation distribution may be properly allocated to a preceding taxable year in which the trust qualified as a simple trust (that is, qualified for treatment under subpart B (section 651 and following) of such part I). In such event, the trust is treated for such preceding taxable year in all respects as if it were a trust to which subpart C (section 661 and following) of such part I applies. An example of such a circumstance would be in the case of a trust (required under the trust instrument to distribute all of its income currently) which received in the preceding taxable year extraordinary dividends or taxable stock dividends which the trustee in good faith allocated to corpus, but which are subsequently determined to be currently distributable to the beneficiary. See section 643(a)(4) and § 1.643(a)-4. The trust would qualify for treatment under such subpart C for the year of distribution of the extraordinary dividends or taxable stock dividends, because the distribution is not out of income of the current taxable year and would be treated as other amounts properly paid or credited or required to be distributed for such taxable year within the meaning of section 661(a)(2). Also, in the case of a trust other than a foreign trust created by a U.S. person, the distribution would qualify as an accumulation distribution for the purposes of such subpart D if in excess of $2,000 and not excepted under section 665(b) and the regulations thereunder. In the case of a foreign trust created by a U.S. person, the distribution, regardless of the amount, would qualify as an accumulation distribution for the purposes of subpart D. For the purposes only of such subpart D, the trust would be treated as subject to the provisions of such subpart C for the preceding taxable year in which the extraordinary or taxable stock dividends were received and in computing undistributed net income for such preceding year, the extraordinary or taxable stock dividends would be included in distributable net income under section 643(a). The rule stated in the preceding sentence would also apply if the distribution in the later year were made out of corpus without regard to a determination that the extraordinary dividends or taxable stock dividends in question were currently distributable to the beneficiary.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6989, 34 FR 735, Jan. 17, 1969. Redesignated by T.D. 6989, 34 FR 735, Jan. 17, 1969]

              § 1.665(e)-2
              Application of separate share rule.
              In trusts to which the separate share rule of section 663(c) is applicable for any taxable year, subpart D (section 665 and following), part I, subchapter J, of the Code, is applied as if each share were a separate trust. Thus, “undistributed net income” and the amount of an “accumulation distribution” are computed separately for each share. The “taxes imposed on the trust” are allocated as follows:
              (a) There is first allocated to each separate share that portion of the “taxes imposed on the trust”, computed before the allowance of credits under section 642(a), which bears the same relation to the total that the distributable net income of the separate share bears to the distributable net income of the trust, adjusted for this purpose as follows:
              (1) There is excluded from distributable net income of the trust and of each separate share any tax-exempt interest, foreign income of a foreign trust, and excluded dividends, to the extent such amounts are included in distributable net income pursuant to section 643(a) (5), (6), and (7); and

              (2) The distributable net income of the trust is reduced by any deductions allowable under section 661 for amounts paid, credited, or required to be distributed during the taxable year, and the distributable net income of each separate share is reduced by any such deduction allocable to that share.

              (b) The taxes so determined for each separate share are then reduced by that portion of the credits against tax allowable to the trust under section 642(a) in computing the “taxes imposed on the trust” which bear the same relation to the total that the items of income allocable to the separate share with respect to which the credit is allowed bear to the total of such items of the trust. The amount of taxes imposed on the trust allocable to a separate share as so determined is then reduced by the amount of the taxes allowed under sections 667 and 668 as a credit to a beneficiary of the separate share on account of any accumulation distribution determined for any taxable year intervening between the year for which the determination is made and the year of an accumulation distribution with respect to which the determination is made. See paragraph (b) of § 1.665(d)-1.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6989, 34 FR 741, Jan. 17, 1969. Redesignated by T.D. 6989, 34 FR 736, Jan. 17, 1969]

              § 1.666(a)-1A
              Amount allocated.
              (a) In general. In the case of a trust that is subject to subpart C of part I of subchapter J of chapter 1 of the Code (relating to estates and trusts that may accumulate income or that distribute corpus), section 666(a) prescribes rules for determining the taxable years from which an accumulation distribution will be deemed to have been made and the extent to which the accumulation distribution is considered to consist of undistributed net income. In general, an accumulation distribution made in taxable years beginning after December 31, 1969, is deemed to have been made first from the earliest preceding taxable year of the trust for which there is undistributed net income. An accumulation distribution made in a taxable year beginning before January 1, 1970, is deemed to have been made first from the most recent preceding taxable year of the trust for which there is undistributed net income. See § 1.665(e)-1A for the definition of “preceding taxable year.”
              (b) Distributions by domestic trusts—(1) Taxable years beginning after December 31, 1973. An accumulation distribution made by a trust (other than a foreign trust created by a U.S. person) in any taxable year beginning after December 31, 1973, is allocated to the preceding taxable years of the trust (defined in § 1.665(e)-1A(a)(1)(ii) as those beginning after December 31, 1968) according to the amount of undistributed net income of the trust for such years. For this purpose, an accumulation distribution is first to be allocated to the earliest such preceding taxable year in which there is undistributed net income and shall then be allocated, beginning with the next earliest, to any remaining preceding taxable years of the trust. The portion of the accumulation distribution allocated to the earliest preceding taxable year is the amount of the undistributed net income for that preceding taxable year. The portion of the accumulation distribution allocated to any preceding taxable year subsequent to the earliest such preceding taxable year is the excess of the accumulation distribution over the aggregate of the undistributed net income for all earlier preceding taxable years. See paragraph (d) of this section for adjustments to undistributed net income for prior distributions. The provisions of this subparagraph may be illustrated by the following example:

                Example.
                In 1977, a domestic trust reporting on the calendar year basis makes an accumulation distribution of $33,000. Therefore, years before 1969 are ignored. In 1969, the trust had $6,000 of undistributed net income; in 1970, $4,000; in 1971, none; in 1972, $7,000; in 1973, $5,000; in 1974, $8,000; in 1975, $6,000; and $4,000 in 1976. The accumulation distribution is deemed distributed $6,000 in 1969, $4,000 in 1970, none in 1971, $7,000 in 1972, $5,000 in 1973, $8,000 in 1974, and $3,000 in 1975.

              (2) Taxable years beginning after December 31, 1969, and before January 1, 1974. If a trust (other than a foreign trust created by a U.S. person) makes an accumulation distribution in a taxable year beginning after December 31, 1969, and before January 1, 1974, the distribution will be deemed distributed in the same manner as accumulation distributions qualifying under subparagraph (1) of this paragraph, except that the first year to which the distribution may be thrown back cannot be earlier than the fifth taxable year of the trust preceding the year in which the accumulation distribution is made. Thus, for example, in the case of an accumulation distribution made in the taxable year of a domestic trust which begins on January 1, 1972, the taxable year of the trust beginning on January 1, 1967, would be the first year in which the distribution was deemed made, assuming that there was undistributed net income for 1967. See also § 1.665(e)-1A(a)(1). The provisions of this subparagraph may be illustrated by the following example:

                Example.
                In 1973, a domestic trust, reporting on the calendar year basis, makes an accumulation distribution of $25,000. In 1968, the fifth year preceding 1973, the trust had $7,000 of undistributed net income; in 1969, none; in 1970, $12,000; in 1971, $4,000; in 1972, $4,000. The accumulation distribution is deemed distributed in the amounts of $7,000 in 1968, none in 1969, $12,000 in 1970, $4,000 in 1971, and $2,000 in 1972.

              (3) Taxable years beginning after December 31, 1968, and before January 1, 1970. Accumulation distributions made in taxable years of the trust beginning after December 31, 1968, and before January 1, 1970, are allocated to prior years according to § 1.666(a)-1.
              (c) Distributions by foreign trusts—(1) Foreign trusts created solely by U.S. persons—(i) Taxable years beginning after December 31, 1969. If a foreign trust created by a U.S. person makes an accumulation distribution in any taxable year beginning after December 31, 1969, the distribution is allocated to the trust's preceding taxable years (defined in § 1.665(e)-1A(a)(2) as those beginning after Dec. 31, 1953, and ending after Aug. 16, 1954) according to the amount of undistributed net income of the trust for such years. For this purpose, an accumulation distribution is first allocated to the earliest such preceding taxable year in which there is undistributed net income and shall then be allocated in turn, beginning with the next earliest, to any remaining preceding taxable years of the trust. The portion of the accumulation distribution allocated to the earliest preceding taxable year is the amount of the undistributed net income for that preceding taxable year. The portion of the accumulation distribution allocated to any preceding taxable year subsequent to the earliest such preceding taxable year is the excess of the accumulation distribution over the aggregate of the undistributed net income for all earlier preceding taxable years. See paragraph (d) of this section for adjustments to undistributed net income for prior distributions. The provisions of this subdivision may be illustrated by the following example:

                Example.
                In 1971, a foreign trust created by a U.S. person, reporting on the calendar year basis, makes an accumulation distribution of $50,000. In 1961, the trust had $12,000 of undistributed net income; in 1962, none; in 1963, $10,000; in 1964, $8,000; in 1965, $5,000; in 1966, $14,000; in 1967, none; in 1968, $3,000; in 1969, $2,000; and in 1970, $1,000. The accumulation distribution is deemed distributed in the amounts of $12,000 in 1961, none in 1962, $10,000 in 1963, $8,000 in 1964, $5,000 in 1965, $14,000 in 1966, none in 1967, and $1,000 in 1968.

              (ii) Taxable years beginning after December 31, 1968, and before January 1, 1970. Accumulation distributions made in taxable years of the trust beginning after December 31, 1968, and before January 1, 1970, are allocated to prior years according to § 1.666(a)-1.
              (2) Foreign trusts created partly by U.S. persons—(i) Taxable years beginning after December 31, 1969. If a trust that is in part a foreign trust created by a U.S. person and in part a foreign trust created by a person other than a U.S. person makes an accumulation distribution in any year after December 31, 1969, the distribution is deemed made from the undistributed net income of the foreign trust created by a U.S. person in the proportion that the total undistributed net income for all preceding years of the foreign trust created by the U.S. person bears to the total undistributed net income for all years of the entire foreign trust. In addition, such distribution is deemed made from the undistributed net income of the foreign trust created by a person other than a U.S. person in the proportion that the total undistributed net income for all preceding years of the foreign trust created by a person other than a U.S. person bears to the total undistributed net income for all years of the entire foreign trust. Accordingly, an accumulation distribution of such a trust is composed of two portions with one portion relating to the undistributed net income of the foreign trust created by the U.S. person and the other portion relating to the undistributed net income of the foreign trust created by the person other than a U.S. person. For these purposes, each portion of an accumulation distribution made in any taxable year is first allocated to each of such preceding taxable years in turn, beginning with the earliest preceding taxable year, as defined in § 1.665(e)-1A(a), of the applicable foreign trusts, to the extent of the undistributed net income for the such trust for each of those years. Thus, each portion of an accumulation distribution is deemed to have been made from the earliest accumulated income of the applicable trust. If the foreign trust created by a U.S. person makes an accumulation distribution in any year beginning after December 31, 1969, the distribution is included in the beneficiary's income for that year to the extent of the undistributed net income of the trust for the trust's preceding taxable years which began after December 31, 1953, and ended after August 16, 1954. The provisions of this subdivision may be illustrated by the following example:

                Example.
                A trust is created in 1962 under the laws of Country X by the transfer to a trustee in Country X of property by both a U.S. person and a person other than a U.S. person. Both the trust and the only beneficiary of the trust (who is a U.S. person) report their taxable income on a calendar year basis. On March 31, 1974, the trust makes an accumulation distribution of $150,000 to the beneficiary. The distributable net income of both the portion of the trust which is a foreign trust created by a U.S. person and the portion of the trust which is a foreign trust created by a person other than a U.S. person for each year is computed in accordance with the provisions of paragraph (b)(3) of § 1.643(d)-1 and the undistributed net income for each portion of the trust for each year is computed as described in paragraph (b) of § 1.665(a)-1A. For taxable years 1962 through 1973, the portion of the trust which is a foreign trust created by a U.S. person and the portion of the trust which is a foreign trust created by a person other than a U.S. person had the following amounts of undistributed net income:

                    Year
                    Undistributed net income-portion of the trust created by a U.S. person
                    Undistributed net income-portion of the trust created by a person other than a U.S. person

                    1962
                    $7,000
                    $4,000

                    1963
                    12,000
                    7,000

                    1964
                    None
                    None

                    1965
                    11,000
                    5,000

                    1966
                    8,000
                    3,000

                    1967
                    None
                    None

                    1968
                    4,000
                    2,000

                    1969
                    17,000
                    8,000

                    1970
                    16,000
                    9,000

                    1971
                    None
                    None

                    1972
                    25,000
                    12,000

                    1973
                    20,000
                    10,000

                     Totals
                    120,000
                    60,000

                The accumulation distribution in the amount of $150,000 is deemed to have been distributed in the amount of $100,000 (120,000/180,000 × $150,000) from the portion of the trust which is a foreign trust created by a U.S. person and in the amount of $39,000, which is less than $50,000 (60,000/180,000 × $150,000), from the portion of the trust which is a foreign trust created by a person other than a U.S. person computed as follows:

                    Year
                    Throwback to preceding years of foreign trust created by a U.S. person
                    Throwback to preceding years of portion of the entire foreign trust which is not a foreign trust created by a U.S. person

                    1962
                    $7,000
                    None

                    1963
                    12,000
                    None

                    1964
                    None
                    None

                    1965
                    $11,000
                    None

                    1966
                    8,000
                    None

                    1967
                    None
                    None

                    1968
                    4,000
                    None

                    1969
                    17,000
                    $8,000

                    1970
                    16,000
                    9,000

                    1971
                    None
                    None

                    1972
                    $25,000
                    $12,000

                    1973
                    None
                    10,000

                     Totals
                    100,000
                    39,000

                Pursuant to this paragraph, the accumulation distribution in the amount of $100,000 from the portion of the trust which is a foreign trust created by a U.S. person is included in the beneficiary's income for 1974, as the amount represents undistributed net income of the trust for the trust's preceding taxable years which began after December 31, 1953, and ended after August 16, 1954. The accumulation distribution in the amount of $50,000 from the portion of the trust which is a foreign trust created by a person other than a U.S. person is included in the beneficiary's income for 1974 to the extent of the undistributed net income of the trust for the preceding years beginning after December 31, 1968. Accordingly, with respect to the portion of the trust which is a foreign trust created by a person other than a U.S. person, only the undistributed net income for the years 1969 through 1973, which totals $39,000, is includible in the beneficiary's income for 1974. Thus, of the $150,000 distribution made in 1974, the beneficiary is required to include a total of $139,000 in his income for 1974. The balance of $11,000 is deemed to represent a distribution of corpus.

              (ii) Taxable years beginning after December 31, 1968, and before January 1, 1970. Accumulation distributions made in taxable years of the trust beginning after December 31, 1968, and before January 1, 1970, are allocated to prior years according to § 1.666(a)-1.
              (3) Foreign trusts created by non-U.S. persons. To the extent that a foreign trust is a foreign trust created by a person other than a U.S. person, an accumulation distribution is included in the beneficiary's income for the year paid, credited, or required to be distributed to the extent provided under paragraph (b) of this section.
              (d) Reduction of undistributed net income for prior accumulation distributions. For the purposes of allocating to any preceding taxable year an accumulation distribution of the taxable year, the undistributed net income of such preceding taxable year is reduced by the amount from such year deemed distributed in any accumulation distribution of undistributed net income made in any taxable year intervening between such preceding taxable year and the taxable year. Accordingly, for example, if a trust has undistributed net income for 1974 and makes accumulation distributions during the taxable years 1978 and 1979, in determining that part of the 1979 accumulation distribution that is thrown back to 1974 the undistributed net income for 1974 is first reduced by the amount of the undistributed net income for 1974 deemed distributed in the 1978 accumulation distribution.
              (e) Rule when no undistributed net income. If, before the application of the provisions of subpart D to an accumulation distribution for the taxable year, there is no undistributed net income for a preceding taxable year, then no portion of the accumulation distribution is undistributed net income deemed distributed on the last day of such preceding taxable year. Thus, if an accumulation distribution is made during the taxable year 1975 from a trust whose earliest preceding taxable year is taxable year 1970, and the trust had no undistributed net income for 1970, then no portion of the 1975 accumulation distribution is undistributed net income deemed distributed on the last day of 1970.
              [T.D. 7204, 37 FR 17143, Aug. 25, 1972]

              § 1.666(b)-1A
              Total taxes deemed distributed.
              (a) If an accumulation distribution is deemed under § 1.666(a)-1A to be distributed on the last day of a preceding taxable year and the amount is not less than the undistributed net income for such preceding taxable year, then an additional amount equal to the “taxes imposed on the trust attributable to the undistributed net income” (as defined in § 1.665(d)-1A(b)) for such preceding taxable year is also deemed distributed under section 661(a)(2). For example, a trust has undistributed net income of $8,000 for the taxable year 1974. The taxes imposed on the trust attributable to the undistributed net income are $3,032. During the taxable year 1977, an accumulation distribution of $8,000 is made to the beneficiary, which is deemed under § 1.666(a)-1A to have been distributed on the last day of 1974. The 1977 accumulation distribution is not less than the 1974 undistributed net income. Accordingly, the taxes of $3,032 imposed on the trust attributable to the undistributed net income for 1974 are also deemed to have been distributed on the last day of 1974. Thus, a total of $11,032 will be deemed to have been distributed on the last day of 1974.
              (b) For the purpose of paragraph (a) of this section, the undistributed net income of any preceding taxable year and the taxes imposed on the trust for such preceding taxable year attributable to such undistributed net income are computed after taking into account any accumulation distributions of taxable years intervening between such preceding taxable year and the taxable year. See paragraph (d) of § 1.666(a)-1A.
              [T.D. 7204, 37 FR 17145, Aug. 25, 1972]

              § 1.666(c)-1A
              Pro rata portion of taxes deemed distributed.
              (a) If an accumulation distribution is deemed under § 1.666(a)-1A to be distributed on the last day of a preceding taxable year and the amount is less than the undistributed net income for such preceding taxable year, then an additional amount is also deemed distributed under section 661(a)(2). The additional amount is equal to the “taxes imposed on the trust attributable to the undistributed net income” (as defined in § 1.665(a)-1A(b)) for such preceding taxable year, multiplied by a fraction, the numerator of which is the amount of the accumulation distribution allocated to such preceding taxable year and the denominator of which is the undistributed net income for such preceding taxable year. See paragraph (b) of example 1 and paragraphs (c) and (f) of example 2 in § 1.666(c)-2A for illustrations of this paragraph.
              (b) For the purpose of paragraph (a) of this section, the undistributed net income of any preceding taxable year and the taxes imposed on the trust for such preceding taxable year attributable to such undistributed net income are computed after taking into account any accumulation distributions of any taxable years intervening between such preceding taxable year and the taxable year. See paragraph (d) of § 1.666(a)-1A and paragraph (c) of example 1 and paragraphs (e) and (h) of example 2 in § 1.666(c)-2A.
              [T.D. 7204, 37 FR 17145, Aug. 25, 1972]

              § 1.666(c)-2A
              Illustration of the provisions of section 666 (a), (b), and (c).

              The application of the provisions of §§ 1.666(a)-1A, 1.666(b)-1A, and 1.666(c)-1A may be illustrated by the following examples:

                Example 1.

                (a) A trust created on January 1, 1974, makes accumulation distributions as follows:

                  1979
                  $7,000
                  1980
                  26,000

                For 1974 through 1978, the undistributed portion of distributable net income, taxes imposed on the trust attributable to the undistributed net income, and undistributed net income are as follows:

                    Year
                    Undistributed portion of distributable net income
                    Taxes imposed on the trust attributable to the undistributed net income
                    Undistributed net income

                    1974
                    $12,100
                    $3,400
                    $8,700

                    1975
                    16,100
                    5,200
                    10,900

                    1976
                    6,100
                    1,360
                    4,740

                    1977
                    None
                    None
                    None

                    1978
                    10,100
                    2,640
                    7,460

                The trust has no undistributed capital gain.
                (b) Since the entire amount of the accumulation distribution for 1979 ($7,000) is less than the undistributed net income for 1974 ($8,700), an additional amount of $2,736 (7,000/8,700 × $3,400) is deemed distributed under section 666(c).
                (c) In allocating the accumulation distribution for 1980, the amount of undistributed net income for 1974 will reflect the accumulation distribution for 1979. The undistributed net income for 1974 will then be $1,700 and the taxes imposed on the trust for 1974 will be $664, determined as follows:

                    Undistributed net income as of the close of 1974
                    $8,700

                    Less: Accumulation distribution (1979)
                    7,000

                    Balance (undistributed net income as of the close of 1979)
                    1,700

                    Taxes imposed on the trust attributable to the undistributed net income as of the close of 1979 (1,700/8,700 × $3,400)
                    664

                (d) The accumulation distribution of $26,000 for 1980 is deemed to have been made on the last day of the preceding taxable years of the trust to the extent of $24,800, the total of the undistributed net income for such years, as shown in the tabulation below. In addition, $9,864, the total taxes imposed on the trust attributable to the undistributed net income for such years is also deemed to have been distributed on the last day of such years, as shown below:

                    Year
                    Undistributed net income
                    Taxes imposed on the trust

                    1974
                    $1,700
                    $664

                    1975
                    10,900
                    5,200

                    1976
                    4,740
                    1,360

                    1977
                    None
                    None

                    1978
                    7,460
                    2,640

                    1979
                    None
                    None

                Example 2.

                (a) Under the terms of a trust instrument, the trustee has discretion to accumulate or distribute the income to X and to invade corpus for the benefit of X. The entire income of the trust is from royalties. Both X and the trust report on the calendar year basis. All of the income for 1974 was accumulated. The distributable net income of the trust for the taxable year 1974 is $20,100 and the income taxes paid by the trust for 1974 attributable to the undistributed net income are $7,260. All of the income for 1975 and 1976 was distributed and in addition the trustee made accumulation distributions within the meaning of section 665(b) of $5,420 for each year.
                (b) The undistributed net income of the trust determined under section 665(a) as of the close of 1974, is $12,840, computed as follows:

                    Distributable net income
                    $20,100

                    Less: Taxes imposed on the trust attributable to the undistributed net income
                    7,260

                    Undistributed net income as of the close of 1974
                    12,840

                (c) The accumulation distribution of $5,420 made during the taxable year 1975 is deemed under section 666(a) to have been made on December 31, 1974. Since this accumulation distribution is less than the 1974 undistributed net income of $12,840, a portion of the taxes imposed on the trust for 1974 is also deemed under section 666(c) to have been distributed on December 31, 1974. The total amount deemed to have been distributed to X on December 31, 1974 is $8,484, computed as follows:

                    Accumulation distribution
                    $5,420

                    Taxes deemed distributed (5,420/ 12,840 × $7,260)
                    3,064

                    Total
                    8,484

                (d) After the application of the provisions of subpart D to the accumulation distribution of 1975, the undistributed net income of the trust for 1974 is $7,420, computed as follows:

                    Undistributed net income as of the close of 1974
                    $12,840

                    Less: 1975 accumulation distribution deemed distributed on December 31, 1974 (paragraph (c) of this example)
                    5,420

                    Undistributed net income for 1974 as of the close of 1975
                    7,420

                (e) The taxes imposed on the trust attributable to the undistributed net income for the taxable year 1974, as adjusted to give effect to the 1975 accumulation distribution, amount to $4,196, computed as follows:

                    Taxes imposed on the trust attributable to undistributed net income as of the close of 1974
                    $7,260

                    Less: Taxes deemed distributed in 1974
                    3,064

                    Taxes attributable to the undistributed net income determined as of the close of 1975
                    4,196

                (f) The accumulation distribution of $5,420 made during the taxable year 1976 is, under section 666(a), deemed a distribution to X on December 31, 1974, within the meaning of section 661(a)(2). Since the accumulation distribution is less than the 1974 adjusted undistributed net income of $7,420, the trust is deemed under section 666(c) also to have distributed on December 31, 1974, a portion of the taxes imposed on the trust for 1974. The total amount deemed to be distributed on December 31, 1974, with respect to the accumulation distribution made in 1976, is $8,484, computed as follows:

                    Accumulation distribution
                    $5,420

                    Taxes deemed distributed (5,420/ 7,420 × $4,196)
                    3,064

                    Total
                    8,484

                (g) After the application of the provisions of subpart D to the accumulation distribution of 1976, the undistributed net income of the trust for 1974 is $2,000, computed as follows:

                    Undistributed net income for 1974 as of the close of 1975
                    $7,420

                    Less: 1976 accumulation distribution deemed distributed on December 31, 1974 (paragraph (f) of this example)
                    5,420

                    Undistributed net income for 1974 as of the close of 1976
                    2,000

                (h) The taxes imposed on the trust attributable to the undistributed net income of the trust for the taxable year 1974, determined as of the close of the taxable year 1976, amount to $1,132 ($4,196 less $3,064).

              [T.D. 7204, 37 FR 17145, Aug. 25, 1972]

              § 1.666(d)-1A
              Information required from trusts.
              (a) Adequate records required. For all taxable years of a trust, the trustee must retain copies of the trust's income tax return as well as information pertaining to any adjustments in the tax shown as due on the return. The trustee shall also keep the records of the trust required to be retained by section 6001 and the regulations thereunder for each taxable year as to which the period of limitations on assessment of tax under section 6501 has not expired. If the trustee fails to produce such copies and records, and such failure is due to circumstances beyond the reasonable control of the trustee or any predecessor trustee, the trustee may reconstruct the amount of corpus, accumulated income, etc., from competent sources (including, to the extent permissible, Internal Revenue Service records). To the extent that an accurate reconstruction can be made for a taxable year, the requirements of this paragraph shall be deemed satisfied for such year.
              (b) Rule when information is not available—(1) Accumulation distributions. If adequate records (as required by paragraph (a) of this section) are not available to determine the proper application of subpart D to an accumulation distribution made in a taxable year by a trust, such accumulation distribution shall be deemed to consist of undistributed net income earned during the earliest preceding taxable year (as defined in § 1.665(e)-1A) of the trust in which it can be established that the trust was in existence. If adequate records are available for some years, but not for others, the accumulation distribution shall be allocated first to the earliest preceding taxable year of the trust for which there are adequate records and then to each subsequent preceding taxable year for which there are adequate records. To the extent that the distribution is not allocated in such manner to years for which adequate records are available, it will be deemed distributed on the last day of the earliest preceding taxable year of the trust in which it is established that the trust was in existence and for which the trust has no records. The provisions of this subparagraph may be illustrated by the following example:

                Example.
                A trust makes a distribution in 1975 of $100,000. The trustee has adequate records for 1973, 1974, and 1975. The records show that the trust is on the calendar year basis, had distributable net income in 1975 of $20,000, and undistributed net income in 1974 of $15,000, and in 1973 of $16,000. The trustee has no other records of the trust except for a copy of the trust instrument showing that the trust was established on January 1, 1965. He establishes that the loss of the records was due to circumstances beyond his control. Since the distribution is made in 1975, the earliest “preceding taxable year”, as defined in § 1.665(e)-1A, is 1969. Since $80,000 of the distribution is an accumulation distribution, and $31,000 thereof is allocated to 1974 and 1973, $49,000 is deemed to have been distributed on the last day of 1969.

              (2) Taxes. (i) If an amount is deemed under this paragraph to be undistributed net income allocated to a preceding taxable year for which adequate records are not available, there shall be deemed to be “taxes imposed on the trust” for such preceding taxable year an amount equal to the taxes that the trust would have paid if the deemed undistributed net income were the amount remaining when the taxes were subtracted from taxable income of the trust for such year. For example, assume that an accumulation distribution in 1975 of $100,000 is deemed to be undistributed net income from 1971, and that the taxable income required to produce $100,000 after taxes in 1971 would be $284,966. Therefore the amount deemed to be “taxes imposed on the trust” for such preceding taxable year is $184,966.
              (ii) The credit allowed by section 667(b) shall not be allowed for any amount deemed under this subparagraph to be “taxes imposed on the trust.”
              [T.D. 7204, 37 FR 17146, Aug. 25, 1972]

              § 1.666(a)-1
              Amount allocated.
              (a)(1) If a trust other than a foreign trust created by a U.S. person makes an accumulation distribution in any taxable year, the distribution is included in the beneficiary's gross income for that year to the extent of the undistributed net income of the trust for the preceding 5 years. It is therefore necessary to determine the extent to which there is undistributed net income for the preceding 5 years. For this purpose, an accumulation distribution made in any taxable year is allocated to each of the 5 preceding taxable years in turn, beginning with the most recent year, to the extent of the undistributed net income of each of those years. Thus, an accumulation distribution is deemed to have been made from the most recently accumulated income of the trust.
              (2) If a foreign trust created by a U.S. person makes an accumulation distribution in any year after December 31, 1962, the distribution is included in the beneficiary's gross income for that year to the extent of the undistributed net income of the trust for the trust's preceding taxable years which began after December 31, 1953, and ended after August 16, 1954. It is therefore necessary to determine the extent to which there is undistributed net income for such preceding taxable years. For this purpose, an accumulation distribution made in any taxable year is first allocated to each of such preceding taxable years in turn, beginning with the most recent year, to the extent of the undistributed net income of each of those years. Thus, an accumulation distribution is deemed to have been made from the most recently accumulated income of the trust.

              (3) If a trust that is in part a foreign trust created by a U.S. person and in part a foreign trust created by a person other than a U.S. person makes an accumulation distribution in any year after December 31, 1962, the distribution is deemed made from the undistributed net income of the foreign trust created by a U.S. person in the proportion that the total undistributed net income for all preceding years of the foreign trust created by the U.S. person bears to the total undistributed net income for all years of the entire foreign trust. In addition, such distribution is deemed made from the undistributed net income of the foreign trust created by a person other than a U.S. person in the proportion that the total undistributed net income for all preceding years of the foreign trust created by a person other than a U.S. person bears to the total undistributed net income for all years of the entire foreign trust. Accordingly, an accumulation distribution of such a trust is composed of two portions with one portion relating to the undistributed net income of the foreign trust created by the U.S. person and the other portion relating to the undistributed net income of the foreign trust created by the person other than a U.S. person. For these purposes, each portion of an accumulation distribution made in any taxable year is first allocated to each of such preceding taxable years in turn, beginning with the most recent year, to the extent of the undistributed net income for the applicable foreign trust for each of those years. Thus, each portion of an accumulation distribution is deemed to have been made from the most recently accumulated income of the applicable trust. If the foreign trust created by a U.S. person makes an accumulation distribution in any year after December 31, 1962, the distribution is included in the beneficiary's gross income for that year to the extent of the undistributed net income of the trust for the trust's preceding taxable years which began after December 31, 1953, and ended after August 16, 1954. If the foreign trust created by a person other than a U.S. person makes an accumulation distribution in any taxable year, the distribution is included in the beneficiary's gross income for that year to the extent of the undistributed net income of the trust for the preceding 5 years.

              (b) If, before the application of the provisions of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code, to an accumulation distribution for the taxable year, there is no undistributed net income for a preceding taxable year, then no portion of the accumulation distribution is deemed distributed on the last day of such preceding taxable year. Thus, if an accumulation distribution is made during the taxable year 1960 and the trust had no undistributed net income for the taxable year 1959, then no portion of the 1960 accumulation distribution is deemed distributed on the last day of 1959. For purposes of subpart D, the term 5 preceding taxable years includes only the 5 taxable years immediately preceding the taxable year in which the accumulation distribution is made and which are subject to part I (section 641 and following) of such subchapter J even though the trust has no undistributed net income during one or more of those years.

              (c) Paragraphs (a) and (b) of this section may be illustrated by the following examples:

                Example 1.
                In 1964, a domestic trust, reporting on the calendar year basis, makes an accumulation distribution of $25,000. In 1963, the trust had $7,000 of undistributed net income; in 1962, none; in 1961, $12,000; in 1960, $4,000; in 1959, $4,000. The accumulation distribution is deemed distributed $7,000 in 1963, none in 1962, $12,000 in 1961, $4,000 in 1960, and $2,000 in 1959.

                Example 2.
                In 1964, a foreign trust created by a U.S. person, reporting on the calendar year basis, makes an accumulation distribution of $50,000. In 1963, the trust had $12,000 of undistributed net income; in 1962, none; in 1961, $10,000; in 1960, $8,000; in 1959, $5,000; in 1958, $14,000; in 1957, none; in 1956, $3,000; in 1955, $2,000; and in 1954, $1,000. The accumulation distribution is deemed distributed $12,000 in 1963, none in 1962, $10,000 in 1961, $8,000 in 1960, $5,000 in 1959, $14,000 in 1958, none in 1957, $1,000 in 1956.

                Example 3.

                A trust is created in 1952 under the laws of Country X by the transfer to a trustee in Country X of money and property by both a U.S. person and a person other than a U.S. person. Both the trust and the only beneficiary of the trust (who is a U.S. person) report their taxable income on a calendar year basis. On March 31, 1964, the trust makes an accumulation distribution of $150,000 to the U.S. beneficiary. The distributable net income of both the portion of the trust which is a foreign trust created by a U.S. person and the portion of the trust which is a foreign trust created by a person other than a U.S. person for each year is computed in accordance with the provisions of paragraph (b)(3) of § 1.643(d)-1 and the undistributed net income for each portion of the trust for each year is computed as described in paragraph (b) of § 1.665(a)-1. For the taxable years 1952 through 1963, the portion of the trust which is a foreign trust created by a U.S. person and the portion of the trust which is a foreign trust created by a person other than a U.S. person had the following amounts of undistributed net income:

                    Year
                    Undistributed net income—portion of the trust created by a U.S. person
                    Undistributed net income—portion of the trust created by a person other than a U.S. person

                    1963
                    $20,000
                    $10,000

                    1962
                    25,000
                    12,000

                    1961
                    None
                    None

                    1960
                    16,000
                    9,000

                    1959
                    17,000
                    8,000

                    1958
                    4,000
                    2,000

                    1957
                    None
                    None

                    1956
                    8,000
                    3,000

                    1955
                    11,000
                    5,000

                    1954
                    None
                    None

                    1953
                    12,000
                    7,000

                    1952
                    7,000
                    4,000

                    Totals
                    120,000
                    60,000

                The accumulation distribution in the amount of $150,000 is deemed to have been distributed in the amount of $100,000 (120,000/180,000 × $150,000) from the portion of the trust which is a foreign trust created by a U.S. person, and in the amount of $50,000 (60,000/180,000 × $150,000) from the portion of the trust which is a foreign trust created by a person other than a U.S. person computed as follows:

                    Year
                    Throwback to preceding years of foreign trust created by a U.S. person
                    Throwback to preceding years of portion of the entire foreign trust which is not a foreign trust created by a U.S. person

                    1963
                    $20,000
                    $10,000

                    1962
                    25,000
                    12,000

                    1961
                    None
                    None

                    1960
                    16,000
                    9,000

                    1959
                    17,000
                    8,000

                    1958
                    4,000
                    2,000

                    1957
                    None
                    None

                    1956
                    8,000
                    3,000

                    1955
                    10,000
                    5,000

                    1954
                    None
                    None

                    1953
                    None
                    1,000

                    1952
                    None
                    None

                    Totals
                    100,000
                    50,000

                Pursuant to paragraph (a)(3) of this section, the accumulation distribution in the amount of $100,000 from the portion of the trust which is a foreign trust created by a U.S. person is included in the beneficiary's gross income for 1964, as this amount represents undistributed net income of the trust for the trust's preceding taxable years which began after December 31, 1953, and ended after August 16, 1954. The accumulation distribution in the amount of $50,000 from the portion of the trust which is a foreign trust created by a person other than a U.S. person is included in the beneficiary's gross income for 1964 to the extent of the undistributed net income of the trust for the preceding 5 years. Accordingly, with respect to the portion of the trust which is a foreign trust created by a person other than a U.S. person only the undistributed net income for the years 1959 through 1963 which totals $39,000 is includible in the beneficiary's gross income for 1964. Thus, of the $150,000 distribution made in 1964, the beneficiary is required to include a total of $139,000 in his gross income for 1964.

                Example 4.
                Assume the same facts as in example 3 and, in addition, that by December 31, 1964, the undistributed net income for 1964 is determined to be $20,000, and that in accordance with the provisions of paragraph (b)(3) of § 1.643(d)-1 and paragraph (b) of § 1.665(a)-1, $10,000 is allocated to the portion of the trust which is a foreign trust created by a U.S. person and $10,000 is allocated to the portion of the trust which is a foreign trust created by a person other than a U.S. person. On March 31, 1965, the trust makes an accumulation distribution of $25,000 to the U.S. beneficiary. For the taxable years 1952 through 1964, the portion of the trust which is a foreign trust created by a U.S. person and the portion of the trust which is a foreign trust created by a person other than a U.S. person had the following amounts of undistributed net income:

                    Year
                    Undistributed net income—portion of the trust created by a U.S. person
                    Undistributed net income—portion of the trust created by a person other than a U.S. person

                    1964
                    $10,000
                    $10,000

                    1963
                    None
                    None

                    1962
                    None
                    None

                    1961
                    None
                    None

                    1960
                    None
                    None

                    1959
                    None
                    None

                    1958
                    None
                    None

                    1957
                    None
                    None

                    1956
                    None
                    None

                    1955
                    1,000
                    None

                    1954
                    None
                    None

                    1953
                    12,000
                    6,000

                    1952
                    7,000
                    4,000

                    Totals
                    30,000
                    20,000

                The accumulation distribution is deemed to have been distributed in the amount of $15,000 (30,000/50,000 × $25,000), from the portion of the trust which is a foreign trust created by a U.S. person, and in the amount of $10,000 (20,000/50,000 × $25,000) from the portion of the trust which is a foreign trust created by a person other than a U.S. person computed as follows:

                    Year
                    Throwback to preceding years of foreign trust created by U.S. person
                    Throwback to preceding years of portion of the entire foreign trust which is not a foreign trust created by a U.S. person

                    1964
                    $10,000
                    $10,000

                    1963
                    None
                    None

                    1962
                    None
                    None

                    1961
                    None
                    None

                    1960
                    None
                    None

                    1959
                    None
                    None

                    1958
                    None
                    None

                    1957
                    None
                    None

                    1956
                    None
                    None

                    1955
                    1,000
                    None

                    1954
                    None
                    None

                    1953
                    4,000
                    None

                    1952
                    None
                    None

                    Totals
                    15,000
                    10,000

                Pursuant to paragraph (a)(3) of this section, only $11,000 of the accumulation distribution in the amount of $15,000 from the portion of the trust which is a foreign trust created by a U.S. person is includible in the beneficiary's gross income for 1965 as the $11,000 amount represents undistributed net income of the trust for the trust's preceding taxable years which began after December 31, 1953, and ended after August 16, 1954. The accumulation distribution in the amount of $10,000 from the portion of the trust which is a foreign trust created by a person other than a U.S. person is included in the beneficiary's gross income for 1965 to the extent of the undistributed net income of the trust for the preceding 5 years. Accordingly, the entire $10,000 (representing the undistributed net income for the year 1964) is includible in the beneficiary's gross income for 1965. Thus, of the $25,000 distribution made in 1965, the beneficiary is required to include a total of $21,000 in his gross income for 1965.

              (d) For the purposes of allocating to any preceding taxable year an accumulation distribution of the taxable year, the undistributed net income of such preceding taxable year is computed without regard to the accumulation distribution of the taxable year or of taxable years following the taxable year. However, accumulation distributions of any taxable years intervening between such preceding taxable year and the taxable year are taken into account. Accordingly, if a trust has undistributed net income for the taxable year 1954 and makes an accumulation distribution during the taxable year 1955, the undistributed net income for 1954 is computed without regard to the accumulation distribution for 1955 or any subsequent year. If the trust makes a further accumulation distribution for 1956, the undistributed net income for 1954 is computed without regard to the accumulation distribution for 1956 or subsequent years; but in determining the undistributed net income for 1954 for purposes of the 1956 accumulation distribution the accumulation distribution for 1955 will be taken into account.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6989, 34 FR 736, Jan. 17, 1969]

              § 1.666(b)-1
              Total taxes deemed distributed.
              (a) If an accumulation distribution is deemed under § 1.666(a)-1 to be distributed on the last day of a preceding taxable year and the amount is not less than the undistributed net income for such preceding taxable year, then an additional amount equal to the “taxes imposed on the trust” (as defined in § 1.665(d)-1) for such preceding taxable year is likewise deemed distributed under section 661(a)(2). For example, a trust has taxable income of $11,032 (not including any capital gains) and undistributed net income of $8,000 for the taxable year 1954. The taxes imposed on the trust are $3,032. During the taxable year 1955, an accumulation distribution of $8,000 is made to the beneficiary, which is deemed under § 1.666(a)-1 to have been distributed on the last day of 1954. The taxes imposed on the trust for 1954 of $3,032 are also deemed to have been distributed on the last day of 1954 since the 1955 accumulation distribution is not less than the 1954 undistributed net income. Thus, a total of $11,032 will be deemed to have been distributed on the last day of 1954 because of the accumulation distribution of $8,000 made in 1955.

              (b) For the purpose of paragraph (a) of this section, the undistributed net income of any preceding taxable year is computed without regard to the accumulation distribution of the taxable year or any taxable year following such taxable year. However, any accumulation distribution of taxable years intervening between such preceding taxable year and the taxable year are taken into account. See paragraph (d) of § 1.666(a)-1 and paragraphs (f)(5) and (g)(1) of § 1.668(b)-2.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6989, 34 FR 741, Jan. 17, 1969]

              § 1.666(c)-1
              Pro rata portion of taxes deemed distributed.
              (a) If an accumulation distribution is deemed under § 1.666(a)-1 to be distributed on the last day of a preceding taxable year and the amount is less than the undistributed net income for such preceding taxable year, then an additional amount is likewise deemed distributed under section 661(a)(2). The additional amount is equal to the taxes imposed on the trust, as defined in § 1.665(d)-1, for such preceding taxable year, multiplied by the fraction of which the numerator is the amount of the accumulation distribution and the denominator is the undistributed net income for such preceding taxable year. See paragraph (b) of example 1 and paragraphs (c) and (f) of example 2 in § 1.666(c)-2, and paragraph (f)(2) of § 1.668(b)-2 for illustrations of this paragraph.
              (b) For the purpose of paragraph (a) of this section, the undistributed net income of any preceding taxable year is computed without regard to the accumulation distribution of the taxable year or any taxable year following the taxable year. However, accumulation distributions of any taxable years intervening between such preceding taxable year and the taxable year are taken into account. See paragraph (d) of § 1.666(a)-1, paragraph (c) of example 1 and paragraphs (e) and (h) of example 2 in § 1.666(c)-2 and paragraph (f)(5)(iii) of § 1.668(b)-2.
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6989, 34 FR 741, Jan. 17, 1969]

              § 1.666(c)-2
              Illustration of the provisions of section 666.

              The application of the provisions of §§ 1.666(a)-1, 1.666(b)-1, and 1.666(c)-1 may be illustrated by the following examples:

                Example 1.

                (a) A trust makes accumulation distributions as follows:

                    1959
                  $7,000
                    1960
                  25,000

                For 1954 through 1958, the undistributed portion of distributable net income taxes imposed on the trust, and undistributed net income are as follows:

                    Year
                    Undistributed portion of distributable net income
                    Taxes imposed on the trust
                    Undistributed net income

                    1958
                    $12,100
                    $3,400
                    $8,700

                    1957
                    16,100
                    5,200
                    10,900

                    1956
                    6,100
                    1,360
                    4,740

                    1955
                    None
                    None
                    None

                    1954
                    10,100
                    2,640
                    7,460

                (b) Since the entire amount of the accumulation distribution for 1959 ($7,000), determined without regard to the accumulation distribution for 1960, is less than the undistributed net income for 1958 ($8,700), an additional amount of $2,736 (7,000/ 8,700 × $3,400) is likewise deemed distributed under section 666(c).
                (c) In allocating the accumulation distribution for 1960, the undistributed net income for 1958 will take into account the accumulation distribution for 1959, and the additional amount of taxes imposed on the trust for 1958 deemed distributed. The undistributed net income for 1958 will then be $1,906; and the taxes imposed on the trust for 1958 will then be $458, determined as follows:

                    Undistributed portion of distributable net income as of the close of 1958
                    $12,100

                    Less:

                    Accumulation distribution (1959)
                    $7,000

                    Taxes deemed distributed under section 666(c) (7,000/8,700 × $3,400)
                    2,736

                    9,736

                    Balance (undistributed portion of distributable net income as of the close of 1959)
                    2,364

                    Less: Personal exemption
                    100

                    Balance
                    2,264

                    Taxes imposed on the trust (income taxes on $2,264)
                    458

                    Undistributed portion of distributable net income as of the close of 1959
                    2,364

                    Less: Income taxes attributable thereto
                    458

                    Undistributed net income for 1958 as of the close of 1959
                    1,906

                (d) The accumulation distribution of $25,000 for 1960 is deemed to have been made on the last day of the 5 preceding taxable years of the trust to the extent of $17,546, the total of the undistributed net income for such years, as shown in the tabulation below. In addition, $7,018, the total taxes imposed on the trust for such years is also deemed to have been distributed on the last day of such years, as shown below:

                    Year
                    Undistributed net income
                    Taxes imposed on the trust

                    1959
                    None
                    None

                    1958
                    $1,906
                    $458

                    1957
                    10,900
                    5,200

                    1956
                    4,740
                    1,360

                    1955
                    None
                    None

                (e) No portion of the 1960 accumulation distribution is deemed made on the last day of 1954 because, as to 1960, 1954 is the sixth preceding taxable year.

                Example 2.
                (a) Under the terms of a trust instrument, the trustee has discretion to accumulate or distribute the income to X and to invade corpus for the benefit of X. The entire income of the trust is from royalties. Both X and the trust report on the calendar year basis. All of the income for 1954 was accumulated. The distributable net income of the trust for the taxable year 1954 is $20,100 and the income taxes paid by the trust for 1954 with respect to its distributable net income are $7,260. All of the income for 1955 and 1956 was distributed and in addition the trustee made accumulation distributions within the meaning of section 665(b) of $6,420 for each year.
                (b) The undistributed net income of the trust determined under section 665(a) as of the close of 1954, is $12,840, computed as follows:

                    Distributable net income
                    $20,100

                    Less: Taxes imposed on the trust
                    7,260

                    Undistributed net income as of the close of 1954
                    12,840

                (c) The accumulation distribution of $6,420 made during the taxable year 1955 is deemed under section 666(a) to have been made on December 31, 1954. Since this accumulation distribution is less than the 1954 undistributed net income of $12,840, a portion of the taxes imposed on the trust for 1954 is also deemed under section 666(c) to have been distributed on December 31, 1954. The total amount deemed to have been distributed to X on December 31, 1954, is $10,050, computed as follows:

                    Accumulation distribution
                    $6,420

                    Taxes deemed distributed (6,420/ 12,840 × $7,260)
                    3,630

                    Total
                    10,050

                (d) After the application of the provisions of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code, to the accumulation distribution of 1955, the undistributed portion of the distributable net income of the trust for 1954, is $10,050, and the taxes imposed with respect thereto are $2,623, computed as follows:

                    Distributable net income as of the close of 1954
                    $20,100

                    Less: 1955 accumulation distribution and taxes deemed distributed on December 31, 1954 (paragraph (c) of this example)
                    10,050

                    Undistributed portion of the 1954 distributable net income adjusted as of the close of 1955
                    10,050

                    Less: Personal exemption
                    100

                    Balance
                    9,950

                    Income taxes on $9,950
                    2,623

                (e) The undistributed net income of the trust for the taxable year 1954, as adjusted to give effect to the 1955 accumulation distribution, is $7,427, computed as follows:

                    Undistributed portion of distributable net income as of the close of 1955
                    $10,050

                    Less: Income taxes applicable thereto
                    2,623

                    Undistributed net income determined as of the close of 1955
                    7,427

                (f) Inasmuch as all of the income of the trust for the taxable year 1955 was distributed to X, the trust had no undistributed net income for that year. Accordingly, the accumulation distribution of $6,420 made during the taxable year 1956 is, under section 666(a), deemed a distribution to X on December 31, 1954, within the meaning of section 661(a)(2). Since this accumulation distribution is less than the 1954 adjusted undistributed net income of $7,427, the trust is deemed under section 666(c) also to have distributed on December 31, 1954, a portion of the taxes imposed on the trust for 1954. The total amount deemed to be distributed on December 31, 1954, with respect to the accumulation distribution made in 1956, is $8,687, computed as follows:

                    Accumulation distribution
                    $6,420

                    Taxes deemed distributed (6,420/ 7,427 × $2,623)
                    2,267

                    Total
                    8,687

                (g) After the application of the provisions of subpart D to the accumulation distribution of 1956, the undistributed portion of the distributable net income of the trust for 1954, is $1,363, and the taxes imposed on the trust with respect thereto are $253, computed as follows:

                    Undistributed portion of distributable net income as of the close of 1955
                    $10,050

                    Less: 1956 accumulation distribution and taxes deemed distributed on December 31, 1954 (paragraph (f) of this example)
                    8,687

                    Undistributed portion of distributable net income as of the close of 1956
                    1,363

                    Less: Personal exemption
                    100

                    Balance
                    1,263

                    Income taxes on $1,263
                    253

                (h) The undistributed net income of the trust for the taxable year 1954, determined as of the close of the taxable year 1956, is $1,110 ($1,363 less $253).

              § 1.667-1
              Denial of refund to trusts.
              (a) If an amount is deemed under section 666 to be an amount paid, credited, or required to be distributed on the last day of a preceding taxable year, the trust is not allowed a refund or credit of the amount of “taxes imposed on the trust”, as defined in § 1.665(d)-1, which would not have been payable for the preceding taxable year had the trust in fact made such distribution on the last day of such year. However, such taxes are allowed as a credit under section 668(b) against the tax of the beneficiaries who are treated as having received the distributions in the preceding taxable year. The amount of taxes which may not be refunded or credited to the trust under this paragraph and which are allowed as a credit under section 668(b) against the tax of the beneficiaries, is an amount equal to the excess of:
              (1) The taxes imposed on the trust (as defined in section 665(d) and § 1.655(d)-1) for any preceding taxable year (computed without regard to the accumulation distribution for the taxable year) over
              (2) The amount of taxes for such preceding taxable year which would be imposed on the undistributed portion of distributable net income of the trust for such preceding taxable year after the application of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code, on account of the accumulation distribution determined for the taxable year.
              It should be noted that the credit under section 667 is computed by the use of a different ratio from that used for computing the amount of taxes deemed distributed under section 666(c).

              (b) Paragraph (a) of this section may be illustrated by the following examples:

                Example 1.
                In 1954, a trust of which A is the sole beneficiary has taxable income of $20,000 (including capital gains of $5,100 allocable to corpus less a personal exemption of $100), on which a tax of $7,260 is paid.
                The undistributed portion of distributable net income is $15,000, to which $6,160 of the tax is allocable under section 665. The undistributed net income is therefore $8,840 ($15,000 minus $6,160). In 1955, the trust makes an accumulation distribution of $8,840. Under section 666(b), the total taxes for 1954 attributable to the undistributed net income are deemed distributed, so $15,000 is deemed distributed. The amount of the tax which may not be refunded to the trust under section 667 and the credit to which A is entitled under section 668(b) is the excess of $6,160 over zero, since after the distribution and the application of subpart D there is no remaining undistributed portion of distributable net income for 1954.

                Example 2.
                The same trust as in example 1 of this paragraph distributes $5,000 in 1955, rather than $8,840. The amount of the tax which may not be refunded to the trust but which is available to A as a credit is $4,044, computed as follows:

                    Accumulation distribution in 1955
                    $5,000

                    Taxes deemed distributed under section 666(c) (5,000/8,840 × $6,160)
                    3,484

                    Total amount deemed distributed out of the undistributed portion of distributable net income
                    8,484

                    Tax attributable to the undistributed portion of distributable net income ($15,000) before 1955 distribution (see example 1 of this paragraph)
                    6,160

                    Tax on $11,516 (taxable income of $20,000 minus $8,484, amount deemed distributed)
                    $3,216

                    Tax on $5,000 (capital gains of $5,100, less personal exemption of $100, allocable to corpus)
                    1,100

                    Tax attributable to undistributed portion of distributable net income after 1955 distribution
                    2,116

                    Refund disallowed to the trust and credit available to A in 1955
                    4,044

              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6989, 34 FR 741, Jan. 17, 1969]

              § 1.667(a)-1A
              [Reserved]

              § 1.667(b)-1A
              Authorization of credit to beneficiary for taxes imposed on the trust.
              (a) Determination of credit—(1) In general. Section 667(b) allows under certain circumstances a credit (without interest) against the tax imposed by subtitle A of the Code on the beneficiary for the taxable year in which the accumulation distribution is required to be included in income under section 668(a). In the case of an accumulation distribution consisting only of undistributed net income, the amount of such credit is the total of the taxes deemed distributed to such beneficiary under section 666 (b) and (c) as a result of such accumulation distribution for preceding taxable years of the trust on the last day of which such beneficiary was in being, less the amount of such taxes for such preceding taxable years taken into account in reducing the amount of partial tax determined under § 1.668(b)-1A. In the case of an accumulation distribution consisting only of undistributed capital gain, the amount of such credit is the total of the taxes deemed distributed as a result of the accumulation distribution to such beneficiary under section 669 (d) and (e) for preceding taxable years of the trust on the last day of which such beneficiary was in being, less the amount of such taxes for such preceding taxable years taken into account in reducing the amount of partial tax determined under § 1.669(b)-1A. In the case of an accumulation distribution consisting of both undistributed net income and undistributed capital gain, a credit will not be available unless the total taxes deemed distributed to the beneficiary for all preceding taxable years as a result of the accumulation distribution exceeds the beneficiary's partial tax determined under §§ 1.668(b)-1A and 1.669(b)-1A without reference to the taxes deemed distributed. A credit is not allowed for any taxes deemed distributed as a result of an accumulation distribution to a beneficiary by reason of sections 666 (b) and (c) or sections 669 (d) and (e) for a preceding taxable year of the trust before the beneficiary was born or created. However, if as a result of an accumulation distribution the total taxes deemed distributed under sections 668(a)(2) and 668(a)(3) in preceding taxable years before the beneficiary was born or created exceed the partial taxes attributable to amounts deemed distributed in such years, such excess may be used to offset any liability for partial taxes attributable to amounts deemed distributed as a result of the same accumulation distribution in preceding taxable years after the beneficiary was born or created.
              (2) Exact method. In the case of the tax computed under the exact method provided in §§ 1.668(b)-1A(b) and 1.669(b)-1A(b), the credit allowed by this section is computed as follows:
              (i) Compute the total taxes deemed distributed under §§ 1.666(b)-1A and 1.666(c)-1A or §§ 1.669(d)-1A and 1.669(e)-1A, whichever are appropriate, for the preceding taxable years of the trust on the last day of which the beneficiary was in being.
              (ii) Compute the total of the amounts of tax determined under § 1.668(b)-1A(b)(1) or § 1.669(b)-1A(b) (1), whichever is appropriate, for the prior taxable years of the beneficiary in which he was in being.
              If the amount determined under subdivision (i) of this subparagraph does not exceed the amount determined under subdivision (ii) of this subparagraph, no credit is allowable. If the amount determined under subdivision (i) of this subparagraph exceeds the amount determined under subdivision (ii) of this subparagraph, the credit allowable is the lesser of the amount of such excess or the amount of taxes deemed distributed to the beneficiary for all preceding taxable years to the extent that such taxes are not used in § 1.668(b)-1A(b)(2) or § 1.669(b)-1A(b)(2) in determining the beneficiary's partial tax under section 668(a)(2) or 668(a)(3). The application of this subparagraph may be illustrated by the following example:

                Example.
                An accumulation distribution made in 1975 is deemed distribution in 1973 and 1974, years in which the beneficiary was in being. The taxes deemed distributed in such years are $4,000 and $2,000, respectively, totaling $6,000. The amounts of tax computed under § 1.668(b)-1A(b)(1) attributable to the amounts thrown back are $3,000 and $2,000, respectively, totaling $5,000. The credit allowable under this subparagraph is therefore $1,000 ($6,000 less $5,000).

              (3) Short-cut method. In the case of the tax computed under the short-cut method provided in § 1.668(b)-1A(c) or § 1.669(b)-1A(c), the credit allowed by this section is computed as follows:
              (i) Compute the total taxes deemed distributed in all preceding taxable years of the trust under §§ 1.666(b)-1A and 1.666(c)-1A or §§ 1.669(d)-1A and 1.669(e)-1A, whichever are appropriate.
              (ii) Compute the beneficiary's partial tax determined under either § 1.668(b)-1A(c)(1)(v) or § 1.669(b)-1A (c)(1)(v), whichever is appropriate.

              If the amount determined under subdivision (i) of this subparagraph does not exceed the amount determined under subdivision (ii) of this subparagraph, no credit is allowable. If the amount determined under subdivision (i) of this subparagraph exceeds the amount determined under subdivision (ii) of this subparagraph,
              (iii) Compute the total taxes deemed distributed under §§ 1.666(b)-1A and 1.666(c)-1A or §§ 1.669(d)-1A and 1.669(e)-1A, which are appropriate, for the preceding taxable years of the trust on the last day of which the beneficiary was in being.

              (iv) Multiply the amount by which subdivision (i) of this subparagraph exceeds subdivision (ii) of this subparagraph by a fraction, the numerator of which is the amount determined under subdivision (iii) of this subparagraph and the denominator of which is the amount determined under subdivision (i) of this subparagraph. The result is the allowable credit. The application of this subparagraph may be illustrated by the following example:

                Example.
                An accumulation distribution that consists only of undistributed net income is made in 1975. The taxes deemed distributed in the preceding years under §§ 1.666(b)-1A and 1.666(c)-1A are $15,000. The amount determined under § 1.668(b)-1A(c)(1)(v) is $12,000. The beneficiary was in being on the last day of all but one preceding taxable year in which the accumulation distribution was deemed made, and the taxes deemed distributed in those years was $10,000. Therefore, the excess of the subdivision (i) amount over the subdivision (ii) amount is $3,000, and is multiplied by 10,000/15,000, resulting in an answer of $2,000, which is the credit allowable when computed under the short-cut method.

              (b) Year of credit. The credit to which a beneficiary is entitled under this section is allowed for the taxable year in which the accumulation distribution (to which the credit relates) is required to be included in the income of the beneficiary under section 668(a). Any excess over the total tax liability of the beneficiary for such year is treated as an overpayment of tax by the beneficiary. See section 6401(b) and the regulations thereunder.
              [T.D. 7204, 37 FR 17147, Aug. 25, 1972]

              § 1.668(a)-1A
              Amounts treated as received in prior taxable years; inclusion in gross income.
              (a) Section 668(a) provides that the total of the amounts treated under sections 666 and 669 as having been distributed by the trust on the last day of a preceding taxable year of the trust shall be included in the income of the beneficiary or beneficiaries receiving them. The total of such amounts is includable in the income of each beneficiary to the extent the amounts would have been included under section 662 (a)(2) and (b) as if the total had actually been an amount properly paid by the trust under section 661 (a)(2) on the last day of such preceding taxable year. The total is included in the income of the beneficiary for the taxable year of the beneficiary in which such amounts are in fact paid, credited, or required to be distributed unless the taxable year of the beneficiary differs from the taxable year of the trust (see section 662(c) and the regulations thereunder). The character of the amounts treated as received by a beneficiary in prior taxable years, including taxes deemed distributed, in the hands of the beneficiary is determined by the rules set forth in section 662(b) and the regulations thereunder.
              (b) Any deduction allowed to the trust in computing distributable net income for a preceding taxable year (such as depreciation, depletion, etc.) is not deemed allocable to a beneficiary because of amounts included in a beneficiary's gross income under this section since the deduction has already been utilized in reducing the amount included in the beneficiary's income.

              (c) For purposes of applying section 668(a)(3), a trust shall be considered to be other than a “trust which is not required to distribute all of its income currently” for each taxable year prior to the first taxable year beginning after December 31, 1968, and ending after November 30, 1969, in which income is accumulated. Income will not be deemed to have been accumulated for purposes of applying section 668(a)(3) in a year if the trustee makes a determination, as evidenced by a statement on the return, to distribute all of the trust's income for such year and also makes a good faith determination as to the amount of such income and actually distributed for such year the entire amount so determined. The term “income,” as used in the preceding two sentences, is defined in §§ 1.643(b)-1 and 1.643(b)-2. Since, under such definitions, certain items may be included in distributable net income but are not, under applicable local law, “income” (as, for example, certain extraordinary dividends), a trust that has undistributed net income from such sources might still qualify as a trust that has not accumulated income. Also, for example, if a trust establishes a reserve for depreciation or depletion and applicable local law permits the deduction for such reserve in the computation of “income,” amounts so added to the reserve do not constitute an accumulation of income. If a trust has separate shares, and any share accumulates income, all shares of the trust will be considered to have accumulated income for purposes of section 668(a)(3). Amounts retained by a trust or a portion of a trust that is subject to subpart E (sections 671-678) shall not be considered accumulated income.
              (d) See section 1302(a)(2)(B) to the effect that amounts included in the income of a beneficiary of a trust under section 668(a) are not eligible for income averaging.
              [T.D. 7204, 37 FR 17148, Aug. 25, 1972]

              § 1.668(a)-2A
              Allocation among beneficiaries; in general.

              The portion of the total amount includible in income under § 1.668(a)-1A which is includible in the income of a particular beneficiary is based upon the ratio determined under the second sentence of section 662(a)(2) for the taxable year (and not for the preceding taxable year). This section may be illustrated by the following example:

                Example.
                (a) Under the terms of a trust instrument, the trustee may accumulate the income or make distributions to A and B. The trustee may also invade corpus for the benefit of A and B. The distributable net income of the trust for taxable year 1975 is $10,000. The trust had undistributed net income for taxable year 1973, the first year of the trust, of $5,000, to which a tax of $1,100 was allocable. On May 1, 1975, the trustee distributes $10,000 to A, and on November 29, 1975, he distributes $5,000 to B. Thus, of the total distribution of $15,000, A received two-thirds and B receives one-third.
                (b) For the purposes of determining the amounts includible in the beneficiaries' gross income for 1975, the trust is deemed to have made the following distributions:

                    Amount distributed out of 1975 income (distributable net income)
                    $10,000

                    Accumulation distribution deemed distributed by the trust on the last day of 1973 under section 666(a)
                    5,000

                    Taxes imposed on the trust attributable to the undistributed net income deemed distributed under section 666(b)
                    1,100

                (c) A will include in his income for 1975 two-thirds of each item shown in paragraph (b) of this example. Thus, he will include in gross income $6,666.67 (10,000/15,000 × $10,000) of the 1975 distributable net income of the trust as provided in section 662(a)(2) (which is not an amount includable in his income under § 1.668(a)-1A(a)). He will include in his income $3,333.33 (10,000/15,000 × $5,000) of the accumulation distribution and $733.33 (10,000/15,000 × $1,100) of the taxes imposed on the trust, as provided in section 668(a).
                (d) B will include in his income for 1975 one-third of each item shown in paragraph (b) of this example, computed in the manner shown in paragraph (c) of this example.
                (e) To the extent the total accumulation distribution consists of undistributed net income and undistributed capital gain, A and B shall be treated as receiving a pro rata share of each for the preceding taxable year 1973.

              [T.D. 7204, 37 FR 17148, Aug. 25, 1972]

              § 1.668(a)-3A
              Determination of tax.
              In a taxable year in which an amount is included in a beneficiary's income under § 1.668(a)-1A(a), the tax on the beneficiary for such taxable year is determined only as provided in section 668 and consists of the sum of:
              (a) A partial tax computed on (1) the beneficiary's taxable income reduced by (2) an amount equal to the total amounts includible in his income under § 1.668(a)-1A(a), at the rate and in the manner as if section 668 had not been enacted,
              (b) A partial tax determined as provided in § 1.668(b)-1A, and
              (c) In the case of a beneficiary of a trust which is not required to distribute all of its income currently, a partial tax determined as provided in § 1.669(b)-1A.
              [T.D. 7204, 37 FR 17148, Aug. 25, 1972]

              § 1.668(b)-1A
              Tax on distribution.
              (a) In general. The partial tax imposed on the beneficiary by section 668(a)(2) shall be the lesser of:
              (1) The tax computed under paragraph (b) of this section (the “exact” method), or

              (2) The tax computed under paragraph (c) of this section (the “short-cut” method),

              except as provided in § 1.668(b)-4A (relating to failure to furnish proper information) and paragraph (d) of this section (relating to disallowance of short-cut method). For purposes of this paragraph, the method used in the return shall be accepted as the method that produces the lesser tax. The beneficiary's choice of the two methods is not dependent upon the method that he uses to compute his partial tax imposed by section 668(a)(3).
              (b) Computation of partial tax by the exact method. The partial tax referred to in paragraph (a)(1) of this section is computed as follows:
              (1) First, compute the tax attributable to the section 666 amounts for each of the preceding taxable years. For purposes of this paragraph, the “section 666 amounts” for a preceding taxable year are the amounts deemed distributed under section 666(a) on the last day of the preceding taxable year, plus the amount of taxes deemed distributed on such day under section 666 (b) or (c). The tax attributable to such amounts in each prior taxable year of the beneficiary is the difference between the tax for such year computed with the inclusion of the section 666 amounts in the beneficiary's gross income and the tax for such year computed without including them in such gross income. Tax computations for each such year shall reflect a taxpayer's marital, dependency, exemption, and filing status for such year. To the extent the undistributed net income of a trust deemed distributed in an accumulation distribution includes amounts received as an accumulation distribution from another trust, for purposes of this paragraph they shall be considered as amounts deemed distributed by the trust under section 666(a) on the last day of each of the preceding taxable years in which such amounts were accumulated by such other trust. For example, assume trust Z, a calendar year trust, received in its taxable year 1975 an accumulation distribution from trust Y, a calendar year trust, that included undistributed net income and taxes of trust Y for the taxable years 1972, 1973, and 1974. To the extent an accumulation distribution made by trust Z in its taxable year 1976 includes such undistributed net income and taxes, it shall be considered an accumulation distribution by trust Z in the taxable year 1976 and under section 666(a) will be deemed distributed on the last day of the preceding taxable years 1972, 1973, and 1974.
              (2) From the sum of the taxes for the prior taxable years attributable to the section 666 amounts (computed in accordance with subparagraph (1) of this paragraph), subtract so much of the amount of taxes deemed distributed to the beneficiary under §§ 1.666(b)-1A and 1.666(c)-1A as does not exceed such sum. The resulting amount, if any, is the partial tax, computed under the exact method, for the taxable year in which the accumulation distribution is paid, credited, or required to be distributed to the beneficiary.

              (3) The provisions of this paragraph may be illustrated by the following example:

                Example.
                (i) Assume that in 1979 a trust makes an accumulation distribution of $15,000 to A. The accumulation distribution is allocated under section 666(a) in the amounts of $5,000 to 1971, $4,000 to 1972, and $6,000 to 1973. Under section 666 (b) and (c), taxes in the amounts of $935, $715, and $1,155 (totaling $2,805) are deemed distributed in 1971, 1972, and 1973, respectively.
                (ii) A, the beneficiary, had taxable income and paid income tax in 1971-73 as follows:

                    Year
                    Taxable income
                    Tax

                    1971
                    $10,000
                    $2,190

                    1972
                    12,000
                    2,830

                    1973
                    14,000
                    3,550

                (iii) Taxes attributable to the section 666 amounts (paragraph (i) of this example) are $6,979, computed as follows:

                    1971

                    Taxable income including section 666 amounts ($10,000 + $5,000 + $935)
                    $15,935

                    Tax on $15,935
                    $4,305

                    Less: Tax paid by A in 1971
                    2,190

                    Tax attributable to 1971 section 666 amounts
                    2,115

                    1972

                    Taxable income including section 666 amounts ($12,000 + $4,000 + $715)
                    $16,715

                    Tax on $16,715
                    $4,620

                    Less: Tax paid by A in 1972
                    2,830

                    Tax attributable to 1972 section 666 amounts
                    1,790

                    1973

                    Taxable income including section 666 amounts ($14,000 + $6,000 + $1,155)
                    $21,155

                    Tax on $21,155
                    $6,624

                    Less: Tax paid by A in 1973
                    3,550

                    Tax attributable to 1973 section 666 amounts
                    3,074

                    Total tax attributable to section 666 amounts:

                    1971
                    $2,115

                    1972
                    1,790

                    1973
                    3,074

                    Total
                    6,979

                (iv) The partial tax computed under the exact method is $4,174, computed by subtracting the taxes deemed distributed ($2,805) from the tax attributable to the section 666 amounts ($6,979).

              (c) Computation of tax by the short- cut method. (1) The tax referred to in paragraph (a)(2) of this section is computed as follows:

              (i) First, determine the number of preceding taxable years of the trust on the last day of which an amount is deemed under section 666(a) to have been distributed. For purposes of the preceding sentence, the preceding taxable years of a trust that has received an accumulation distribution from another trust shall include the taxable years of such other trust in which an amount was deemed distributed in such accumulation distribution. For example, assume trust Z, a calendar year trust, received in its taxable year 1975 an accumulation distribution from trust Y, a calendar year trust, that included undistributed net income of trust Y for the taxable years 1972, 1973, and 1974. To the extent an accumulation distribution made by trust Z in its taxable year 1976 includes such undistributed net income, it shall be considered an accumulation distribution by trust Z in the taxable year 1976 and under section 666(a) will be deemed distributed on the last day of the preceding taxable years 1972, 1973, and 1974. For purposes of this subparagraph, such number of preceding taxable years of the trust shall not include any preceding taxable year of the trust in which the undistributed net income deemed distributed is less than 25 percent of (a) the total amounts deemed under section 666(a) to be undistributed net income from preceding taxable years divided by (b) the number of such preceding taxable years of the trust on the last day of which an amount is deemed under section 666(a) to have been distributed without application of this sentence. For example, assume that an accumulation distribution of $90,000 made to a beneficiary in 1979 is deemed distributed in the amounts of $29,000 in each of the years 1972, 1973, and 1974, and $3,000 in 1975. The number of preceding taxable years on the last day of which an amount was deemed distributed without reference to the second sentence of this subparagraph is four. However, the distribution deemed made in 1975 ($3,000) is less than $5,625, which is 25 percent of (a) the total undistributed net income deemed distributed under section 666(a) ($90,000) divided by (b) the number of such preceding taxable years (4), or $22,500. Therefore, for purposes of this subparagraph the accumulation distribution is deemed distributed in only 3 preceding taxable years (1972, 1973, and 1974).
              (ii) Second, divide the amount (representing the accumulation distribution and taxes deemed distributed) required under section 668(a) to be included in the income of the beneficiary for the taxable year by the number of preceding taxable years of the trust on the last day of which an amount is deemed under section 666(a) to have been distributed (determined as provided in subdivision (i) of this subparagraph). The amount determined under this subdivision, including taxes deemed distributed, consists of the same proportion of each class of income as the total of each class of income deemed distributed in the accumulation distribution bears to the total undistributed net income from such preceding taxable years deemed distributed in the accumulation distribution. For example, assume that an amount of $50,000 is deemed distributed under section 666(a) from undistributed net income of 5 preceding taxable years of the trust, and consists of $25,000 of interest, $15,000 of dividends, and $10,000 of net rental income. Taxes attributable to such amounts in the amount of $10,000 are also deemed distributed. The amount determined under this subdivision, $12,000 ($50,000 income plus $10,000 tax divided by 5 years), is deemed to consist of $6,000 in interest, $3,600 in dividends, and $2,400 in net rental income.

              (iii) Third, compute the tax of the beneficiary for each of the 3 taxable years immediately preceding the year in which the accumulation distribution is paid, credited, or required to be distributed to him,
              (a) With the inclusion in gross income of the beneficiary for each of such 3 years of the amount determined under subdivision (ii) of this subparagraph, and
              (b) Without such inclusion.

              The difference between the amount of tax computed under (a) of this subdivision for each year and the amount computed under (b) of this subdivision for that year is the additional tax resulting from the inclusion in gross income for that year of the amount determined under subdivision (ii) of this subparagraph. For example, assume that a distribution of $12,000, is includible in the income of each of the beneficiary's 3 preceding taxable years when his income (without the inclusion of the accumulation distribution) was $20,000, $30,000, and $40,000. The inclusion of $12,000 in income would produce taxable income of $32,000, $42,000, and $52,000, and the tax attributable to such increases would be $4,000, $5,000, and $6,000, respectively.
              (iv) Fourth, add the additional taxes resulting from the application of subdivision (iii) of this subparagraph and then divide this amount by 3. For example, if these additional taxes are $4,000, $5,000, and $6,000 for the 3 preceding taxable years, this amount would be $5,000 ($4,000 + $5,000 + $6,000 divided by 3).
              (v) Fifth, the resulting amount is then multiplied by the number of preceding taxable years of the trust on the last day of which an amount is deemed under section 666(a) to have been distributed (previously determined under subdivision (i) of this subparagraph). For example, if an amount is deemed distributed for 5 preceding taxable years, the resulting amount would be five times the $5,000 amount.
              (vi) Sixth, the resulting amount, less so much of the amount of taxes deemed distributed to the beneficiary under §§ 1.666(b)-1A and 1.666(c)-1A as does not exceed such resulting amount, is the tax under the short-cut method provided in section 668(b)(1)(B).

              (2) The computation of the tax by the short-cut method may be illustrated by the following example:

                Example.
                In 1971, X creates a trust which is to accumulate its income and pay the income to Y when Y reaches 30. Y is 19. Over the 11 years of the trust, the trust earns $1,200 of interest income annually and has expenses each year of $100 allocable to the production of income. The trust pays a total tax of $1,450 on the accumulated income. In 1981, when Y reaches 30, the $9,550 of accumulated undistributed net income and the $1,100 of current net income are distributed to Y. Y is treated as having received a total distribution of $11,000 (the $9,550 accumulation distribution plus the taxes paid by the trust which are deemed to have been distributed to Y). The income of the current year (1981) is taxed directly to Y. The computation is as follows: $11,000 (accumulation distribution plus taxes) divided by 10 (number of years out of which distribution was made) equals $1,100. The $1,100 added to the income of the beneficiary's preceding 3 years produces increases in tax as follows:

                    1980
                    $350

                    1979
                    300

                    1978
                    250

                    Total
                    900

                $900 (total additional tax) divided by 3 equals $300 (average annual increase in tax). $300 (average annual increase in tax) times 10 equals $3,000, from which is deducted the amount of taxes ($1,450) paid by the trust attributable to the undistributed net income deemed distributed. The amount of tax to be paid currently under the short-cut method is therefore $1,550.

              (d) Disallowance of short-cut method. If, in any prior taxable year of the beneficiary in which any part of the accumulation distribution of undistributed net income is deemed to have been distributed under section 666(a) to such beneficiary, any part of prior accumulation distributions of undistributed net income by each of two or more other trusts is deemed under section 666(a) to have been distributed to such beneficiary, then the short-cut method under paragraph (c) of this section may not be used and the partial tax imposed by section 668(a)(2) shall be computed only under the exact method under paragraph (b) of this section. For example, assume that, in 1978, trust X makes an accumulation distribution of undistributed net income to A, who is on the calendar year basis, and part of the accumulation distribution is deemed under section 666(a) to have been distributed on March 31, 1974. In 1977, A had received an accumulation distribution of undistributed net income from both trust Y and trust Z. Part of the accumulation distribution from trust Y was deemed under section 666(a) to have been distributed to A on June 30, 1974, and part of the accumulation distribution from trust Z was deemed under section 666(a) to have been distributed to A on December 31, 1974. Because there were portions of accumulation distributions of undistributed net income from two other trusts deemed distributed within the same prior taxable year of A (1974), the 1978 accumulation distribution from trust X may not be computed under the short-cut method provided in paragraph (c) of this section. Therefore the exact method under paragraph (b) of this section must be used to compute the tax imposed by section 666(a)(2).
              [T.D. 7204, 37 FR 17149, Aug. 25, 1972]

              § 1.668(b)-2A
              Special rules applicable to section 668.
              (a) Rule when beneficiary not in existence on the last day of a taxable year. If a beneficiary was not in existence on the last day of a preceding taxable year of the trust with respect to which a distribution is deemed made under section 666(a), it shall be assumed, for purposes of the computations under paragraphs (b) and (c) of § 1.668(b)-1A, that the beneficiary:
              (1) Was in existence on such last day,
              (2) Was a calendar year taxpayer,
              (3) Had no gross income other than the amounts deemed distributed to him from such trust in his calendar year in which such last day occurred and from all other trusts from which amounts are deemed to have been distributed to him in such calendar year,
              (4) If an individual, was unmarried and had no dependents,
              (5) Had no deductions other than the standard deduction, if applicable, under section 141 for such calendar year, and
              (6) Was entitled to the personal exemption under section 151 or 642(b).
              For example, assume that part of an accumulation distribution made in 1980 is deemed under section 666(a) to have been distributed to the beneficiary, A, in 1973; $10,000 of a prior accumulation distribution was deemed distributed in 1973. A was born on October 9, 1975. It will be assumed for purposes of § 1.668(b)-1A that A was alive in 1973, was on the calendar year basis, had no income other than (i) the $10,000 from the earlier accumulation distribution deemed distributed in 1973, and (ii) the part of the 1980 distribution deemed distributed in 1973, and had no deductions other than the personal exemption provided in section 151. It should be noted that the standard deduction for 1973 will be available to A with respect to the distribution only to the extent it qualifies as “earned income” in the hands of the trust. See section 141(e) and the regulations thereunder and § 1.652(b)-1. If A were a trust or estate created after 1973, the same assumptions would apply, except that the trust or estate would not be entitled to the standard deduction and would receive the personal exemption provided under section 642(b) in the same manner as allowed under such section for A's first actual taxable year.
              (b) Effect of other distributions. The income of the beneficiary, for any of his prior taxable years for which a tax is being recomputed under § 1.668(b)-1A, shall include any amounts of prior accumulation distributions (including prior capital gain distributions) deemed distributed under sections 666 and 669 in such prior taxable year. For purposes of the preceding sentence, a “prior accumulation distribution” is a distribution from the same or another trust which was paid, credited, or required to be distributed in a prior taxable year of the beneficiary. The term “prior accumulation distribution” also includes accumulation distributions of other trusts which were paid, credited, or required to be distributed to the beneficiary in the same taxable year and which the beneficiary has determined under paragraph (c) of this section to treat as having been distributed before the accumulation distribution for which tax is being computed under § 1.668(b)-1A. Any capital gain distribution from the same trust paid, credited, or required to be distributed in the same taxable year of the beneficiary shall not be considered under this paragraph to be a “prior capital gain distribution.”
              (c) Multiple distributions in the same taxable year. For purposes of paragraph (b) of this section, accumulation distributions made from more than one trust in the same taxable year of the beneficiary, regardless of when in the taxable year they were actually made, shall be treated as having been made consecutively, in whichever order the beneficiary may determine. However, the beneficiary must treat them as having been made in the same order for the purpose of computing the partial tax on the several accumulation distributions. The beneficiary shall indicate the order he has determined to deem the accumulation distributions to have been received by him on his return for the taxable year. A failure by him so to indicate, however, shall not affect his right to make such determination. The purpose of this rule is to assure that the tax resulting from the later (as so deemed under this paragraph) distribution is computed with the inclusion of the earlier distribution in the taxable base and that the tax resulting from the earlier (as so deemed under this paragraph) distribution is computed with the later distribution excluded from the taxable base.
              (d) Examples. The provisions of paragraphs (b) and (c) of this section may be illustrated by the following examples:

                Example 1.
                In 1978, trust X made an accumulation distribution of undistributed net income to A, a calendar year taxpayer, of which $3,000 was deemed to have been distributed in 1974. In 1980, trust X makes another accumulation distribution of undistributed net income to A, $10,000 of which is deemed under section 666 to have been distributed in 1974. Also in 1980, trust Y makes an accumulation distribution of undistributed net income to A, of which $5,000 is deemed under section 666 to have been distributed in 1974. A determines to treat the 1980 distribution from trust Y as having been made prior to the 1980 distribution from trust X. In computing the tax on the 1980 trust Y distribution, A's gross income for 1974 includes (i) the $3,000 deemed distributed from the 1978 distribution, and (ii) the $5,000 deemed distributed in 1974 from the 1980 trust Y accumulation distribution. To compute A's tax under the exact method for 1974 on the $10,000 from the 1980 trust X accumulation distribution deemed distributed in 1974, A's gross income for 1974 includes (i) the $10,000, (ii) the $3,000 previously deemed distributed in 1974 from the 1978 trust X accumulation distribution, and (iii) the $5,000 deemed distribution in 1974 from the 1980 trust Y accumulation distribution.

                Example 2.
                In 1978, trust T makes an accumulation distribution of undistributed net income to B, a calendar year taxpayer. Determination of the tax on the accumulation distribution under the short-cut method requires the use of B's gross income for 1975, 1976, and 1977. In 1977, B received an accumulation distribution of undistributed net income from trust U, of which $2,000 was deemed to have been distributed in 1975, and $3,000 in 1976. B's gross income for 1975, for purposes of using the short-cut method to determine the tax from the trust T accumulation distribution, will be deemed to include the $2,000 deemed distributed in 1975 by trust U, and his gross income for 1976 will be deemed to include the $3,000 deemed distributed by trust U in 1976.

              [T.D. 7204, 37 FR 17151, Aug. 25, 1972]

              § 1.668(b)-3A
              Computation of the beneficiary's income and tax for a prior taxable year.
              (a) Basis for computation. (1) The beneficiary's income and tax paid for any prior taxable year for which a recomputation is involved under either the exact method or the short-cut method shall be determined by reference to the information required to be furnished by him under § 1.668(b)-4A(a). The gross income, related deductions, and taxes paid for a prior taxable year of the beneficiary as finally determined shall be used for computation purposes. The term “as finally determined” has reference to the final status of the gross income, deductions, credits, and taxes of the taxable year after the expiration of the period of limitations or after completion of any court action regarding the tax for the taxable year.

              (2) If any computations rely on the beneficiary's return for a prior taxable year for which the applicable period of limitations on assessment under section 6501 has expired, and such return shows a mathematical error on its face which resulted in the wrong amount of tax being paid for such year, the determination of both the tax for such year computed with the inclusion of the section 666 amount in the beneficiary's gross income and the tax for such year computed without including such amounts in such gross income shall be based upon the return after the correction of such mathematical errors, and the beneficiary shall be credited for the correct amount of tax that should have been properly paid.
              (b) Effect of allocation of undistributed net income on items based on amount of income and with respect to a net operating loss, a charitable contributions carryover, or a capital loss carryover. (1) In computing the tax for any taxable year under either the exact method or the short-cut method, any item which depends upon the amount of gross income, adjusted gross income, or taxable income shall be recomputed to take into consideration the amount of undistributed net income allocated to such year. For example, if $1,000 of undistributed net income is allocated to 1970, adjusted gross income for 1970 is increased from $5,000 to $6,000. The allowable 50 percent charitable deduction under section 170(b)(1)(A) is then increased and the amount of the nondeductible medical expenses under section 213 (3 percent of adjusted gross income) is also increased.

              (2) In computing the tax attributable to the undistributed net income deemed distributed to the beneficiary in any of his prior taxable years under either the exact method or the short-cut method, the effect of amounts of undistributed net income on a net operating loss carryback or carryover, a charitable contributions carryover, or a capital loss carryback or carryover, shall be taken into account. In determining the amount of tax attributable to such deemed distribution, a computation shall also be made for any taxable year which is affected by a net operating loss carryback or carryover, by a charitable contributions carryover, or by a capital loss carryback or carryover determined by reference to the taxable year to which amounts are allocated under either method and which carryback or carryover is reduced or increased by such amounts so allocated. The provisions of this subparagraph may be illustrated by the following example:

                Example.
                In 1978, a trust makes an accumulation distribution of undistributed net income to X of $50,000 that is deemed under section 666(a) to have been distributed in 1972. X had income in 1972, 1973, and 1973, and had a net operating loss in 1975 that offset his taxable income (computed as provided in § 1.172-5) for those years, as follows:

                    Year
                    Actual income (or loss)
                    Income after net operating loss carryback (n.o.l.c.b.)

                    1972
                    $10,000
                    $0

                    1973
                    50,000
                    0

                    1974
                    50,000
                    10,000

                    1975
                    (100,000)
                    0

                As a result of the allocation of the 1973 accumulation distribution to 1972, X's income for 1972, 1973, 1974, and 1975, after taking into account the 1975 n.o.l.c.b., is deemed to be as follows:

                    Year
                    Income deemed to have been earned after consideration of n.o.l.c.b., and accumulation distribution

                    1972
                    0 ($10,000 + $50,000−$60,000 n.o.l.c.b.).

                    1973
                    $10,000 ($50,000−$40,000 balance of n.o.l.c.b.).

                    1974
                    $50,000.

                    1975
                    0.

                Therefore, the tax on the 1978 accumulation distribution to X is the tax X would have paid in 1973 and 1974 had he had the above income in such years.

              (c) Averaging. A beneficiary who uses the exact method may recompute his tax for a prior taxable year by using income averaging for all of his actual income for that year, plus the amount deemed distributed in that year under section 666, even though he may not have actually used section 1301 to determine his income tax for such taxable year. For purposes of such recomputation, the beneficiary's income for all other taxable years involved must include any amounts deemed distributed in such years from the current and all prior accumulation distributions. See § 1.668(b)-4A(c)(3) for additional information requirements. The beneficiary may not apply the provisions of this paragraph to a taxable year in which an amount is deemed to be income by reason of § 1.666(d)-1A(b). The accumulation distribution itself is not eligible for income averaging in the years in which it is paid, credited, or required to be distributed. See section 1302 (a)(2)(B) and the regulations thereunder.
              [T.D. 7204, 37 FR 17151, Aug. 25, 1972]

              § 1.668(b)-4A
              Information requirements with respect to beneficiary.
              (a) Information to be supplied by beneficiary—(1) In general. The beneficiary must supply the information required by subparagraph (3) of this paragraph for any prior taxable year for which a recomputation is required under either the exact method or the short-cut method. Such information shall be filed with the beneficiary's return for the year in which the tax under section 668(a)(2) is imposed.
              (2) Failure to furnish. If the beneficiary fails to furnish the information required by this paragraph for any prior year involved in the exact method, he may not use such method and the tax computed under paragraph (c) of § 1.668(b)-1A (the short-cut method) shall be deemed to be the amount of partial tax imposed by section 668(a)(2). See, however, paragraph (b) of this section for an exception to this rule where the short-cut method is not permitted. If he cannot furnish the information required for a prior year involved in the short-cut method, such year will be recomputed on the basis of the best information available.
              (3) Information required. The beneficiary shall file the following items with his income tax return for the taxable year in which the accumulation distribution is included in income:
              (i) A statement showing the gross income, adjustments, deductions, credits, taxes paid, and computations for each of his taxable years for which a computation is required under the method by which he computes his partial tax imposed by section 668(a)(2). Such statement shall include such amounts for the taxable year as adjusted by any events subsequent to such year, such as any adjustment resulting from the determination of a deficiency or an overpayment, or from a court action regarding the tax.
              (ii) A copy of the statement required by this subparagraph to be furnished by the beneficiary for any prior taxable year in which an accumulation distribution was received by him which was also deemed distributed in whole or in part in the prior taxable year for which the statement under subdivision (i) of this subparagraph is required.
              (iii) A copy of any statements furnished the beneficiary by the trustee (such as schedules E and J of Form 1041, etc.) with regard to the current taxable year or any prior taxable year for which a statement is furnished under subdivision (i) of this subparagraph.
              (b) Exception. If by reason of § 1.668(b)-1A(e) the beneficiary may not compute the partial tax on the accumulation distribution under § 1.668(b)-1A(c) (the short-cut method), the provisions of subparagraph (2) of paragraph (a) of this section shall not apply. In such case, if the beneficiary fails to provide the information required by subparagraph (3) of paragraph (a) of this section for any prior taxable year, the district director shall, by utilizing whatever information is available to him (including information supplied by the beneficiary), determine the beneficiary's income and related expenses for such prior taxable year.
              (c) Records to be supplied by the beneficiary—(1) Year when return was filed. If the beneficiary filed an income tax return for a taxable year for which a recomputation is necessary, and the period of limitations on assessment under section 6501 for such year has expired as of the filing of the return for the year in which the accumulation distribution was made, then a copy of such return, plus proof of any changes of liability for such year due to the determination of a deficiency or an overpayment, court action, etc., shall, to the extent they verify the statements required under paragraph (a) of this section, serve as proof of such statements. If the period of limitations on assessment under section 6501 for a prior taxable year has not expired as of the filing of the beneficiary's return for the year in which the accumulation distribution was received, then the records required by section 6001 to be retained by the beneficiary for such prior taxable year shall serve as the basis of proof of the statements required to be filed under paragraph (a) of this section.
              (2) Year for which no return was filed. If the beneficiary did not file a return for a taxable year for which a recomputation is necessary, he shall be deemed to have had in such year, in the absence of proof to the contrary, gross income in the amount equal to the maximum amount of gross income that he could have received without having had to file a return under section 6012 for such year.
              (3) Distributions deemed averaged. In order for a beneficiary to use income averaging with respect to a prior taxable year (see § 1.668(b)-3A(c)), he must furnish all the information that would support the computation under section 1301 as if the distribution were actually received and averaged in such prior taxable year, even if a portion of the information relates to years in which no amount was deemed distributed to the beneficiary.
              [T.D. 7204, 37 FR 17152, Aug. 25, 1972]

              § 1.668(a)-1
              Amounts treated as received in prior taxable years; inclusion in gross income.
              (a) Section 668(a) provides that the total of the amounts treated under section 666 as having been distributed by the trust on the last day of a preceding taxable year of the trust shall be included in the gross income of the beneficiary or beneficiaries receiving them. The total of such amounts is includible in the gross income of each beneficiary to the extent the amounts would have been included under section 662 (a)(2) and (b) if the total had actually been paid by the trust on the last day of such preceding taxable year. The total is included in the gross income of the beneficiary for the taxable year of the beneficiary in which such amounts are in fact paid, credited, or required to be distributed unless the taxable year of the beneficiary differs from the taxable year of the trust (see section 662(c) and the regulations thereunder). The character of the amounts treated as received by a beneficiary in prior taxable years, including taxes deemed distributed, in the hands of the beneficiary is determined by the rules set forth in section 662(b) and the regulations thereunder. See paragraphs (h)(1)(ii) and (j)(1)(ii) of § 1.668(b)-2.
              (b) The total of the amounts treated under section 666 as having been distributed by the trust on the last day of a preceding taxable year of the trust are included as prescribed in paragraph (a) of this section in the gross income of the beneficiary even though as of that day the beneficiary would not have been entitled to receive them had they actually been distributed on that day.
              (c) Any deduction allowed to the trust in computing distributable net income for a preceding taxable year (such as depreciation, depletion, etc.) is not deemed allocable to a beneficiary because of amounts included in a beneficiary's gross income under this section since the deduction has already been utilized in reducing the amount included in the beneficiary's income.

              § 1.668(a)-2
              Allocation among beneficiaries; in general.

              The portion of the total amount includible in gross income under § 1.668 (a)-1 which is includible in the gross income of a particular beneficiary is based upon the ratio determined under the second sentence of section 662(a)(2) for the taxable year (and not for the preceding taxable year). This section may be illustrated by the following example:

                Example.
                (a) Under the terms of a trust instrument, the trustee may accumulate the income or make distributions to A and B. The trustee may also invade corpus for the benefit of A and B. The distributable net income of the trust for the taxable year 1955 is $10,000. The trust had undistributed net income for the taxable year 1954 of $5,000, to which a tax of $1,100 was allocable. During the taxable year 1955, the trustee distributes $10,000 to A and $5,000 to B. Thus, of the total distribution of $15,000, A received two-thirds and B received one-third.
                (b) For the purposes of determining the amounts includible in the beneficiaries' gross income for 1955, the trust is deemed to have made the following distributions:

                    Amount distributed out of 1955 income (distributable net income)
                    $10,000

                    Accumulation distribution deemed distributed by the trust on the last day of 1954 under section 666(a)
                    5,000

                    Taxes imposed on the trust deemed distributed under section 666(b)
                    1,100

                (c) A will include in his gross income for 1955 two-thirds of each item shown in paragraph (b) of this example. Thus, he will include in gross income $6,666.67 (10,000/ 15,000 × $10,000) of the 1955 distributable net income of the trust as provided in section 662(a)(2), and $3,333.33 (10,000/ 15,000 × $5,000) of the accumulation distribution and $733.33 (10,000/15,000 × $1,100) of the taxes imposed on the trust as provided in section 668(a).
                (d) B will include in his gross income for 1955 one-third of each item shown in paragraph (b) of this example, computed in the manner shown in paragraph (c) of this example.

              § 1.668(a)-3
              Excluded amounts.

              When a trust pays, credits, or is required to distribute to a beneficiary amounts which are excluded under section 665(b) (1), (2), (3), or (4) from the computation of an accumulation distribution, the amount includible under subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code, in the gross income of the beneficiaries pursuant to § 1.668(a)-1 is first allocated to the beneficiaries as provided in § 1.668(a)-2 and, second, the amount allocable to the beneficiary receiving amounts which are excluded under section 665(b) (1), (2), (3), or (4) is reduced by the excluded amounts. This section may be illustrated by the following examples, in which it is assumed the trusts and beneficiaries report on the calendar year basis and the income of the trusts was derived entirely from taxable interest:

                Example 1.
                (a) A trust in 1957 has income as defined in section 643(b) of $35,000 and expenses allocable to corpus of $5,000. Its distributable net income is, therefore, $30,000 ($35,000−$5,000). The undistributed net income of the trust and the taxes imposed on the trust were $12,840 and $7,260, respectively, for each of the years 1956, 1955, and 1954. The terms of the trust instrument provide for the accumulation of income during the minority of beneficiaries A and B. However, the trustee may make discretionary distributions to either beneficiary after he becomes 21 years of age. Also, the trustee may invade corpus for the benefit of A and B. B became 21 years of age on January 1, 1957, and, as of that date, A was 25 years old. The trustee distributed $50,000 each to A and B during 1957.
                (b) Since each beneficiary received one-half of the total amount distributed by the trust, each must include in gross income under section 662(a)(2) one-half ($15,000) of the distributable net income ($30,000) of the trust for 1957.
                (c) The excess distribution of $35,000 ($50,000−$15,000) received by B is excluded from the determination of an accumulation distribution under section 665(b)(1) and accordingly is not includible in B's gross income under section 668(a). Nor is such amount treated as an accumulation distribution for the purpose of determining the amount includible in A's gross income under section 668(a).
                (d) The accumulation distribution of the trust is $35,000, computed as follows:

                    Total distribution by the trust

                    $100,000

                    Less:

                    Distributable net income for 1957
                    $30,000

                    Excess distribution to B
                    35,000

                    65,000

                    Accumulation distribution to A
                    35,000

                (e) The accumulation distribution of $35,000 will be allocated to the preceding taxable years 1956, 1955, and 1954, and the trust will be deemed to have made the following distributions to A on the last day of those years:

                    1956
                    1955
                    1954
                    Total

                    Undistributed net income
                    $12,840
                    $12,840
                    $9,320
                    $35,000

                    Taxes imposed on the trust
                    7,260
                    7,260
                    5,270
                    19,790

                    Total
                    20,100
                    20,100
                    14,590
                    54,790

                Thus, A will include $54,790 in his gross income for 1957 under section 668(a). A will, however, receive credit against his tax under section 668(b).

                Example 2.
                (a) Under the terms of a trust the trustee may make discretionary distributions out of income to A during her life. The balance of the income is to be accumulated during the minority of her son, B, and is to be distributed to him when he becomes 21 years of age. Thereafter the trustee may also make discretionary payments of income to B. Also, the trustee may invade corpus for the benefit of A and B. B became 21 years of age on December 31, 1955. The distributable net income of the trust for 1955 is $30,000. It had undistributed net income of $12,840 for the preceding taxable year 1954 and the taxes imposed on the trust for such year were $7,260. The trustee distributed $15,000 to A during 1955 and on December 31, 1955, he distributed $60,000 to B, which represented income accumulated during his minority.
                (b) Since B received four-fifths of the total amount ($75,000) distributed by the trust during 1955, he must include in his gross income under section 662(a)(2) four-fifths ($24,000) of the distributable net income ($30,000) of the trust for 1955. A will include in her gross income under section 662(a)(2) one-fifth ($6,000) of the distributable net income ($30,000) of the trust for 1955.
                (c) The excess distribution of $36,000 ($60,000−$24,000) received by B is excluded from the determination of an accumulation distribution under section 665(b)(1) and accordingly is not includible in his gross income under section 668(a).
                (d) The amount treated as an accumulation distribution for the purpose of determining the amount includible in A's gross income for 1955 under section 668(a) is $9,000, computed as follows:

                    Total distribution by the trust

                    $75,000

                    Less:

                    Distributable net income for 1955
                    $30,000

                    Excess distribution to B
                    36,000

                    66,000

                    Amount treated as an accumulation distribution
                    9,000

                (e) Inasmuch as the amount of $9,000 is less than the total undistributed net income of the trust ($12,840) for the preceding taxable year 1954, a pro rata portion of the taxes imposed on the trust for that year are also deemed distributed by the trust. Thus, A will include $14,089 in her gross income for 1955 under section 668 (a) computed as follows:

                      1954

                    Accumulation distribution
                    $9,000

                    Taxes imposed on the trust (9,000/ 12,840 × $7,260)
                    5,089

                    Total
                    14,089

                A will, however, receive credit against her tax under section 668(b).

              § 1.668(a)-4
              Tax attributable to throwback.
              (a) The tax attributable to amounts deemed distributed under section 666 is imposed on the beneficiary for the taxable year of the beneficiary in which the accumulation distribution is made unless the taxable year of the beneficiary is different from that of the trust (see section 662(c) and the regulations thereunder). In the case of a trust (other than a foreign trust created by a U.S. person), the tax cannot be greater than the aggregate of the taxes attributable to those amounts had they been included, in accordance with the provisions of section 662 (a)(2) and (b), in the gross income of the beneficiary for the preceding taxable year or years in which they were deemed distributed. In the case of a foreign trust created by a U.S. person, the tax on the beneficiary shall be computed in accordance with the provisions of section 669 and the regulations thereunder. The tax liability of the beneficiary of a trust (other than a foreign trust created by a U.S. person), including the portion of an entire foreign trust which does not constitute a foreign trust created by a U.S. person (see § 1.643(d)-1), for the taxable year is computed in the following manner:
              (1) First, compute the amount of tax for the taxable year attributable to the section 666 amounts which are included in the gross income of the beneficiary for the year. The tax attributable to those amounts is the difference between the tax for the taxable year computed with the inclusion of the section 666 amounts in gross income and the tax computed without including them in gross income.
              (2) Next, compute the tax attributable to the section 666 amounts for each of the preceding taxable years as if they had been included in gross income for those years. The tax attributable to such amounts in each such preceding taxable year is the difference between the tax for such preceding year computed with the inclusion of the section 666 amounts in gross income and the tax for such year computed without including them in gross income. The tax computation for each preceding year shall reflect the taxpayer's marital and dependency status for that year.

              (3) The total tax for the taxable year is the tax for that year computed without including the section 666 amounts, plus:

              (i) The amount of the tax for the taxable year attributable to the section 666 amounts (computed in accordance with subparagraph (1) of this paragraph), or (ii) The sum of the taxes for the preceding taxable years attributable to the section 666 amounts (computed in accordance with subparagraph (2) of this paragraph),
              whichever is the smaller.

              (b) The provisions of paragraph (a) of this section may be illustrated by the following example:

                Example.
                (1) During the taxable year 1956, $10,000 is deemed distributed under section 666 to a beneficiary, of which $6,000 is deemed distributed by the trust on the last day of 1955 and $4,000 on the last day of 1954. The beneficiary had taxable income (after deductions) from other sources of $5,000 for 1956, $10,000 for 1955, and $10,000 for 1954. The beneficiary's tax liability for 1956 is $4,730 determined as follows:

                      Year 1956

                    Tax on $15,000 (taxable income including section 666 amounts)
                    $4,730

                    Tax on $5,000 (taxable income excluding section 666 amounts)
                    1,100

                    Tax attributable to section 666 amounts
                    3,630

                      Year 1955

                    Tax on $16,000 (taxable income including section 666 amounts)
                    $5,200

                    Tax on $10,000 (taxable income excluding section 666 amounts)
                    2,640

                    Tax attributable to section 666 amounts
                    2,560

                      Year 1954

                    Tax on $14,000 (taxable income including section 666 amounts)
                    $4,260

                    Tax on $10,000 (taxable income excluding section 666 amounts)
                    2,640

                    Tax attributable to section 666 amounts
                    1,620

                (2) Inasmuch as the tax of $3,630 attributable to the section 666 amounts as computed at 1956 rates is less than the aggregate of the taxes of $4,180 ($2,560 plus $1,620) determined for the preceding taxable years the amount of $3,630 is added to the tax ($1,100) computed for 1956 without including the section 666 amounts.

              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6989, 34 FR 737, Jan. 17, 1969]

              § 1.668(b)-1
              Credit for taxes paid by the trust.
              (a) The taxes imposed on a complex trust for a taxable year which would not have been payable by the trust if amounts deemed under section 666 to have been distributed in the year had in fact been distributed in the year are not allowable as a refund to the trust but are allowable as a credit against the tax of the beneficiaries to whom the amounts described in section 666(a) are distributed.
              (b) The credit to which a beneficiary is entitled under section 668(b) is allowed for the taxable year in which the accumulation distribution (to which the credit relates) is required to be included in the gross income of the beneficiary. Any excess over the total tax liability of the beneficiary is treated as an overpayment of tax by the beneficiary.
              (c) The beneficiary is entitled to a portion of the credit described in paragraph (a) of this section in the ratio which the amount of the accumulation distribution to him bears to the accumulation distributions to all the beneficiaries.

              § 1.668(b)-2
              Illustration of the provisions of subpart D.

              The provisions of subpart D (section 665 and following), part I, subchapter J, chapter 1 of the Code, other than provisions relating to a foreign trust created by a U.S. person, may be illustrated by the following example:

                Example.
                (a) Facts. (1) Under the terms of a trust instrument, one-half of the trust income is required to be distributed currently to beneficiary A. The trustee may in his discretion accumulate the balance of the income of the trust or he may make distributions to B out of income or corpus. The trust is to terminate upon the death of A and the corpus is to be distributed to B. Capital gains are allocable to corpus. All of the expenses of the trust are charges against income. The trust instrument provides for a reserve for depreciation, so that depreciation is deductible in computing distributable net income. The trust and both beneficiaries report on the calendar year basis. The trust had long-term capital gains of $20,000 for 1954, and $10,000 for 1955, which were allocated to corpus. The distributable net income of the trust as determined under section 643(a) for 1954, 1955, 1956, and 1957 is deemed to consist of the following items of income:

                    Dividends
                    Rents
                    Interest (taxable)
                    Interest (exempt)
                    Total

                    1954
                    $15,000
                    $20,000
                    $10,000
                    $5,000
                    $50,000

                    1955
                    10,000
                    15,000
                    10,000
                    5,000
                    40,000

                    1956
                    10,000
                    20,000
                    15,000
                    5,000
                    50,000

                    1957
                    10,000
                    15,000
                    15,000
                    5,000
                    45,000

                (2) One-half ($7,500) of the dividends for 1954 was received by the trust on or before July 31, 1954, and the balance was received after that date.
                (3) The following distributions were made by the trustee to A and B during the taxable years 1954 through 1957:

                    A
                    B

                    1954
                    $25,000
                    None

                    1955
                    20,000
                    None

                    1956
                    25,000
                    $45,000

                    1957
                    22,500
                    29,550

                (b) Distributions to A. A is deemed to have received one-half of each item of income entering into the computation of distributable net income as shown in paragraph (a)(1) of this example. See § 1.662(a)-2 for rules for the treatment of currently distributable income in the hands of the beneficiary.
                (c) Tax liability of the trust—(1) 1954. (i) The tax liability of the trust for the taxable year 1954 is $13,451, computed as follows:

                    Distributable net income under section 643(a) (paragraph (a)(1) of this example)
                    $50,000

                    Less amounts not includible in gross income:

                    Tax-exempt interest
                    $5,000

                    Dividend exclusion
                    50

                    5,050

                    Distributable net income as adjusted
                    44,950

                    Add: Capital gains (long-term)
                    20,000

                    Total
                    64,950

                    Deductions:

                    Distributions to A
                    $22,475

                    Capital gain deduction
                    $10,000

                    Personal exemption
                    100

                    32,575

                    Taxable income
                    32,375

                    Alternative tax
                    13,601

                    Dividend received credit
                    150

                    Tax liability
                    13,451

                (ii) See paragraph (b) of this example for character of income deemed distributed to A and section 661 for rules for computing the amount deductible by a trust for distributions to beneficiaries. Inasmuch as one-half of the dividends of the trust is deemed to be distributed to A, $25 of such distribution is deemed to be made from the dividend exclusion of $50, and the balance from dividends included in the gross income of the trust (that is, since the year 1954 is involved, $3,725 from dividends received on or before July 31, 1954, and $3,750 from dividends received after July 31, 1954). The trust is entitled to a dividend received credit attributable to the dividends of $3,750 received after July 31, 1954, which were not distributed to any beneficiary during the taxable year.
                (2) 1955. (i) The tax liability of the trust for the taxable year 1955 is $8,189, computed as follows:

                    Distributable net income under section 643(a) (paragraph (a)(1) of this example)
                    $40,000

                    Less amounts not includible in gross income:

                    Tax-exempt interest
                    $5,000

                    Dividend exclusion
                    50

                    5,050

                    Distributable net income as adjusted
                    34,950

                    Add: Capital gains (long-term)
                    10,000

                    Total
                    44,950

                    Deductions:

                    Distributions to A
                    $17,475

                    Capital gain deduction
                    5,000

                    Personal exemption
                    100

                    22,575

                    Taxable income
                    22,375

                    Alternative tax
                    8,388

                    Dividend received credit
                    199

                    Tax liability
                    8,189

                (ii) See paragraph (b) of this example for character of income deemed distributed to A and section 661 for rules for computing the amount deductible by a trust for distributions to beneficiaries. Inasmuch as one-half ($4,975) of the dividends of $9,950 ($10,000 less dividend exclusion of $50) included in the gross income of the trust is deemed distributed to A, the trust is entitled to a dividend received credit with respect to the dividends of $4,975 which were not distributed to any beneficiary during the taxable year.
                (3) 1956 and 1957. The trust had no tax liability for the taxable years 1956 and 1957 since all of its income was distributed during such years.
                (d) Accumulation distributions. (1) Accumulation distributions of $20,000 and $7,050, as defined in section 665(b), were made to B during the years 1956 and 1957, respectively, computed as shown below:

                    1956
                    1957

                    Distributable net income of the trust as computed under section 643(a)
                    $50,000
                    $45,000

                    Less. Income currently distributable to A
                    25,000
                    22,500

                    Balance of income
                    25,000
                    22,500

                    Other amounts distributed to B
                    45,000
                    29,550

                    Accumulation distributions to B
                    20,000
                    7,050

                (2) B is deemed to have received one-half of each item of income entering into the computation of distributable net income (shown in paragraph (a)(1) of this example) for the years 1956 and 1957.
                (3) The accumulation distribution for 1956 must first be allocated to the preceding taxable years as provided in section 666. After the application of the provisions of subpart D to the 1956 accumulation distribution and to the undistributed net incomes of the preceding taxable years, a similar allocation must be made of the 1957 accumulation distribution.
                (e) Throwback of 1956 accumulation distribution to 1955. The accumulation distribution of $20,000 for 1956 must be allocated to the first preceding taxable year 1955, before allocation is made to the second preceding taxable year 1954.
                (1) 1955 Undistributed net income. (i) The undistributed net income of the trust for 1955, determined as of the close of 1955, is $12,885, computed as follows:

                    Distributable net income as computed under section 643(a) (paragraph (a)(1) of this example)
                    $40,000

                    Less:

                    Distributions to A
                    $20,000

                    Taxes imposed on the trust
                    7,115

                    27,115

                    Undistributed net income as of the close of 1955
                    12,885

                (ii) The taxes imposed on the trust of $7,115 are that portion of the taxes paid by the trust for 1955 which is attributable to the undistributed portion of distributable net income included in the taxable income of the trust (the “balance” in the computation below) and is determined as follows:

                    Taxable income (paragraph (c)(2)(i) of this example
                    $22,375

                    Capital gains allocable to corpus
                    $10,000

                    Less:

                    Capital gain deduction
                    $5,000

                    Personal exemption
                    100

                    5,100

                    Portion of taxable income allocable to corpus
                    4,900

                    Balance
                    17,475

                    Total taxes paid by the trust
                    8,189

                    Taxes on income ($4,900) allocable to corpus
                    1,074

                    Taxes imposed on the trust (section 665(c))
                    7,115

                (iii) The amount of $1,074 is the taxes which the trust would have paid for 1955 had all of the distributable net income been distributed during the year.
                (2) Allocation of 1956 accumulation distribution to the preceding taxable year 1955. The portion of the 1956 accumulation distribution which is deemed under section 666(a) to be distributed to B on the last day of 1955 (the first preceding taxable year) is $12,885, an amount equal to the undistributed net income for 1955. An additional amount equal to the taxes imposed on the trust ($7,115) is, under section 666(b), also deemed to be distributed to B on the last day of 1955. Thus, a total of $20,000 ($12,885 plus $7,115) is deemed to be distributed to B on December 31, 1955, by reason of the allocation of the 1956 accumulation distribution to the first preceding taxable year. See paragraph (h) of this example for the treatment of the amount of $20,000 in the hands of B.
                (3) Character of amounts deemed distributed. Inasmuch as one-half of the 1955 distributable net income of the trust as determined under section 643(a) was currently distributable to A and the balance of such income is deemed under section 666 to be distributed to B on December 31, 1955, the distribution to B is deemed to consist of one-half of each item of income entering into the computation of the 1955 distributable net income; that is, dividends of $5,000, rents of $7,500, taxable interest of $5,000, and tax-exempt interest of $2,500.
                (4) Credit for taxes paid by the trust. The amount of the taxes for the year 1955 which may not be refunded or credited to the trust under section 667 and which is allowed as a credit against the tax of B for 1956 under section 668(b) is $7,115. See also paragraph (h)(3) of this example.
                (5) Effect of application of provisions of subpart D to the year 1955. After the allocation of the 1956 accumulation distribution to the preceding taxable year 1955, the undistributed portion of the distributable net income, the undistributed net income, and the taxes imposed on the trust for 1955 are zero. The portion of the 1956 accumulation distribution which is unabsorbed by the 1955 undistributed net income is $7,115, determined as follows:

                    1956 accumulation distribution (paragraph (d)(1) of this example)
                    $20,000

                    Less: Amount allocable to 1955
                    12,885

                    Balance allocable to second preceding taxable year 1954
                    7,115

                (f) Throwback of 1956 accumulation distribution to 1954. The unabsorbed portion of the 1956 accumulation distribution of $7,115 is allocable to the second preceding taxable year 1954 and is treated under section 666 as a distribution to B on the last day of such year.
                (1) 1954 Undistributed net income. (i) The undistributed net income of the trust for 1954, determined as of the close of 1954, is $14,155, computed as follows:

                    Distributable net income as computed under section 643(a) (paragraph (a)(1) of this example)
                    $50,000

                    Less:

                    Distributions to A
                    $25,000

                    Taxes imposed on the trust
                    10,845

                    35,845

                    Undistributed net income as of the close of 1954
                    14,155

                (ii) The taxes imposed on the trust of $10,845 are that portion of the taxes paid by the trust for 1954 which is attributable to the undistributed portion of distributable net income included in the taxable income of the trust (the “balance” in the computation below in this subdivision) and is determined as follows:

                    Taxable income (paragraph (c)(1)(i) of this example)
                    $32,375

                    Capital gains allocable to corpus
                    $20,000

                    Less:

                    Capital gain deduction
                    $10,000

                    Personal exemption
                    100

                    10,100

                    Portion of taxable income allocable to corpus
                    9,900

                    Balance
                    22,475

                    Total taxes paid by the trust
                    13,451

                    Taxes on income ($9,900) allocable to corpus
                    2,606

                    Taxes imposed on the trust (section 665(c))
                    10,845

                (iii) The amount of $2,606 is the taxes which the trust would have paid for 1954 had all of the distributable net income been distributed during that year.
                (2) Allocation of 1956 accumulation distribution to the second preceding taxable year 1954. Since the unabsorbed portion of the 1956 accumulation distribution of $7,115 is less than the 1954 undistributed net income of $14,155, the trust is deemed under section 666(c) to have also distributed an additional amount ($5,451) equal to a pro rata portion (7,115/14,155 × $10,845) of the taxes imposed on the trust for 1954. Thus, a total of $12,566 ($7,115 plus $5,451) is deemed to be distributed to B on December 31, 1954, by reason of the throwback of the 1956 accumulation distribution. See paragraph (h) of this example for the treatment of the amount of $12,566 in the hands of B.
                (3) Character of amounts deemed distributed to B. The amount of $12,566 which, under section 666, is deemed to be distributed to B on December 31, 1954, is deemed to be composed of the following items of income of the trust: Dividends, $3,770 (15,000/50,000 × $12,566); rents, $5,026 (20,000/50,000 × $12,566); taxable interest, $2,513 (10,000/50,000 × $12,566); and tax-exempt interest, $1,257 (5,000/50,000 × $12,566). One-half of the dividends of $3,770 is considered as distributed from the dividends received by the trust on or before July 31, 1954, of which $13 (3,770/15,000 × $50) is deemed distributed from the dividends excluded under section 116, and the other half as distributed from the dividends received after July 31, 1954. Thus, of the total of $12,566 deemed distributed to B, $11,296 is considered as made from income included in the gross income of the trust and $1,270 from non-taxable income of the trust.
                (4) Credit for taxes paid by the trust. The amount of the taxes for the year 1954 which may not be refunded or credited to the trust under section 667 and which is allowed as a credit against the tax of B for 1956 under section 668(b), because of the allocation of the 1956 accumulation distribution to 1954, is $5,401, computed as follows:

                    Taxable income of the trust as of the close of 1954 (paragraph (c)(1) of this example)
                    $32,375

                    Less: Amount deemed distributed to B under section 666 from the taxable income of the trust
                    11,296

                    Taxable income adjusted as of the close of 1956
                    21,079

                    (Taxes on $21,079 (alternative tax)
                    $8,050

                    Taxes on income allocable to corpus (subparagraph (1)(ii) of this paragraph)
                    $2,606

                    Taxes imposed on the trust determined as of the close of 1956
                    5,444

                    Taxes imposed on the trust determined as of the close of 1954
                    $10,845

                    Taxes imposed on the trust determined as of the close of 1956
                    5,444

                    Amount of taxes allowed as a credit to B under section 668(b)
                    5,401

                (5) Effect of application of provisions of subpart D to the year 1954. (i) The undistributed portion of the distributable net income of the trust for the year 1954, determined as of the close of 1956, is $12,434, computed as follows:

                    Distributable net income (section 643(a))
                    $50,000

                    Less:

                    Amount currently distributable to A
                    $25,000

                    Amount deemed distributed to B under section 666
                    12,566

                    ————
                    37,566

                    Undistributed portion of distributable net income as of the close of 1956
                    12,434

                (ii) The amount of $12,434 is deemed to consist of dividends of $3,730, rents of $4,974, taxable interest of $2,487, and tax-exempt interest of $1,243, determined as follows:

                    Dividends
                    Rents
                    Interest (taxable)
                    Interest (exempt)
                    Total

                    Trust income
                    $15,000
                    $20,000
                    $10,000
                    $5,000

                      1 $50,000

                    Distributions:

                    To A
                    7,500
                    10,000
                    5,000
                    2,500

                      2 25,000

                    To B
                    3,770
                    5,026
                    2,513
                    1,257

                      3 12,566

                    Total
                    11,270
                    15,026
                    7,513
                    3,757
                    37,566

                    Balance
                    3,730
                    4,974
                    2,487
                    1,243
                    12,434

                    1 See paragraph (a)(1) of this example.

                    2 See paragraph (b) of this example.

                    3 See paragraph (f)(3) of this example.

                (iii) The undistributed net income of the trust for 1954, determined as of the close of 1956, is $6,990, computed as follows:

                    Undistributed portion of distributable net income as of the close of 1956
                    $12,434

                    Less: Taxes imposed on the trust determined as of the close of 1956 (subparagraph (4) of this paragraph)
                    5,444

                    Undistributed net income as of the close of 1956
                    6,990

                (g) Throwback of 1957 accumulation distribution. Inasmuch as all of the income of the trust for the first preceding taxable year 1956 was distributed during such year and the trust had no undistributed net income for the second preceding taxable year 1955 after the application of subpart D to the accumulation distribution made during 1956, the 1957 accumulation distribution of $7,050 is allocable to the third preceding taxable year 1954. See paragraph (d)(1) of this example for computation of the accumulation distribution.
                (1) Allocation of 1957 accumulation distribution to the preceding taxable year 1954. The portion of the 1957 accumulation distribution which is deemed under section 666(a) to be distributed to B on the last day of 1954 is $6,990, an amount equal to the undistributed net income of the trust for 1954, determined as of the close of 1956. An additional amount equal to the taxes imposed on the trust ($5,444), determined as of the close of 1956, is under section 666(b) also deemed to be distributed to B on the last day of 1954. See paragraph (f) (4) and (5) of this example. Thus, a total of $12,434 ($6,990 plus $5,444) is deemed to be distributed to B on December 31, 1954, by reason of the allocation of the 1957 accumulation distribution to the taxable year 1954. See paragraph (j) of this example for the treatment of the amount of $12,434 in the hands of B.
                (2) Character of amounts deemed distributed. Inasmuch as the balance of the 1954 distributable net income of the trust is deemed under section 666 to be distributed to B on December 31, 1954, the distribution is deemed to consist of dividends of $3,730, rents of $4,974, taxable interest of $2,487, and tax-exempt interest of $1,243. See paragraph (f)(5)(ii) of this example.
                (3) Credit for taxes paid by the trust. The amount of taxes for the year 1954 which may not be refunded or credited to the trust under section 667 and which is allowed as a credit against the tax of B under section 668(b) is $5,444, the amount of taxes imposed on the trust determined as of the close of 1956. See paragraph (f)(4) of this example.
                (4) Effect of application of provisions of subpart D to the year 1954. After the allocation of the 1957 accumulation distribution to the preceding taxable year 1954, the undistributed portion of the distributable net income, the undistributed net income, and the taxes imposed on the trust for 1954 are zero. The balance of $60 ($7,050 less $6,990) of the 1957 accumulation distribution remaining after the allocation of the accumulation distribution to the year 1954, may not be allocated to the year 1953 since that year is not subject to the provisions of the Internal Revenue Code of 1954.
                (h) Determination of B's tax liability; taxable year 1956—(1) Amount of trust income includible in gross income. (i) Of the amount of $45,000 distributed by the trust to B during the taxable year 1956, $25,000 is treated as a distribution out of trust income for that year within the meaning of section 662(a)(2), and $20,000 as an accumulation distribution within the meaning of section 665(b) (see paragraph (d) of this example). However, $12,885 plus taxes of $7,115 is deemed distributed to B on December 31, 1955, and $7,115 plus taxes of $5,451 on December 31, 1954, under section 666 by reason of the accumulation distribution made during 1956, and these amounts are includible in B's gross income for 1956 to the extent that they would have been includible in his gross income under section 662 (a)(2) and (b) for 1955 and 1954, respectively, had they been distributed on the last day of those years.
                (ii) The amounts distributed to B out of trust income for the year 1956, and the amounts deemed distributed out of income for the preceding taxable years 1955 and 1954 have the following character for the purpose of determining the amount includible in B's gross income for 1956:

                    Year
                    Dividends
                    Rents
                    Interest (taxable)
                    Interest (exempt)
                    Total

                    1956
                    $5,000
                    $10,000
                    $7,500
                    $2,500

                      1 $25,000

                    1955
                    5,000
                    7,500
                    5,000
                    2,500

                      2 20,000

                    1954
                    3,770
                    5,026
                    2,513
                    1,257

                      3 12,566

                    Total
                    13,770
                    22,526
                    15,013
                    6,257
                    57,566

                    1 See paragraph (d)(2) of this example.

                    2 See paragraph (e)(3) of this example.

                    3 See paragraph (f)(3) of this example.

                Thus, B will include in gross income for 1956 dividends of $13,770 (subject to the dividend exclusion), rents of $22,526, and taxable interest of $15,013, and will exclude the tax-exempt interest of $6,257.
                (2) Computation of tax. (i) For the purpose of computing B's tax liability, it is assumed that he was single during the taxable years 1954, 1955, and 1956, and that his taxable income (derived from salary) for each of the years 1954 and 1955 amounted to $13,400 on which a tax of $4,002 was paid for each year. It is also assumed that his income (other than distributions from the trust) for 1956 was $15,000 derived from salary, and he had allowable deductions of $10,600, which included the deduction for personal exemption.
                (ii) The computation of the tax for the taxable year 1956 attributable to the section 666 amounts which are included in B's gross income for such year, as provided in paragraph (a)(1) of § 1.668(a)-4, is as follows:

                    (1) Section 666 amounts excluded
                    (2) Section 666 amounts included

                    Salary
                    $15,000
                    $15,000

                    Income from trust:

                    Dividends ($50 excluded)
                    4,950
                    13,720

                    Rents
                    10,000
                    22,526

                    Taxable interest
                    7,500
                    15,013

                    Total
                    37,450
                    66,259

                    Less: Allowable deductions
                    10,600
                    10,600

                    Taxable income
                    26,850
                    55,659

                    Total tax
                    11,267
                    31,064

                    Less: Dividend received credit
                    198
                    475

                    Tax liability
                    $11,069
                    30,589

                    Tax on income from which section 666 amounts are excluded

                    11,069

                    1956 tax attributable to section 666 amounts

                    19,520

                Only that portion of the dividends received by the trust after July 31, 1954, and deemed distributed to B under section 666, on the last day of such year is included in computing the dividend received credit shown in column (2). See paragraph (f)(3) of this example.

                (iii) The computation of the taxes for the preceding taxable years attributable to the section 666 amounts which are deemed distributed by the trust on the last day of these years, as provided in paragraph (a)(2) of § 1.668(a)-4, is as follows:

                    Preceding taxable years
                    First 1955
                    Second 1954

                    Taxable income previously reported
                    $13,400
                    $13,400

                    Section 666 amounts:

                    Dividends ($50 excluded)
                    4,950
                    3,720

                    Rents
                    7,500
                    5,026

                    Taxable interest
                    5,000
                    2,513

                    Taxable income as adjusted
                    30,850
                    24,659

                    Total tax
                    13,747
                    9,949

                    Less: Dividend received credit
                    198
                    75

                    Balance of tax
                    13,549
                    9,874

                    Tax liability
                    4,002
                    4,002

                    Tax attributable to section 666 amounts
                    9,547
                    5,872

                Only that portion ($1,885) of the dividends received by the trust after July 31, 1954, and deemed distributed under section 666 on the last day of that year, is included in computing the dividend received credit of $75 for the year 1954. See paragraph (f)(3) of this example.
                (iv) Inasmuch as the aggregate of the taxes of $15,419 ($9,547 plus $5,872) attributable to the section 666 amounts as determined for the preceding taxable years is less than the tax of $19,520 determined for the taxable year 1956, the amount of $15,419 shall be added to the tax computed for 1956 without including the section 666 amounts. Thus, B's tax liability for 1956 is $26,488 ($11,069 plus $15,419).
                (3) Credits against the tax. B is allowed under section 668(b) a credit of $12,516 ($5,401 for 1954 and $7,115 for 1955) against his 1956 tax liability for the taxes paid by the trust for the preceding taxable years and which may not be refunded or credited to the trust under section 667. See paragraphs (e)(4) and (f)(4) of this example.
                (i) [Reserved]
                (j) Taxable year 1957—(1) Amount of trust income includible in gross income. (i) Of the amount of $29,550 distributed by the trust to B during the taxable year 1957, $22,500 is treated as a distribution out of trust income for that year within the meaning of section 662(a)(2), and $7,050 as an accumulation distribution within the meaning of section 665(b) (see paragraph (d) of this example). However, $6,990 plus taxes of $5,444 is deemed distributed to B on December 31, 1954, under section 666 by reason of the accumulation distribution made during 1957, and that amount is includible in B's gross income for 1957, to the extent that it would have been includible in his gross income under section 662 (a)(2) and (b) for 1954, had it been distributed on the last day of that year.
                (ii) The amounts deemed distributed to B out of trust income for the year 1957 and the preceding taxable year 1954 are deemed to have the following character for the purpose of determining the amount includible in B's gross income for 1957:

                    Year
                    Dividends
                    Rents
                    Interest (taxable)
                    Interest (exempt)
                    Total

                    1957
                    $5,000
                    $7,500
                    $7,500
                    $2,500

                      1 $22,500

                    1954
                    3,730
                    4,974
                    2,487
                    1,243

                      2 12,434

                    Total
                    8,730
                    12,474
                    9,987
                    3,743
                    34,934

                    1 See paragraph (d)(2) of this example.

                    2 See paragraph (g)(2) of this example.

                Thus, B will include in gross income for the year 1957 dividends of $8,730 (subject to the dividend exclusion), rents of $12,474, and taxable interest of $9,987 and will exclude the tax-exempt interest of $3,743.
                (2) Computation of tax. (i) For the purpose of computing B's tax liability for 1957, it is assumed that he was single for the entire year and had income (other than distributions from the trust) of $15,000 from salary. Also, he had allowable deductions of $8,100, which included the deductions for personal exemption.
                (ii) The computation of the tax for the taxable year 1957 attributable to the section 666 amounts which are included in B's gross income for that year, as provided in paragraph (a)(1) of § 1.668(a)-4, is as follows:

                    Section 666 amounts excluded
                    Section 666 amounts included

                    Salary
                    $15,000
                    $15,000

                    Trust income:

                    Dividends ($50 excluded)
                    4,950
                    8,680

                    Rents
                    7,500
                    12,474

                    Taxable interest
                    7,500
                    9,987

                    Total
                    34,950
                    46,141

                    Less: Allowable deductions
                    8,100
                    8,100

                    Taxable income
                    26,850
                    38,041

                    Total tax
                    11,267
                    18,388

                    Less: Dividends received credit
                    198
                    275

                    Tax liability
                    11,069
                    18,113

                    Tax on income from which section 666 amounts are excluded

                    11,069

                    1957 tax attributable to section 666 amounts

                    7,044

                See explanation following computation in paragraph (h)(2)(ii) of this example with respect to the computation of the dividend received credit on dividends received by the trust in 1954.

                (iii) The amount of tax, computed at 1954 rates, attributable to the section 666 amounts which are deemed to have been distributed by the trust on the last day of 1954, is $6,939, computed as follows:

                    1954 taxable income as adjusted (paragraph (h)(2)(iii) of this example)
                    $24,659

                    Section 666 amounts:

                    Dividends
                    3,730

                    Rents
                    4,974

                    Taxable interest
                    2,487

                    Taxable income as adjusted
                    35,850

                    Total tax
                    16,963

                    Less: Dividends received credit
                    150

                    Balance of tax
                    16,813

                    Tax liability for 1954
                    $4,002

                    Tax attributable to 1956 accumulation distribution this example)
                    5,872

                    9,874

                    Tax attributable to the section 666 amounts distributed in 1957
                    6,939

                Only that portion ($3,750) of the dividends received by the trust after July 31, 1954, and deemed distributed under section 666 on the last day of that year, is included in computing the dividend received credit of $150. See paragraphs (f)(3) and (g)(2) of this example.
                (iv) Inasmuch as the tax of $6,939 attributable to the section 666 amounts as determined for the preceding taxable year 1954 is less than the tax of $7,044 attributable to these amounts for the year 1957, the amount of $6,939 shall be added to the tax computed for 1957 without including in gross income the section 666 amounts. Thus, B's tax liability for 1957 is $18,008 ($11,069 plus $6,939).
                (3) Credit against the tax. B is allowed under section 668(b) a credit of $5,444 against his 1957 tax liability for the balance of the taxes paid by the trust for 1954 and which may not be refunded or credited to the trust under section 667. See paragraph (g)(3) of this example.

              (Sec. 669(a) as amended by sec. 331(a), Tax Reform Act 1969 (83 Stat. 592))
              [T.D. 6500, 25 FR 11814, Nov. 26, 1960, as amended by T.D. 6989, 34 FR 738, Jan. 17, 1969]

              § 1.669(a)-1
              Limitation on tax.
              (a) In general. Section 669 provides that, at the election of a beneficiary who is a U.S. person (as defined in section 7701(a)(30)) and who satisfies the requirements of section 669(b) (that certain information with respect to the operation and accounts of the trust be supplied), the tax attributable to the amounts treated under section 668(a) as having been received by him, from a foreign trust created by a U.S. person, on the last day of a preceding taxable year of the trust shall not be greater than the tax computed under section 669(a)(1)(A) (the computation under this provision will hereinafter be referred to as the “exact throwback” method) or under section 669(a)(1)(B) (the computation under this provision will hereinafter be referred to as the “short-cut throwback” method). This election of the beneficiary with respect to the taxable year of the beneficiary in which the distribution is made shall be made with the district director before the expiration of the period of limitations for assessment provided in section 6501 for such taxable year.
              (b) Where no election is made. If the beneficiary does not make the election provided in section 669(a) in the manner required in section 669(b) and § 1.669(b)-2, or furnish the information with respect to the operation and accounts of the foreign trust created by a U.S. person required by section 669(b) and § 1.669(b)-1, the tax on an accumulation distribution treated under section 668(a) as having been received by him from such foreign trust on the last day of a preceding taxable year of the trust shall be computed without reference to section 668 or 669. In such case, the entire accumulation distribution will be included in the gross income of the beneficiary in the year in which it is paid, credited, or required to be distributed, and tax for such year will be computed on the basis of the beneficiary's total taxable income for the year after taking into account such inclusion in gross income.
              (c) Year for which tax is payable. The tax, regardless of the manner in which computed, of the beneficiary which is attributable to an accumulation distribution is imposed on the beneficiary for the taxable year of the beneficiary in which the accumulation distribution is made to him unless the taxable year of the beneficiary is different from that of the trust. See section 662(c) and § 1.662(c)-1.
              [T.D. 6989, 34 FR 738, Jan. 17, 1969]

              § 1.669(a)-2
              Rules applicable to section 669 computations.
              (a) In general. (1) Section 668(a) provides that the total of the amounts treated under section 666 as having been distributed by the foreign trust created by a U.S. person on the last day of a preceding taxable year of such trust shall be included in the gross income of the beneficiary or the beneficiaries who are U.S. persons receiving them. The total of such amounts is includible in the gross income of each beneficiary to the extent the amount would have been included in his gross income under section 662 (a)(2) and (b) if the total had actually been paid by the trust on the last day of such preceding taxable year. The total is included in the gross income of the beneficiary for the taxable year of the beneficiary in which such amounts are in fact paid, credited, or required to be distributed unless the taxable year of the beneficiary differs from the taxable year of the trust (see section 662(c) and § 1.662(c)-1). The character of the amounts treated as received by a beneficiary in prior taxable years, including taxes deemed distributed, in the hands of the beneficiary is determined by the rules contained in section 662(b) and §§ 1.662(b)-1 and 1.662(b)-2.
              (2) The total of the amounts treated under section 666 as having been distributed by the trust on the last day of a preceding taxable year of the trust are included as prescribed in subparagraph (1) of this paragraph in the gross income of the beneficiary even though as of that day the beneficiary would not have been entitled to receive them had they actually been distributed on that day.
              (3) Any deduction allowed to the trust in computing distributable net income for a preceding taxable year (such as depreciation, depletion, etc.) is not deemed allocable to a beneficiary because of the amounts included in a beneficiary's gross income under this section since the deduction has already been utilized in reducing the amount included in the beneficiary's income.
              (b) Allocation among beneficiaries of a foreign trust. Where there is more than one beneficiary the portion of the total amount includible in gross income under paragraph (a) of this section which is includible in the gross income of a beneficiary who is a U.S. person is based upon the ratio determined under the second sentence of section 662(a)(2) for the taxable year in which distributed (and not for the preceding taxable year). This paragraph may be illustrated by the example in § 1.668(a)-2.
              (c) Treatment of income taxes paid by the trust—(1) Current distributions. The income taxes imposed by the provisions of section 871 on the income of a foreign trust created by a U.S. person shall be included in the gross income of the beneficiary, who is a U.S. person, for the taxable year in which such income is paid, credited, or required to be distributed to the beneficiary.
              (2) Accumulation distribution. (i) If an accumulation distribution is deemed under § 1.666(a)-1 to be distributed on the last day of a preceding taxable year and the amount is not less than the undistributed net income for such preceding taxable year, then an additional amount equal to the taxes imposed on the trust pursuant to the provisions of section 871 for such preceding taxable year is likewise deemed distributed under section 661(a)(2).
              (ii) If an accumulation distribution is deemed under § 1.666(a)-1 to be distributed on the last day of a preceding taxable year and the amount is less than the undistributed net income for such preceding taxable year, then an additional amount (representing taxes) is likewise deemed distributed under section 661(a)(2). The additional amount is equal to the taxes imposed on the trust pursuant to the provisions of section 871 for such preceding taxable year, multiplied by the fraction the numerator of which is the amount of the accumulation distribution attributable to such preceding taxable year and the denominator of which is the undistributed net income for such preceding taxable year.
              (3) Credits under sections 32 and 668(b). Credit under section 32 is allowable to the beneficiary for income taxes withheld at source under subchapters A and B of chapter 3 and which are deemed distributed to him. Credit under section 668(b) is allowable to the beneficiary for income taxes imposed upon the foreign trust by section 871(b). These credits shall be allowed against the tax of the beneficiary for the taxable year of the beneficiary in which the income is paid, credited, or required to be distributed to him, or in which the accumulation distribution to which such taxes relate is made to him.

              (d) Credit for foreign income taxes paid by the trust. To the extent provided in section 901, credit under section 33 is allowable to the beneficiary for the foreign taxes paid or accrued by the trust to a foreign country.
              [T.D. 6989, 34 FR 738, Jan. 17, 1969]

              § 1.669(a)-3
              Tax computed by the exact throwback method.
              (a) Tax attributable to amounts treated as received in preceding taxable years. If a taxpayer elects to compute the tax, on amounts deemed distributed under section 666, by the exact throwback method provided in section 669(a)(1)(A), the tax liability of the beneficiary for the taxable year in which the accumulation distribution is paid, credited, or required to be distributed is computed as provided in paragraph (b) of this section. The beneficiary may not elect to use the exact throwback method of computing his tax on an accumulation distribution as provided in section 669(a)(1)(A) if he were not alive on the last day of each preceding taxable year of the foreign trust created by a U.S. person with respect to which a distribution is deemed made under section 666(a). Thus, if a portion of an amount received as an accumulation distribution was accumulated by the trust during years before the beneficiary was born, the beneficiary is not permitted to elect the exact throwback method provided in section 669(a)(1)(A). See § 1.669(a)-4 for the computation of the tax on an accumulation distribution by the short-cut throwback method provided in section 669(a)(1)(B) under these circumstances.
              (b) Computation of tax. The tax referred to in paragraph (a) of this section is computed as follows:
              (1) First, compute the tax attributable to the section 666 amounts for each of the preceding taxable years. To determine the section 666 amounts attributable to each of the preceding taxable years, see § 1.666(a)-1. The tax attributable to such amounts in each such preceding taxable year is the difference between the tax for such preceding taxable year computed with the inclusion of the section 666 amounts in gross income, and the tax for such year computed without including them in gross income. Tax computations for each preceding year shall reflect the taxpayer's marital and dependency status for that year.
              (2) Second, add
              (i) The sum of the taxes for the preceding taxable years attributable to the section 666 amounts (computed in accordance with subparagraph (1) of this paragraph), and
              (ii) The tax for the taxable year of the beneficiary in which the accumulation distribution is paid, credited, or required to be distributed to him, computed without including the section 666 amounts in gross income.
              The total of these amounts is the beneficiary's tax, computed under section 669(a)(1)(A) for the taxable year in which the accumulation distribution is paid, credited, or required to be distributed to him.
              (c) Effect of prior election. In computing the tax attributable to an accumulation distribution for the taxable year in which such accumulation distribution is paid, credited, or required to be distributed to him, the beneficiary in computing the tax attributable to section 666 amounts for each of the preceding taxable years, must include in his gross income for each such year the section 666 amounts deemed distributed to him in such year resulting from prior accumulation distributions made to him in taxable years prior to the current taxable year. These section 666 amounts resulting from such prior accumulation distributions must be included in the gross income for such preceding taxable year even though the tax on the accumulation distribution of such prior taxable year was computed by the short-cut throwback method provided in section 669(a)(1)(B) and § 1.669(a)-4.
              [T.D. 6989, 34 FR 739, Jan. 17, 1969]

              § 1.669(a)-4
              Tax attributable to short-cut throwback method.
              (a) Manner of computing tax. If a beneficiary has elected under section 669(a) to compute the tax on the amounts deemed distributed under section 666 by the short-cut throwback method provided in section 669(a)(1)(B), the tax liability of the beneficiary for the taxable year is computed in the following manner:

              (1) First, determine the number of preceding taxable years of the trust, on the last day of which an amount is deemed under section 666(a) to have been distributed. In any case where there has been a prior accumulation distribution with respect to which the beneficiary has elected to compute his tax either by the exact throwback method or by the short-cut throwback method, or to which the next to the last sentence of section 668(a) has applied, for purposes of an election to use the short-cut throwback method with respect to a subsequent accumulation distribution, in determining the number of preceding taxable years of the trust with respect to which an amount of the subsequent accumulation distribution is deemed distributed to a beneficiary under section 666(a), there shall be excluded any preceding taxable year during which any part of the prior accumulation distribution was deemed distributed to the beneficiary. For example, assume that an accumulation distribution of $90,000 made to a beneficiary in 1963 is deemed distributed in the amounts of $25,000 in each of the years 1962, 1961, and 1960, and in the amount of $15,000 in 1959, and a subsequent accumulation distribution of $85,000 made to the same beneficiary in 1964 is deemed distributed in the amount of $10,000 during 1959, and $25,000 during each of the years 1958, 1957, and 1956. The accumulation distribution made in 1963 is deemed distributed in 4 preceding taxable years of the trust (1962, 1961, 1960, and 1959). Inasmuch as the year 1959 was a year during which part of the 1963 accumulation distribution was deemed distributed, for purposes of determining the number of preceding taxable years in which the accumulation distribution of $85,000 made in 1964 is deemed distributed, the year 1959 is excluded and the $85,000 accumulation distribution is deemed distributed in three preceding taxable years (1958, 1957, and 1956),
              (2) Second, divide the number of preceding taxable years of the trust, on the last day of which an amount is deemed under section 666(a) to have been distributed (determined as provided in subparagraph (1) of this paragraph) into the amount (representing an accumulation distribution made by a foreign trust created by a U.S. person) required to be included under section 669(a) in the gross income of the beneficiary for the taxable year,
              (3) Third, compute the tax of the beneficiary for the current taxable year (the year in which the accumulation distribution is paid, credited, or required to be distributed to him) and for each of the 2 taxable years immediately preceding such year,
              (i) With the inclusion in gross income of the beneficiary for each of such 3 years of the amount determined under subparagraph (2) of this paragraph, and
              (ii) Without such inclusion.

              The difference between the amount of tax computed under subdivision (i) of this subparagraph for each year and the amount computed under subdivision (ii) of this subparagraph for that year is the additional tax resulting from the inclusion in gross income for that year of the amount determined under subparagraph (2) of this paragraph. If the number of preceding taxable years of the trust, on the last day of which an amount is deemed under section 666(a) to have been distributed, is less than three, the taxable years of the beneficiary for which this recomputation is made shall equal the number of years in which an amount is deemed under section 666(a) to have been distributed, commencing with the taxable year of the beneficiary in which the accumulation distribution is paid, credited, or required to be distributed to him. If the beneficiary was not alive during one of the two taxable years immediately preceding the taxable year, the tax resulting from the inclusion of the amount determined in subparagraph (2) of this paragraph in the gross income of the beneficiary will be computed only for the taxable year in which the accumulation distribution was paid, credited, or required to be distributed to him and the preceding year during which the beneficiary was alive. In the event the beneficiary was not alive during either of the 2 years immediately preceding the taxable year in which the accumulation distribution was paid, credited, or required to be distributed, the tax shall be computed on the basis of the beneficiary's taxable year without regard to the inclusion in income required by section 668(a) of any amount other than pursuant to section 669(a)(1)(B). For example, assume that a foreign trust created by a U.S. person accumulates $3,000 of income in 1964 and $7,000 in 1963 and then distributes the accumulated income on January 1, 1965, to a beneficiary who is a U.S. person. The limitation on tax is determined by recomputing the beneficiary's gross income for 1964 and 1965 by adding $5,000 to his gross income for each year. If the same distribution were made to an infant who was born in 1965, the limitation on tax would be computed by adding $5,000 to his gross income for such year. In the case of the infant, the resulting increase in tax would be multiplied by two to arrive at the limitation on the increase in his tax for 1965 attributable to such distribution.
              (4) Fourth, add the additional taxes resulting from the application of subparagraph (3) of this paragraph for the taxable year and the 2 taxable years (or the 1 taxable year, where applicable) immediately preceding the year in which the accumulation distribution is paid, credited, or required to be distributed and then divide this amount by three (or two, where applicable). The resulting amount is then multiplied by the number of preceding taxable years of the trust on the last day of which an amount is deemed under section 666(a) to have been distributed (previously determined under subparagraph (1) of this paragraph). The resulting amount is the tax, under the short-cut throwback method provided in section 669(a)(1)(B), which is attributable to the amounts treated under section 668(a) as having been received by the beneficiary from a foreign trust created by a U.S. person on the last day of the preceding taxable year.
              (5) Fifth, add the amount determined under subparagraph (4) of this paragraph to the beneficiary's tax for the taxable year in which the accumulation distribution was paid, credited, or required to be distributed to him, computed without inclusion of the accumulation distribution in gross income for that year. The total is the beneficiary's income tax for such year.
              (b) Credit for tax paid by trust. The income taxes deemed distributed to a beneficiary in the manner described in paragraphs (c) and (d) of § 1.669(a)-2 are included in the beneficiary's gross income for purposes of the computations required by this section. To the extent provided in § 1.669(a)-2, credits for such taxes are allowable to the beneficiary. In the computations under the short-cut throwback method provided in section 669(a)(1)(B), the rules set forth in section 662(b) and § 1.662(b)-1 shall be applied in determining the character, in the hands of the beneficiary, of the amounts, including taxes includible in the distribution or deemed distributed, treated as received by a beneficiary in prior taxable years. For example, if one-fifth of such amounts represents tax-free income, then one-fifth of the amount determined under paragraph (a)(2) of this section shall be treated as tax-free income.
              [T.D. 6989, 34 FR 739, Jan. 17, 1969]

              § 1.669(b)-1
              Information requirements.
              The election of a beneficiary who is a U.S. person to apply the limitations on tax provided in section 669(a) shall not be effective unless the beneficiary, at or before the time the election is made, supplies, in a letter addressed to the district director for the internal revenue district in which the taxpayer files his return (or the Director of International Operations where appropriate), or in a statement attached to his return, the following information with respect to the operation and accounts of the foreign trust created by a U.S. person for each of the preceding taxable years, on the last day of which an amount is deemed distributed under section 666(a):

              (a) The gross income of the trust: The gross income should be separated to show the amount of each type of income received by the trust and to identify its source. For example, the beneficiary should list separately, by type (dividends, rents, capital gains, taxable interest, exempt interest, etc.) and source (name and country of payor), each item of income included in the gross income of the trust. For this purpose, the gross income of the trust includes gross income from U.S. sources which is exempt from taxation under section 894.

              (b) The amount of tax withheld under section 1441 by the United States on income from sources within the United States.
              (c) The amount of the tax paid to each foreign country by the trust.
              (d) The expenses of the trust attributable to each type of income disclosed in paragraph (b) of this section, and the general expenses of the trust.
              (e) The distributions, if any, made by the trust to the beneficiaries (including those who are not U.S. persons). These distributions should be separated into amounts of income required to be distributed currently within the meaning of section 661(a)(1), and any other amounts properly paid, credited, or required to be distributed within the meaning of section 661(a)(2).
              (f) Any other information which is necessary for the computation of tax on the accumulation distribution as provided in section 669(a).
              (g) If the foreign trust created by a U.S. person is less than the entire foreign trust, the information listed in paragraphs (a) through (f) of this section shall also be furnished with respect to that portion of the entire foreign trust which is not a foreign trust created by a U.S. person.
              [T.D. 6989, 34 FR 740, Jan. 17, 1969]

              § 1.669(b)-2
              Manner of exercising election.
              (a) By whom election is to be made. Except as otherwise provided in this paragraph, a taxpayer whose tax liability is affected by the election shall make the election provided in section 669(a). In the case of a partnership, or a corporation electing under the provisions of subchapter S, chapter 1 of the Code, the election shall be exercised by the partnership or such corporation.
              (b) Time and manner of making election. The election under section 669(a) may be made, or revoked, at any time before the expiration of the period provided in section 6501 for assessment of the tax. If an election is revoked, a new election may be made at any time before the expiration of such period. The election (or a revocation of an election) may be made in a letter addressed to the district director of internal revenue for the district in which the taxpayer files his tax return (or the Director of International Operations where appropriate) or may be made in a statement attached to the return. In any case where all the information described in § 1.669(b)-1 is not furnished at or before the time the beneficiary signifies his intention of making an election and by reason thereof an election has not been made, and subsequent thereto, but before the expiration of the period provided in section 6501 for the assessment of the tax, there is furnished the required information not previously furnished, the election will be considered as made at the time such additional information is furnished.
              [T.D. 6989, 34 FR 740, Jan. 17, 1969]

            unitrust actuarial tables applicable before may 1, 2009

              § 1.664-4A
              Valuation of charitable remainder interests for which the valuation date is before May 1, 2009.
              (a) Valuation of charitable remainder interests for which the valuation date is before January 1, 1952. There was no provision for the qualification of a charitable remainder unitrust under section 664 until 1969. See § 20.2031-7A(a) of this chapter (Estate Tax Regulations) for the determination of the present value of a charitable interest for which the valuation date is before January 1, 1952.
              (b) Valuation of charitable remainder interests for which the valuation date is after December 31, 1951, and before January 1, 1971. No charitable deduction is allowable for a transfer to a unitrust for which the valuation date is after the effective dates of the Tax Reform Act of 1969 unless the unitrust meets the requirements of section 664. See § 20.2031-7A(b) of this chapter (Estate Tax Regulations) for the determination of the present value of a charitable remainder interest for which the valuation date is after December 31, 1951, and before January 1, 1971.
              (c) Valuation of charitable remainder unitrusts having certain payout sequences for transfers for which the valuation date is after December 31, 1970, and before December 1, 1983. For the determination of the present value of a charitable remainder unitrust for which the valuation date is after December 31, 1970, and before December 1, 1983, see § 20.2031-7A(c) of this chapter (Estate Tax Regulations) and former § 1.664-4(d) (as contained in the 26 CFR part 1 edition revised as of April 1, 1994).
              (d) Valuation of charitable remainder unitrusts having certain payout sequences for transfers for which the valuation date is after November 30, 1983, and before May 1, 1989—(1) In general. Except as otherwise provided in paragraph (d)(2) of this section, in the case of transfers made after November 30, 1983, for which the valuation date is before May 1, 1989, the present value of a remainder interest that is dependent on a term of years or the termination of the life of one individual is determined under paragraphs (d)(3) through (d)(6) of this section, provided that the amount of the payout as of any payout date during any taxable year of the trust is not larger than the amount that the trust could distribute on such date under § 1.664-3(a)(1)(v) if the taxable year of the trust were to end on such date. The present value of the remainder interest in the trust is determined by computing the adjusted payout rate (as defined in paragraph (d)(3) of this section) and following the procedure outlined in paragraph (d)(4) or (d)(5) of this section, whichever is applicable. The present value of a remainder interest that is dependent on a term of years is computed under paragraph (d)(4) of this section. The present value of a remainder interest that is dependent on the termination of the life of one individual is computed under paragraph (d)(5) of this section. See paragraph (d)(2) of this section for testamentary transfers for which the valuation date is after November 30, 1983, and before August 9, 1984.
              (2) Rules for determining the present value for testamentary transfers where the decedent dies after November 30, 1983, and before August 9, 1984. For purposes of section 2055 or 2106, if—
              (i) The decedent dies after November 30, 1983, and before August 9, 1984; or
              (ii) On December 1, 1983, the decedent was mentally incompetent so that the disposition of the property could not be changed, and the decedent died after November 30, 1983, without regaining competency to dispose of the decedent's property, or died within 90 days of the date on which the decedent first regained competency, the present value determined under this section of a remainder interest is determined in accordance with paragraph (d)(1) and paragraphs (d)(3) through (d)(6) of this section, or § 1.664-4A(c), at the option of the taxpayer.
              (3) Adjusted payout rate. The adjusted payout rate is determined by multiplying the fixed percentage described in paragraph (a)(1)(i)(a) of § 1.664-3 by the figure in column (2) of Table F(1) which describes the payout sequence of the trust opposite the number in column (1) of Table F(1) which corresponds to the number of months by which the valuation date for the first full taxable year of the trust precedes the first payout date for such taxable year. If the governing instrument does not prescribe when the distribution shall be made during the taxable year of the trust, see § 1.664-4(a). In the case of a trust having a payout sequence for which no figures have been provided by Table F (1) and in the case of a trust which determines the fair market value of the trust assets by taking the average of valuations on more than one date during the taxable year, see § 1.664-4(b).
              (4) Period is a term of years. If the period described in § 1.664-3(a)(5) is a term of years, the factor which is used in determining the present value of the remainder interest is the factor under the appropriate adjusted payout rate in Table D in § 1.664-4(e)(6) that corresponds to the number of years in the term. If the adjusted payout rate is an amount which is between adjusted payout rates for which factors are provided in Table D, a linear interpolation must be made. The present value of the remainder interest is determined by multiplying the net fair market value (as of the appropriate valuation date) of the property placed in trust by the factor determined under this paragraph (d)(4). For purposes of this section, the term appropriate valuation date means the date on which the property is transferred to the trust by the donor except that, for purposes of section 2055 or 2106, it means the date of death unless the alternate valuation date is elected in accordance with section 2032 and the regulations thereunder in which event it means the alternate valuation date. If the adjusted payout rate is greater than 14 percent, see § 1.664-4(b). The application of this paragraph (d)(4) may be illustrated by the following example:

                Example.
                D transfers $100,000 to a charitable remainder unitrust on January 1, 1985. The trust instrument requires that the trust pay to D semiannually (on June 30 and December 31) 10 percent of the fair market value of the trust assets as of June 30th for a term of 15 years. The adjusted payout rate is 9.767 percent (10% × 0.976731). The present value of the remainder interest is $21,404.90, computed as follows:

                    Factor at 9.6 percent for 15 years
                    0.220053

                    Factor at 9.8 percent for 15 years
                    .212862

                    Difference
                    .007191

                  EC14NO91.134

                9.767% − 9.6 ÷ 0.2% == ÷ .007191

                X === .006004

                    Factor at 9.6 percent for 15 years
                    0.220053

                    Less: X
                    .006004

                    Interpolated factor
                    .214049

                    Present value of remainder interest = $100,000 × 0.214049 = $21,404.90

              (5) Period is the life of one individual. If the period described in paragraph (a)(5) of § 1.664-3 is the life of one individual, the factor that is used in determining the present value of the remainder interest is the factor under the appropriate adjusted payout rate in column (2) of Table E in paragraph (d)(6) of this section opposite the number in column (1) that corresponds to the age of the individual whose life measures the period. For purposes of the computations described in this paragraph (b)(5), the age of an individual is to be taken as the age of that individual at the individual's nearest birthday. If the adjusted payout rate is an amount which is between adjusted payout rates for which factors are provided for in Table E, a linear interpolation must be made. The present value of the remainder interest is determined by multiplying the net fair market value (as of the appropriate valuation date) of the property placed in trust by the factor determined under this paragraph (b)(5). If the adjusted payout rate is greater than 14 percent, see § 1.664-4(b). The application of this paragraph may be illustrated by the following example:

                Example.
                A, who will be 50 years old on April 15, 1985, transfers $100,000 to a charitable remainder unitrust on January 1, 1985. The trust instrument requires that the trust pay to A at the end of each taxable year of the trust 10 percent of the fair market value of the trust assets as of the beginning of each taxable year of the trust. The adjusted payout rate is 9.091 percent (10 percent × .909091). The present value of the remainder interest is $15,259.00 computed as follows:

                    Factor at 9 percent at age 50
                    0.15472

                    Factor at 9.2 percent at age 50
                    .15003

                    Difference
                    .00469

                    9.091% − 9% ÷ 0.2% = X ÷ 0.00469

                    x = 0.00213

                    Factor at 9 percent at age 50
                    .15472

                    Less: X
                    .00213

                    Interpolated factor
                    .15259

                    Present value of remainder interest =

                    $100,000 × 0.15259 = $15,259.00

              (6) Actuarial tables for transfers for which the valuation date is after November 30, 1983, and before May 1, 1989. Table D in § 1.664-4(e)(6) and the following tables shall be used in the application of the provisions of this section:

                Table E

                  Table E—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Unitrust Having the Adjusted Payout Rate Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Adjusted payout rate
                  2.2%
                  2.4%
                  2.6%
                  2.8%
                  3.0%

                  0
                  .23253
                  .20635
                  .18364
                  .16394
                  .14683

                  1
                  .22196
                  .19506
                  .17170
                  .15139
                  .13372

                  2
                  .22597
                  .19884
                  .17523
                  .15468
                  .13676

                  3
                  .23039
                  .20304
                  .17920
                  .15840
                  .14024

                  4
                  .23503
                  .20747
                  .18340
                  .16237
                  .14397

                  5
                  .23988
                  .21211
                  .18783
                  .16656
                  .14793

                  6
                  .24489
                  .21693
                  .19243
                  .17094
                  .15207

                  7
                  .25004
                  .22189
                  .19718
                  .17546
                  .15637

                  8
                  .25534
                  .22701
                  .20209
                  .18016
                  .16084

                  9
                  .26080
                  .23230
                  .20718
                  .18503
                  .16549

                  10
                  .26640
                  .23774
                  .21243
                  .19008
                  .17031

                  11
                  .27217
                  .24335
                  .21786
                  .19530
                  .17532

                  12
                  .27807
                  .24911
                  .22344
                  .20068
                  .18049

                  13
                  .28407
                  .25497
                  .22913
                  .20618
                  .18579

                  14
                  .29013
                  .26089
                  .23489
                  .21175
                  .19115

                  15
                  .29621
                  .26684
                  .24067
                  .21735
                  .19655

                  16
                  .30229
                  .27279
                  .24647
                  .22296
                  .20196

                  17
                  .30838
                  .27876
                  .25228
                  .22859
                  .20739

                  18
                  .31451
                  .28477
                  .25813
                  .23427
                  .21287

                  19
                  .32070
                  .29085
                  .26407
                  .24003
                  .21844

                  20
                  .32699
                  .29704
                  .27012
                  .24591
                  .22413

                  21
                  .33339
                  .30335
                  .27629
                  .25192
                  .22996

                  22
                  .33991
                  .30977
                  .28259
                  .25807
                  .23592

                  23
                  .34655
                  .31634
                  .28904
                  .26437
                  .24205

                  24
                  .35334
                  .32306
                  .29566
                  .27085
                  .24836

                  25
                  .36031
                  .32998
                  .30248
                  .27754
                  .25490

                  26
                  .36746
                  .33710
                  .30952
                  .28446
                  .26167

                  27
                  .37481
                  .34443
                  .31678
                  .29161
                  .26869

                  28
                  .38236
                  .35197
                  .32427
                  .29901
                  .27596

                  29
                  .39006
                  .35968
                  .33194
                  .30660
                  .28344

                  30
                  .39793
                  .36757
                  .33980
                  .31439
                  .29113

                  31
                  .40594
                  .37561
                  .34783
                  .32237
                  .29902

                  32
                  .41410
                  .38383
                  .35605
                  .33054
                  .30711

                  33
                  .42240
                  .39220
                  .36444
                  .33890
                  .31541

                  34
                  .43084
                  .40072
                  .37299
                  .34744
                  .32389

                  35
                  .43942
                  .40941
                  .38172
                  .35617
                  .33258

                  36
                  .44813
                  .41824
                  .39061
                  .36508
                  .34146

                  37
                  .45696
                  .42720
                  .39966
                  .37416
                  .35053

                  38
                  .46591
                  .43630
                  .40885
                  .38339
                  .35977

                  39
                  .47496
                  .44552
                  .41818
                  .39278
                  .36917

                  40
                  .48412
                  .45486
                  .42765
                  .40232
                  .37875

                  41
                  .49338
                  .46432
                  .43725
                  .41201
                  .38849

                  42
                  .50275
                  .47391
                  .44700
                  .42187
                  .39840

                  43
                  .51221
                  .48360
                  .45686
                  .43186
                  .40847

                  44
                  .52175
                  .49340
                  .46685
                  .44199
                  .41870

                  45
                  .53136
                  .50327
                  .47693
                  .45223
                  .42905

                  46
                  .54104
                  .51323
                  .48712
                  .46259
                  .43953

                  47
                  .55077
                  .52327
                  .49739
                  .47305
                  .45013

                  48
                  .56058
                  .53339
                  .50777
                  .48363
                  .46087

                  49
                  .57043
                  .54358
                  .51823
                  .49432
                  .47173

                  50
                  .58035
                  .55384
                  .52879
                  .50510
                  .48271

                  51
                  .59029
                  .56415
                  .53940
                  .51597
                  .49379

                  52
                  .60027
                  .57450
                  .55008
                  .52692
                  .50496

                  53
                  .61026
                  .58488
                  .56080
                  .53793
                  .51620

                  54
                  .62025
                  .59528
                  .57154
                  .54897
                  .52750

                  55
                  .63022
                  .60567
                  .58230
                  .56004
                  .53884

                  56
                  .64018
                  .61606
                  .59306
                  .57113
                  .55021

                  57
                  .65012
                  .62644
                  .60384
                  .58225
                  .56163

                  58
                  .66004
                  .63681
                  .61461
                  .59337
                  .57306

                  59
                  .66993
                  .64717
                  .62538
                  .60452
                  .58453

                  60
                  .67979
                  .65751
                  .63615
                  .61567
                  .59602

                  61
                  .68963
                  .66784
                  .64692
                  .62683
                  .60754

                  62
                  .69944
                  .67815
                  .65769
                  .63801
                  .61908

                  63
                  .70922
                  .68844
                  .66843
                  .64918
                  .63063

                  64
                  .71893
                  .69868
                  .67915
                  .66032
                  .64217

                  65
                  .72859
                  .70886
                  .68982
                  .67144
                  .65369

                  66
                  .73817
                  .71897
                  .70043
                  .68250
                  .66517

                  67
                  .74766
                  .72901
                  .71096
                  .69350
                  .67660

                  68
                  .75706
                  .73896
                  .72142
                  .70443
                  .68796

                  69
                  .76637
                  .74882
                  .73181
                  .71530
                  .69928

                  70
                  .77559
                  .75861
                  .74212
                  .72610
                  .71053

                  71
                  .78475
                  .76833
                  .75237
                  1.73685
                  1.72176

                  72
                  .79383
                  .77799
                  .76257
                  .74756
                  .73294

                  73
                  .80279
                  .78753
                  .77266
                  .75816
                  .74403

                  74
                  .81158
                  .79689
                  .78256
                  .76858
                  .75494

                  75
                  .82013
                  .80602
                  .79223
                  .77876
                  .76561

                  76
                  .82844
                  .81488
                  .80163
                  .78867
                  .77599

                  77
                  .83648
                  .82347
                  .81075
                  .79829
                  .78609

                  78
                  .84428
                  .83182
                  .81961
                  .80764
                  .79592

                  79
                  .85187
                  .83994
                  .82824
                  .81677
                  .80552

                  80
                  .85927
                  .84787
                  .83668
                  .82569
                  .81491

                  81
                  .86645
                  .85556
                  .84487
                  .83437
                  .82404

                  82
                  .87336
                  .86299
                  .85278
                  .84275
                  .83288

                  83
                  .88003
                  .87014
                  .86042
                  .85084
                  .84142

                  84
                  .88648
                  .87708
                  .86782
                  .85870
                  .84971

                  85
                  .89273
                  .88381
                  .87501
                  .86633
                  .85778

                  86
                  .89868
                  .89021
                  .88185
                  .87360
                  .86547

                  87
                  .90417
                  .89613
                  .88818
                  .88034
                  .87260

                  88
                  .90923
                  .90158
                  .89402
                  .88655
                  .87917

                  89
                  .91396
                  .90668
                  .89948
                  .89237
                  .88533

                  90
                  .91849
                  .91156
                  .90471
                  .89794
                  .89124

                  91
                  .92278
                  .91620
                  .90968
                  .90324
                  .89686

                  92
                  .92673
                  .92046
                  .91426
                  .90812
                  .90204

                  93
                  .93027
                  .92429
                  .91837
                  .91251
                  .90670

                  94
                  .93341
                  .92768
                  .92201
                  .91639
                  .91082

                  95
                  .93612
                  .93062
                  .92516
                  .91976
                  .91440

                  96
                  .93841
                  .93309
                  .92782
                  .92259
                  .91740

                  97
                  .94044
                  .93529
                  .93018
                  .92512
                  .92009

                  98
                  .94223
                  .93723
                  .93226
                  .92733
                  .92244

                  99
                  .94392
                  .93905
                  .93421
                  .92942
                  .92466

                  100
                  .94559
                  .94086
                  .93615
                  .93149
                  .92685

                  101
                  .94709
                  .94248
                  .93790
                  .93334
                  .92882

                  102
                  .94873
                  .94424
                  .93979
                  .93536
                  .93096

                  103
                  .95077
                  .94645
                  .94216
                  .93789
                  .93365

                  104
                  .95278
                  .94862
                  .94449
                  .94037
                  .93628

                  105
                  .95570
                  .95178
                  .94787
                  .94399
                  .94012

                  106
                  .96017
                  .95662
                  .95309
                  .94957
                  .94607

                  107
                  .96616
                  .96313
                  .96010
                  .95709
                  .95408

                  108
                  .97515
                  .97291
                  .97067
                  .96843
                  .96620

                  109
                  .98900
                  .98800
                  .98700
                  .98600
                  .98500

                Table E

                  Table E—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Unitrust Having the Adjusted Payout Rate Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Years
                  (2) Adjusted payout rate
                  3.2%
                  3.4%
                  3.6%
                  3.8%
                  4.0%

                  0
                  .13196
                  .11901
                  .10774
                  .09791
                  .08933

                  1
                  .11834
                  .10493
                  .09324
                  .08303
                  .07410

                  2
                  .12113
                  .10749
                  .09557
                  .08514
                  .07601

                  3
                  .12437
                  .11050
                  .09835
                  .08770
                  .07837

                  4
                  .12787
                  .11376
                  .10138
                  .09052
                  .08098

                  5
                  .13159
                  .11725
                  .10465
                  .09357
                  .08382

                  6
                  .13549
                  .12092
                  .10810
                  .09680
                  .08684

                  7
                  .13956
                  .12476
                  .11171
                  .10019
                  .09002

                  8
                  .14380
                  .12877
                  .11549
                  .10376
                  .09337

                  9
                  .14822
                  .13296
                  .11946
                  .10751
                  .09691

                  10
                  .15282
                  .13734
                  .12361
                  .11144
                  .10063

                  11
                  .15761
                  .14190
                  .12795
                  .11556
                  .10454

                  12
                  .16257
                  .14663
                  .13247
                  .11986
                  .10863

                  13
                  .16764
                  .15149
                  .13711
                  .12428
                  .12283

                  14
                  .17279
                  .15643
                  .14182
                  .12878
                  .11712

                  15
                  .17798
                  .16140
                  .14657
                  .13331
                  .12143

                  16
                  .18318
                  .16638
                  .15133
                  .13785
                  .12576

                  17
                  .18840
                  .17138
                  .15611
                  .14241
                  .13010

                  18
                  .19367
                  .17643
                  .16094
                  .14702
                  .13449

                  19
                  .19903
                  .18157
                  .16586
                  .15172
                  .13897

                  20
                  .20452
                  .18685
                  .17092
                  .15655
                  .14358

                  21
                  .21014
                  .19226
                  .17612
                  .16153
                  .14833

                  22
                  .21591
                  .19783
                  .18146
                  .16665
                  .15324

                  23
                  .22185
                  .20356
                  .18698
                  .17195
                  .15832

                  24
                  .22798
                  .20949
                  .19270
                  .17746
                  .16361

                  25
                  .23434
                  .21565
                  .19866
                  .18321
                  .16914

                  26
                  .24094
                  .22207
                  .20489
                  .18922
                  .17494

                  27
                  .24780
                  .22875
                  .21138
                  .19551
                  .18102

                  28
                  .25492
                  .23570
                  .21814
                  .20208
                  .18739

                  29
                  .26226
                  .24288
                  .22514
                  .20889
                  .19400

                  30
                  .26982
                  .25029
                  .23239
                  .21596
                  .20088

                  31
                  .27759
                  .25792
                  .23985
                  .22324
                  .20798

                  32
                  .28557
                  .26577
                  .24755
                  .23078
                  .21533

                  33
                  .29377
                  .27385
                  .25548
                  .23855
                  .22293

                  34
                  .30217
                  .28214
                  .26364
                  .24656
                  .23077

                  35
                  .31079
                  .29065
                  .27203
                  .25481
                  .23887

                  36
                  .31961
                  .29939
                  .28065
                  .26330
                  .24721

                  37
                  .32863
                  .30833
                  .28950
                  .27202
                  .25579

                  38
                  .33784
                  .31747
                  .29855
                  .28096
                  .26460

                  39
                  .34722
                  .32680
                  .30780
                  .29011
                  .27363

                  40
                  .35679
                  .33633
                  .31727
                  .29948
                  .28290

                  41
                  .36654
                  .34606
                  .32693
                  .30908
                  .29239

                  42
                  .37648
                  .35599
                  .33683
                  .31890
                  .30213

                  43
                  .38659
                  .36610
                  .34691
                  .32894
                  .31209

                  44
                  .39687
                  .37640
                  .35720
                  .33918
                  .32227

                  45
                  .40728
                  .38685
                  .36765
                  .34961
                  .33265

                  46
                  .41785
                  .39746
                  .37828
                  .36023
                  .34323

                  47
                  .42856
                  .40823
                  .38908
                  .37103
                  .35400

                  48
                  .43941
                  .41917
                  .40006
                  .38202
                  .36499

                  49
                  .45040
                  .43025
                  .41121
                  .39320
                  .37617

                  50
                  .46153
                  .44149
                  .42252
                  .40457
                  .38756

                  51
                  .47277
                  .45286
                  .43398
                  .41609
                  .39911

                  52
                  .48412
                  .46435
                  .44558
                  .42776
                  .41084

                  53
                  .49556
                  .47595
                  .45731
                  .43958
                  .42272

                  54
                  .50707
                  .48763
                  .46913
                  .45151
                  .43473

                  55
                  .51864
                  .49939
                  .48104
                  .46354
                  .44685

                  56
                  .53026
                  .51121
                  .49303
                  .47567
                  .45908

                  57
                  .54192
                  .52310
                  .50510
                  .48789
                  .47143

                  58
                  .55363
                  .53503
                  .51723
                  .50019
                  .48387

                  59
                  .56538
                  .54703
                  .52945
                  .51258
                  .49642

                  60
                  .57717
                  .55909
                  .54173
                  .52506
                  .50906

                  61
                  .58901
                  .57120
                  .55408
                  .53763
                  .52181

                  62
                  .60087
                  .58336
                  .56650
                  .55028
                  .53466

                  63
                  .61277
                  .59556
                  .57898
                  .56300
                  .54760

                  64
                  .62467
                  .60778
                  .59149
                  .57577
                  .56060

                  65
                  .63655
                  .62000
                  .60402
                  .58857
                  .57365

                  66
                  .64842
                  .63221
                  .61654
                  .60139
                  .58672

                  67
                  .66023
                  .64439
                  .62905
                  .61420
                  .59980

                  68
                  .67200
                  .65653
                  .64154
                  .62699
                  .61289

                  69
                  .68373
                  .66865
                  .65400
                  .63978
                  .62598

                  70
                  .69541
                  .68072
                  .66645
                  .65257
                  .63908

                  71
                  .70708
                  .69279
                  .67890
                  .66538
                  .65222

                  72
                  .71870
                  .70484
                  .69134
                  .67819
                  .66538

                  73
                  .73025
                  .71682
                  .70372
                  .69095
                  .67850

                  74
                  .74163
                  .72863
                  .71595
                  .70356
                  .69147

                  75
                  .75275
                  .74019
                  .72792
                  .71593
                  .70421

                  76
                  .76360
                  .75147
                  .73962
                  .72802
                  .71667

                  77
                  .77415
                  .76246
                  .75102
                  .73981
                  .72883

                  78
                  .78443
                  .77318
                  .76214
                  .75133
                  .74073

                  79
                  .79448
                  .78365
                  .77303
                  .76261
                  .75238

                  80
                  .80432
                  .79392
                  .78371
                  .77369
                  .76384

                  81
                  .81390
                  .80393
                  .79413
                  .78450
                  .77504

                  82
                  .82317
                  .81362
                  .80423
                  .79499
                  .78590

                  83
                  .83214
                  .82301
                  .81402
                  .80517
                  .79645

                  84
                  .84086
                  .83214
                  .82355
                  .81508
                  .80674

                  85
                  .84935
                  .84104
                  .83284
                  .82476
                  .81679

                  86
                  .85745
                  .84953
                  .84172
                  .83401
                  .82640

                  87
                  .86496
                  .85741
                  .84996
                  .84260
                  .83533

                  88
                  .87189
                  .86468
                  .85757
                  .85054
                  .84359

                  89
                  .87838
                  .87150
                  .86471
                  .85799
                  .85135

                  90
                  .88461
                  .87806
                  .87157
                  .86516
                  .85881

                  91
                  .89055
                  .88430
                  .87812
                  .87200
                  .86594

                  92
                  .89602
                  .89006
                  .88416
                  .87831
                  .87252

                  93
                  .90094
                  .89524
                  .88959
                  .88400
                  .87846

                  94
                  .90530
                  .89983
                  .89441
                  .88904
                  .88372

                  95
                  .90908
                  .90381
                  .89359
                  .89341
                  .88828

                  96
                  .91226
                  .90716
                  .90211
                  .89709
                  .89212

                  97
                  .91510
                  .91015
                  .90525
                  .90038
                  .89555

                  98
                  .91759
                  .91277
                  .90800
                  .90326
                  .89855

                  99
                  .91993
                  .91524
                  .91058
                  .90596
                  .90137

                  100
                  .92225
                  .91768
                  .91315
                  .90865
                  .90417

                  101
                  .92433
                  .91987
                  .91544
                  .91104
                  .90667

                  102
                  .92659
                  .92225
                  .91793
                  .91364
                  .90938

                  103
                  .92943
                  .92524
                  .92107
                  .91692
                  .91280

                  104
                  .93221
                  .92816
                  .92413
                  .92012
                  .91614

                  105
                  .93627
                  .93244
                  .92863
                  .92483
                  .92105

                  106
                  .94257
                  .93909
                  .93562
                  .93217
                  .92872

                  107
                  .95107
                  .94808
                  .94509
                  .94211
                  .93914

                  108
                  .96396
                  .96173
                  .95950
                  .95728
                  .95505

                  109
                  .98400
                  .98300
                  .98200
                  .98100
                  .98000

                Table E

                  Table E—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Unitrust Having the Adjusted Payout Rate Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Adjusted payout rate
                  4.2%
                  4.4%
                  4.6%
                  4.8%
                  5.0%

                  0
                  .08183
                  .07527
                  .06952
                  .06448
                  .06005

                  1
                  .06629
                  .05945
                  .05344
                  .04817
                  .04354

                  2
                  .06801
                  .06098
                  .05481
                  .04939
                  .04460

                  3
                  .07017
                  .06297
                  .05663
                  .05104
                  .04611

                  4
                  .07259
                  .06520
                  .05868
                  .05294
                  .04786

                  5
                  .07523
                  .06765
                  .06096
                  .05505
                  .04982

                  6
                  .07805
                  .07029
                  .06342
                  .05734
                  .05195

                  7
                  .08103
                  .07307
                  .06603
                  .05978
                  .05423

                  8
                  .08418
                  .07603
                  .06880
                  .06238
                  .05666

                  9
                  .08752
                  .07917
                  .07175
                  .06516
                  .05928

                  10
                  .09103
                  .08249
                  .07488
                  .06811
                  .06206

                  11
                  .09473
                  .08600
                  .07820
                  .07125
                  .06503

                  12
                  .09861
                  .08968
                  .08169
                  .07456
                  .06817

                  13
                  .10261
                  .09348
                  .08530
                  .07799
                  .07142

                  14
                  .10669
                  .09735
                  .08899
                  .08148
                  .07474

                  15
                  .11080
                  .10126
                  .09269
                  .08500
                  .07808

                  16
                  .11491
                  .10516
                  .09640
                  .08852
                  .08142

                  17
                  .11903
                  .10908
                  .10012
                  .09204
                  .08475

                  18
                  .12321
                  .11304
                  .10387
                  .09560
                  .08812

                  19
                  .12747
                  .11709
                  .10771
                  .09923
                  .09156

                  20
                  .13186
                  .12126
                  .11168
                  .10300
                  .09513

                  21
                  .13639
                  .12558
                  .11578
                  .10690
                  .09883

                  22
                  .14108
                  .13005
                  .12004
                  .11094
                  .10268

                  23
                  .14594
                  .13469
                  .12446
                  .11516
                  .10669

                  24
                  .15101
                  .13954
                  .12910
                  .11958
                  .11091

                  25
                  .15632
                  .14464
                  .13398
                  .12426
                  .11537

                  26
                  .16191
                  .15001
                  .13914
                  .12920
                  .12011

                  27
                  .16778
                  .15567
                  .14459
                  .13444
                  .12514

                  28
                  .17394
                  .16162
                  .15032
                  .13997
                  .13046

                  29
                  .18035
                  .16782
                  .15632
                  .14575
                  .13604

                  30
                  .18702
                  .17429
                  .16259
                  .15181
                  .14189

                  31
                  .19393
                  .18100
                  .16909
                  .15811
                  .14799

                  32
                  .20109
                  .18797
                  .17586
                  .16468
                  .15436

                  33
                  .20851
                  .19520
                  .18290
                  .17152
                  .16100

                  34
                  .21618
                  .20268
                  .19018
                  .17861
                  .16789

                  35
                  .22411
                  .21043
                  .19775
                  .18599
                  .17508

                  36
                  .23228
                  .21844
                  .20558
                  .19363
                  .18253

                  37
                  .24071
                  .22670
                  .21367
                  .20154
                  .19026

                  38
                  .24938
                  .23521
                  .22201
                  .20971
                  .19825

                  39
                  .25827
                  .24396
                  .23060
                  .21814
                  .20650

                  40
                  .26741
                  .25295
                  .23945
                  .22682
                  .21502

                  41
                  .27679
                  .26220
                  .24855
                  .23577
                  .22381

                  42
                  .28642
                  .27172
                  .25793
                  .24501
                  .23289

                  43
                  .29629
                  .28147
                  .26756
                  .25450
                  .24224

                  44
                  .30639
                  .29147
                  .27745
                  .26426
                  .25186

                  45
                  .31669
                  .30169
                  .28756
                  .27426
                  .26173

                  46
                  .32722
                  .31213
                  .29791
                  .28450
                  .27185

                  47
                  .33795
                  .32280
                  .30849
                  .29498
                  .28222

                  48
                  .34890
                  .33370
                  .31932
                  .30573
                  .29287

                  49
                  .36007
                  .34482
                  .33039
                  .31672
                  .30377

                  50
                  .37144
                  .35617
                  .34170
                  .32797
                  .31494

                  51
                  .38301
                  .36773
                  .35322
                  .33944
                  .32635

                  52
                  .39476
                  .37948
                  .36495
                  .35113
                  .33799

                  53
                  .40668
                  .39141
                  .37688
                  .36304
                  .34986

                  54
                  .41874
                  .40350
                  .38897
                  .37512
                  .36191

                  55
                  .43093
                  .41574
                  .40123
                  .38739
                  .37416

                  56
                  .44324
                  .42811
                  .41364
                  .39980
                  .38657

                  57
                  .45568
                  .44062
                  .42620
                  .41240
                  .39918

                  58
                  .46823
                  .45325
                  .43890
                  .42514
                  .41194

                  59
                  .48091
                  .46603
                  .45175
                  .43805
                  .42489

                  60
                  .49370
                  .47893
                  .46475
                  .45112
                  .43802

                  61
                  .50661
                  .49198
                  .47790
                  .46436
                  .45133

                  62
                  .51963
                  .50515
                  .49120
                  .47776
                  .46481

                  63
                  .53275
                  .51844
                  .50463
                  .49131
                  .47846

                  64
                  .54596
                  .53182
                  .51817
                  .50498
                  .49225

                  65
                  .55922
                  .54528
                  .53180
                  .51877
                  .50616

                  66
                  .57253
                  .55880
                  .54551
                  .53264
                  .52018

                  67
                  .58586
                  .57235
                  .55926
                  .54657
                  .53427

                  68
                  .59921
                  .58594
                  .57306
                  .56057
                  .54845

                  69
                  .61258
                  .59956
                  .58692
                  .57463
                  .56270

                  70
                  .62597
                  .61322
                  .60082
                  .58877
                  .57704

                  71
                  .63941
                  .62695
                  .61481
                  .60300
                  .59149

                  72
                  .65289
                  .64073
                  .62887
                  .61731
                  .60605

                  73
                  .66635
                  .65449
                  .64293
                  .63165
                  .62064

                  74
                  .67976
                  .66814
                  .65688
                  .64588
                  .63514

                  75
                  .69275
                  .68156
                  .67061
                  .65990
                  .64944

                  76
                  .70557
                  .69470
                  .68407
                  .67366
                  .66348

                  77
                  .71809
                  .70756
                  .69724
                  .68714
                  .67724

                  78
                  .73033
                  .72014
                  .71015
                  .70036
                  .69075

                  79
                  .74235
                  .73251
                  .72284
                  .71336
                  .70405

                  80
                  .75417
                  .74468
                  .73535
                  .72619
                  .71718

                  81
                  .76573
                  .75659
                  .74759
                  .73875
                  .73006

                  82
                  .77696
                  .76816
                  .75951
                  .75099
                  .74261

                  83
                  .78787
                  .77942
                  .77110
                  .76291
                  .75484

                  84
                  .79852
                  .79042
                  .78243
                  .77457
                  .76681

                  85
                  .80893
                  .80118
                  .79353
                  .78599
                  .77856

                  86
                  .81889
                  .81148
                  .80417
                  .79695
                  .78983

                  87
                  .82816
                  .82107
                  .81408
                  .80716
                  .80034

                  88
                  .83673
                  .82994
                  .82324
                  .81662
                  .81007

                  89
                  .84478
                  .83828
                  .83186
                  .82551
                  .81923

                  90
                  .85253
                  .84632
                  .84018
                  .83410
                  .82808

                  91
                  .85994
                  .85401
                  .84813
                  .84232
                  .83656

                  92
                  .86679
                  .86111
                  .85549
                  .84993
                  .84441

                  93
                  .87296
                  .86752
                  .86213
                  .85679
                  .85150

                  94
                  .87844
                  .87321
                  .86803
                  .86289
                  .85780

                  95
                  .88319
                  .87815
                  .87314
                  .86818
                  .86327

                  96
                  .88719
                  .88230
                  .87745
                  .87264
                  .86787

                  97
                  .89076
                  .88601
                  .88129
                  .87661
                  .87197

                  98
                  .89388
                  .88925
                  .88465
                  .88009
                  .87556

                  99
                  .89682
                  .89230
                  .88781
                  .88336
                  .87894

                  100
                  .89973
                  .89533
                  .89095
                  .88660
                  .88228

                  101
                  .90233
                  .89802
                  .89374
                  .88948
                  .88526

                  102
                  .90515
                  .90094
                  .89676
                  .89260
                  .88848

                  103
                  .90871
                  .90464
                  .90059
                  .89656
                  .89256

                  104
                  .91217
                  .90823
                  .90431
                  .90040
                  .89652

                  105
                  .91729
                  .91354
                  .90981
                  .90610
                  .90240

                  106
                  .92529
                  .92187
                  .91846
                  .91507
                  .91169

                  107
                  .93617
                  .93322
                  .93027
                  .92732
                  .92439

                  108
                  .95283
                  .95062
                  .94840
                  .94619
                  .94398

                  109
                  .97900
                  .97800
                  .97700
                  .97600
                  .97500

                Table E

                  Table E—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Unitrust Having the Adjusted Payout Rate Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Adjusted payout rate
                  5.2%
                  5.4%
                  5.6%
                  5.8%
                  6.0%

                  0
                  .05615
                  .05272
                  .04969
                  .04701
                  .04464

                  1
                  .03945
                  .03585
                  .03268
                  .02986
                  .02737

                  2
                  .04039
                  .03667
                  .03337
                  .03046
                  .02787

                  3
                  .04176
                  .03791
                  .03450
                  .03147
                  .02879

                  4
                  .04336
                  .03938
                  .03585
                  .03272
                  .02993

                  5
                  .04518
                  .04107
                  .03741
                  .03416
                  .03127

                  6
                  .04717
                  .04292
                  .03914
                  .03577
                  .03276

                  7
                  .04929
                  .04490
                  .04099
                  .03750
                  .03438

                  8
                  .05158
                  .04704
                  .04300
                  .03938
                  .03615

                  9
                  .05404
                  .04936
                  .04518
                  .04143
                  .03808

                  10
                  .05666
                  .05183
                  .04751
                  .04364
                  .04016

                  11
                  .05947
                  .05449
                  .05003
                  .04602
                  .04242

                  12
                  .06245
                  .05731
                  .05271
                  .04856
                  .04484

                  13
                  .06554
                  .06025
                  .05549
                  .05121
                  .04735

                  14
                  .06869
                  .06324
                  .05834
                  .05391
                  .04992

                  15
                  .07186
                  .06625
                  .06119
                  .05662
                  .05250

                  16
                  .07502
                  .06924
                  .06403
                  .05931
                  .05504

                  17
                  .07817
                  .07223
                  .06685
                  .06199
                  .05757

                  18
                  .08136
                  .07524
                  .06970
                  .06468
                  .06012

                  19
                  .08462
                  .07832
                  .07261
                  .06743
                  .06272

                  20
                  .08800
                  .08152
                  .07564
                  .07029
                  .06542

                  21
                  .09151
                  .08485
                  .07879
                  .07327
                  .06824

                  22
                  .09516
                  .08831
                  .08207
                  .07638
                  .07119

                  23
                  .09897
                  .09193
                  .08551
                  .07964
                  .07428

                  24
                  .10299
                  .09576
                  .08915
                  .08310
                  .07756

                  25
                  .10725
                  .09982
                  .09302
                  .08679
                  .08108

                  26
                  .11179
                  .10416
                  .09717
                  .09075
                  .08486

                  27
                  .11661
                  .10878
                  .10160
                  .09500
                  .08892

                  28
                  .12173
                  .11370
                  .10632
                  .09953
                  .09328

                  29
                  .12710
                  .11888
                  .11130
                  .10432
                  .09788

                  30
                  .13276
                  .12433
                  .11656
                  .10938
                  .10276

                  31
                  .13865
                  .13002
                  .12205
                  .11469
                  .10787

                  32
                  .14482
                  .13599
                  .12783
                  .12026
                  .11326

                  33
                  .15126
                  .14223
                  .13387
                  .12612
                  .11892

                  34
                  .15796
                  .14874
                  .14018
                  .13223
                  .12485

                  35
                  .16494
                  .15553
                  .14678
                  .13864
                  .13107

                  36
                  .17221
                  .16260
                  .15366
                  .14533
                  .13757

                  37
                  .17975
                  .16996
                  .16082
                  .15231
                  .14435

                  38
                  .18756
                  .17758
                  .16826
                  .15955
                  .15142

                  39
                  .19563
                  .18547
                  .17597
                  .16708
                  .15875

                  40
                  .20397
                  .19364
                  .18395
                  .17488
                  .16638

                  41
                  .21259
                  .20209
                  .19223
                  .18298
                  .17430

                  42
                  .22152
                  .21084
                  .20082
                  .19140
                  .18254

                  43
                  .23071
                  .21988
                  .20969
                  .20010
                  .19107

                  44
                  .24019
                  .22920
                  .21885
                  .20910
                  .19991

                  45
                  .24992
                  .23878
                  .22828
                  .21837
                  .20902

                  46
                  .25991
                  .24864
                  .23799
                  .22793
                  .21842

                  47
                  .27016
                  .25876
                  .24798
                  .23777
                  .22812

                  48
                  .28070
                  .26918
                  .25826
                  .24792
                  .23812

                  49
                  .29150
                  .27987
                  .26883
                  .25837
                  .24843

                  50
                  .30258
                  .29084
                  .27970
                  .26911
                  .25905

                  51
                  .31391
                  .30208
                  .29084
                  .28014
                  .26996

                  52
                  .32548
                  .31358
                  .30224
                  .29144
                  .28115

                  53
                  .33729
                  .32532
                  .31390
                  .30302
                  .29263

                  54
                  .34931
                  .33728
                  .32579
                  .31482
                  .30434

                  55
                  .36152
                  .34945
                  .33790
                  .32686
                  .31631

                  56
                  .37392
                  .36181
                  .35022
                  .33912
                  .32850

                  57
                  .38652
                  .37438
                  .36276
                  .35162
                  .34093

                  58
                  .39929
                  .38715
                  .37550
                  .36432
                  .35359

                  59
                  .41226
                  .40013
                  .38847
                  .37727
                  .36650

                  60
                  .42542
                  .41331
                  .40165
                  .39044
                  .37965

                  61
                  .43878
                  .42670
                  .41506
                  .40386
                  .39306

                  62
                  .45233
                  .44029
                  .42869
                  .41750
                  .40671

                  63
                  .46606
                  .45409
                  .44253
                  .43138
                  .42060

                  64
                  .47994
                  .46805
                  .45656
                  .44545
                  .43471

                  65
                  .49397
                  .48217
                  .47076
                  .45971
                  .44902

                  66
                  .50811
                  .49642
                  .48510
                  .47413
                  .46350

                  67
                  .52235
                  .51079
                  .49957
                  .48869
                  .47814

                  68
                  .53668
                  .52525
                  .51416
                  .50339
                  .49293

                  69
                  .55110
                  .53983
                  .52888
                  .51823
                  .50788

                  70
                  .56563
                  .55453
                  .54373
                  .53322
                  .52299

                  71
                  .58029
                  .56938
                  .55875
                  .54839
                  .53830

                  72
                  .59507
                  .58436
                  .57392
                  .56374
                  .55380

                  73
                  .60990
                  .59941
                  .58917
                  .57918
                  .56942

                  74
                  .62465
                  .61439
                  .60437
                  .59458
                  .58502

                  75
                  .63920
                  .62919
                  .61940
                  .60983
                  .60046

                  76
                  .65351
                  .64375
                  .63419
                  .62484
                  .61568

                  77
                  .66755
                  .65804
                  .64873
                  .63961
                  .63066

                  78
                  .68133
                  .67209
                  .66303
                  .65414
                  .64542

                  79
                  .69492
                  .68595
                  .67714
                  .66850
                  .66001

                  80
                  .70834
                  .69965
                  .69111
                  .68272
                  .67448

                  81
                  .72151
                  .71311
                  .70484
                  .69671
                  .68872

                  82
                  .73436
                  .72624
                  .71825
                  .71039
                  .70265

                  83
                  .74689
                  .73906
                  .73135
                  .72376
                  .71627

                  84
                  .75917
                  .75163
                  .74421
                  .73688
                  .72967

                  85
                  .77122
                  .76398
                  .75685
                  .74980
                  .74286

                  86
                  .78280
                  .77586
                  .76901
                  .76224
                  .75556

                  87
                  .79359
                  .78693
                  .78036
                  .77386
                  .76744

                  88
                  .80360
                  .79720
                  .79088
                  .78463
                  .77846

                  89
                  .81302
                  .80688
                  .80081
                  .79480
                  .78886

                  90
                  .82213
                  .81624
                  .81041
                  .80465
                  .79894

                  91
                  .83086
                  .82522
                  .81963
                  .81410
                  .80862

                  92
                  .83895
                  .83354
                  .82818
                  .82287
                  .81762

                  93
                  .84626
                  .84106
                  .83591
                  .83081
                  .82575

                  94
                  .85275
                  .84774
                  .84278
                  .83787
                  .83299

                  95
                  .85839
                  .85355
                  .84876
                  .84400
                  .83929

                  96
                  .86313
                  .85844
                  .85378
                  .84916
                  .84458

                  97
                  .86737
                  .86280
                  .85826
                  .85377
                  .84930

                  98
                  .87107
                  .86661
                  .86218
                  .85779
                  .85343

                  99
                  .87455
                  .87019
                  .86586
                  .86157
                  .85730

                  100
                  .87800
                  .87374
                  .86951
                  .86532
                  .86115

                  101
                  .88106
                  .87689
                  .87275
                  .86863
                  .86455

                  102
                  .88437
                  .88030
                  .87625
                  .87222
                  .86822

                  103
                  .88858
                  .88463
                  .88070
                  .87679
                  .87290

                  104
                  .89266
                  .88882
                  .88500
                  .88120
                  .87741

                  105
                  .89872
                  .89506
                  .89141
                  .88778
                  .88417

                  106
                  .90832
                  .90496
                  .90161
                  .89828
                  .89496

                  107
                  .92146
                  .91854
                  .91562
                  .91271
                  .90981

                  108
                  .94177
                  .93956
                  .93736
                  .93516
                  .93296

                  109
                  .97400
                  .97300
                  .97200
                  .97100
                  .97000

                Table E

                  Table E—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Unitrust Having the Adjusted Payout Rate Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Adjusted Payout Rate
                  6.2%
                  6.4%
                  6.6%
                  6.8%
                  7.0%

                  0
                  .04253
                  .04066
                  .03899
                  .03751
                  .03618

                  1
                  .02516
                  .02320
                  .02145
                  .01989
                  .01850

                  2
                  .02557
                  .02353
                  .02171
                  .02008
                  .01862

                  3
                  .02640
                  .02427
                  .02237
                  .02067
                  .01915

                  4
                  .02744
                  .02523
                  .02325
                  .02147
                  .01988

                  5
                  .02868
                  .02638
                  .02431
                  .02246
                  .02080

                  6
                  .03008
                  .02767
                  .02552
                  .02359
                  .02185

                  7
                  .03159
                  .02909
                  .02685
                  .02483
                  .02302

                  8
                  .03325
                  .03065
                  .02831
                  .02621
                  .02432

                  9
                  .03507
                  .03236
                  .02993
                  .02774
                  .02576

                  10
                  .03704
                  .03423
                  .03170
                  .02941
                  .02735

                  11
                  .03918
                  .03626
                  .03363
                  .03125
                  .02910

                  12
                  .04148
                  .03845
                  .03571
                  .03323
                  .03099

                  13
                  .04387
                  .04073
                  .03788
                  .03531
                  .03297

                  14
                  .04632
                  .04305
                  .04010
                  .03742
                  .03499

                  15
                  .04876
                  .04538
                  .04231
                  .03953
                  .03699

                  16
                  .05118
                  .04767
                  .04449
                  .04159
                  .03896

                  17
                  .05357
                  .04994
                  .04663
                  .04362
                  .04088

                  18
                  .05598
                  .05221
                  .04878
                  .04565
                  .04280

                  19
                  .05843
                  .05453
                  .05097
                  .04772
                  .04476

                  20
                  .06099
                  .05694
                  .05325
                  .04988
                  .04679

                  21
                  .06365
                  .05946
                  .05564
                  .05213
                  .04893

                  22
                  .06644
                  .06210
                  .05813
                  .05449
                  .05116

                  23
                  .06937
                  .06488
                  .06076
                  .05699
                  .05352

                  24
                  .07249
                  .06784
                  .06357
                  .05965
                  .05605

                  25
                  .07584
                  .07103
                  .06660
                  .06254
                  .05879

                  26
                  .07945
                  .07447
                  .06989
                  .06567
                  .06178

                  27
                  .08334
                  .07819
                  .07345
                  .06907
                  .06503

                  28
                  .08751
                  .08219
                  .07729
                  .07275
                  .06856

                  29
                  .09194
                  .08645
                  .98137
                  .07667
                  .07233

                  30
                  .09663
                  .09096
                  .08572
                  .08086
                  .07635

                  31
                  .10156
                  .09572
                  .09030
                  .08527
                  .08060

                  32
                  .10677
                  .10074
                  .09515
                  .08995
                  .08512

                  33
                  .11224
                  .10604
                  .10027
                  .09490
                  .08990

                  34
                  .11798
                  .11159
                  .10564
                  .10010
                  .09494

                  35
                  .12401
                  .11744
                  .11131
                  .10560
                  .10026

                  36
                  .13033
                  .12357
                  .11727
                  .11137
                  .10586

                  37
                  .13693
                  .12999
                  .12350
                  .11743
                  .11175

                  38
                  .14380
                  .13668
                  .13002
                  .12377
                  .11791

                  39
                  .15096
                  .14366
                  .13681
                  .13038
                  .12436

                  40
                  .15841
                  .15092
                  .14390
                  .13729
                  .13109

                  41
                  .16615
                  .15848
                  .15128
                  .14450
                  .13812

                  42
                  .17421
                  .16637
                  .15899
                  .15204
                  .14549

                  43
                  .18257
                  .17456
                  .16700
                  .15988
                  .15316

                  44
                  .19124
                  .18306
                  .17533
                  .16804
                  .16115

                  45
                  .20018
                  .19184
                  .18395
                  .17649
                  .16943

                  46
                  .20943
                  .20092
                  .19287
                  .18524
                  .17802

                  47
                  .21897
                  .21030
                  .20209
                  .19431
                  .18692

                  48
                  .22883
                  .22001
                  .21165
                  .20371
                  .19616

                  49
                  .23900
                  .23004
                  .22152
                  .21343
                  .20573

                  50
                  .24948
                  .24039
                  .23173
                  .22349
                  .21565

                  51
                  .26027
                  .25104
                  .24225
                  .23387
                  .22589

                  52
                  .27135
                  .26200
                  .25308
                  .24457
                  .23645

                  53
                  .28271
                  .27325
                  .26421
                  .25558
                  .24733

                  54
                  .29433
                  .28476
                  .27561
                  .26686
                  .25848

                  55
                  .30621
                  .29654
                  .28728
                  .27842
                  .26993

                  56
                  .31832
                  .30856
                  .29921
                  .29025
                  .28165

                  57
                  .33068
                  .32085
                  .31142
                  .30236
                  .29367

                  58
                  .34329
                  .33339
                  .32388
                  .31474
                  .30595

                  59
                  .35615
                  .34620
                  .33662
                  .32741
                  .31855

                  60
                  .36927
                  .35927
                  .34964
                  .34037
                  .33143

                  61
                  .38265
                  .37262
                  .36295
                  .35362
                  .34463

                  62
                  .39630
                  .38625
                  .37655
                  .36718
                  .35814

                  63
                  .41020
                  .40014
                  .39043
                  .38104
                  .37196

                  64
                  .42432
                  .41428
                  .40456
                  .39516
                  .38606

                  65
                  .43866
                  .42864
                  .41893
                  .40953
                  .40042

                  66
                  .45320
                  .44321
                  .43353
                  .42414
                  .41503

                  67
                  .46790
                  .45796
                  .44832
                  .43896
                  .42987

                  68
                  .48277
                  .47289
                  .46330
                  .45398
                  .44492

                  69
                  .49781
                  .48802
                  .47849
                  .46923
                  .46021

                  70
                  .51303
                  .50333
                  .49389
                  .48470
                  .47574

                  71
                  .52847
                  .51888
                  .50954
                  .50044
                  .49156

                  72
                  .54412
                  .53466
                  .52544
                  .51644
                  .50766

                  73
                  .55990
                  .55059
                  .54151
                  .52363
                  .52396

                  74
                  .57566
                  .56652
                  .55758
                  .54885
                  .54030

                  75
                  .59129
                  .58232
                  .57354
                  .56496
                  .55655

                  76
                  .60671
                  .59792
                  .58932
                  .58089
                  .57263

                  77
                  .62189
                  .61330
                  .60487
                  .59661
                  .58851

                  78
                  .63687
                  .62847
                  .62024
                  .61215
                  .60422

                  79
                  .65168
                  .64349
                  .63546
                  .62756
                  .61981

                  80
                  .66637
                  .65841
                  .65058
                  .64289
                  .63532

                  81
                  .68085
                  .67312
                  .66551
                  .65802
                  .65066

                  82
                  .69503
                  .68753
                  .68014
                  .67287
                  .66571

                  83
                  .70890
                  .70164
                  .69448
                  .68743
                  .68048

                  84
                  .72255
                  .71553
                  .70861
                  .70179
                  .69506

                  85
                  .73600
                  .72924
                  .72257
                  .71598
                  .70948

                  86
                  .74897
                  .7446
                  .73693
                  .72969
                  .72342

                  87
                  .76109
                  .75483
                  .74864
                  .74252
                  .73647

                  88
                  .77235
                  .76631
                  .76035
                  .75445
                  .74862

                  89
                  .78298
                  .77717
                  .77142
                  .76573
                  .76011

                  90
                  .79329
                  .78770
                  .78217
                  .77669
                  .77127

                  91
                  .80320
                  .79783
                  .79252
                  .78725
                  .78204

                  92
                  .81241
                  .80725
                  .80214
                  .79708
                  .79206

                  93
                  .82074
                  .81578
                  .81086
                  .80598
                  .80115

                  94
                  .82816
                  .82337
                  .81862
                  .81391
                  .80924

                  95
                  .83461
                  .82997
                  .82537
                  .82081
                  .81629

                  96
                  .84003
                  .83552
                  .82105
                  .82661
                  .82221

                  97
                  .84487
                  .84048
                  .83612
                  .82179
                  .82750

                  98
                  .84910
                  .84481
                  .84054
                  .83631
                  .83211

                  99
                  .85307
                  .84887
                  .84469
                  .84055
                  .83644

                  100
                  .85701
                  .85290
                  .84882
                  .84476
                  .84073

                  101
                  .86049
                  .85645
                  .85244
                  .84846
                  .84451

                  102
                  .86424
                  .86029
                  .85637
                  .85247
                  .84859

                  103
                  .86904
                  .86520
                  .86138
                  .85758
                  .85381

                  104
                  .87365
                  .86991
                  .86619
                  .86249
                  .85880

                  105
                  .88058
                  .87700
                  .87343
                  .86988
                  .86635

                  106
                  .89165
                  .88835
                  .88506
                  .88179
                  .87852

                  107
                  .90692
                  .90404
                  .90116
                  .89829
                  .89542

                  108
                  .93077
                  .92858
                  .92639
                  .92420
                  .92201

                  109
                  .96900
                  .96800
                  .96700
                  .96600
                  .96500

                Table E

                  Table E—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Unitrust Having the Adjusted Payout Rate Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Adjusted payout rate
                  7.2%
                  7.4%
                  7.6%
                  7.8%
                  8.0%

                  0
                  .03499
                  .03392
                  .03296
                  .03209
                  .03130

                  1
                  .01725
                  .01613
                  .01513
                  .01422
                  .01340

                  2
                  .01732
                  .01615
                  .01509
                  .01414
                  .01329

                  3
                  .01778
                  .01656
                  .01545
                  .01446
                  .01356

                  4
                  .01846
                  .01717
                  .01601
                  .01497
                  .01402

                  5
                  .01930
                  .01796
                  .01674
                  .01574
                  .01465

                  6
                  .02029
                  .01888
                  .01761
                  .01645
                  .01541

                  7
                  .02138
                  .01991
                  .01857
                  .01736
                  .01627

                  8
                  .02261
                  .02106
                  .01966
                  .01839
                  .01724

                  9
                  .02397
                  .02236
                  .02089
                  .01956
                  .01835

                  10
                  .02548
                  .02379
                  .02225
                  .02086
                  .01959

                  11
                  .02715
                  .02538
                  .02377
                  .02231
                  .02098

                  12
                  .02895
                  .02710
                  .02542
                  .02389
                  .02250

                  13
                  .03085
                  .02892
                  .02716
                  .02556
                  .02410

                  14
                  .03278
                  .03076
                  .02893
                  .02725
                  .02572

                  15
                  .03469
                  .03259
                  .03067
                  .02892
                  .02732

                  16
                  .03656
                  .03437
                  .03237
                  .03054
                  .02886

                  17
                  .03938
                  .03610
                  .03401
                  .03210
                  .03035

                  18
                  .04020
                  .03782
                  .03564
                  .03364
                  .03181

                  19
                  .04204
                  .03956
                  .03729
                  .03520
                  .03328

                  20
                  .04397
                  .04138
                  .03901
                  .03683
                  .03483

                  21
                  .04599
                  .04329
                  .04081
                  .03853
                  .03644

                  22
                  .04810
                  .04529
                  .04270
                  .04032
                  .03813

                  23
                  .05033
                  .04740
                  .04470
                  .04222
                  .03992

                  24
                  .05273
                  .04968
                  .04686
                  .04427
                  .04187

                  25
                  .05534
                  .05216
                  .04922
                  .04651
                  .04400

                  26
                  .05819
                  .05488
                  .05182
                  .04898
                  .04636

                  27
                  .06130
                  .05785
                  .05466
                  .05170
                  .04896

                  28
                  .06468
                  .06109
                  .05777
                  .05468
                  .05182

                  29
                  .06830
                  .06457
                  .06110
                  .05789
                  .05490

                  30
                  .07217
                  .06829
                  .06469
                  .06134
                  .05822

                  31
                  .07627
                  .07224
                  .06849
                  .06500
                  .06174

                  32
                  .08062
                  .07644
                  .07254
                  .06891
                  .06552

                  33
                  .08524
                  .08090
                  .07686
                  .07308
                  .06955

                  34
                  .09012
                  .08562
                  .08142
                  .07749
                  .07382

                  35
                  .09528
                  .09062
                  .08626
                  .08218
                  .07836

                  36
                  .10071
                  .09589
                  .09137
                  .08714
                  .08317

                  37
                  .10643
                  .10144
                  .09676
                  .09237
                  .08825

                  38
                  .11242
                  .10727
                  .10243
                  .09788
                  .09361

                  39
                  .11869
                  .11337
                  .10837
                  .10366
                  .09923

                  40
                  .12526
                  .11977
                  .11460
                  .10973
                  .10514

                  41
                  .13212
                  .12646
                  .12113
                  .11609
                  .11135

                  42
                  .13931
                  .13349
                  .12799
                  .12279
                  .11789

                  43
                  .14681
                  .14082
                  .13515
                  .12980
                  .12473

                  44
                  .15463
                  .14847
                  .14264
                  .13712
                  .13189

                  45
                  .16274
                  .15642
                  .15042
                  .14474
                  .13935

                  46
                  .17117
                  .16468
                  .15853
                  .15268
                  .14713

                  47
                  .17991
                  .17326
                  .16694
                  .16094
                  .15523

                  48
                  .18900
                  .18219
                  .17571
                  .16955
                  .16368

                  49
                  .19841
                  .19145
                  .18481
                  .17850
                  .17248

                  50
                  .20818
                  .20106
                  .19428
                  .18781
                  .18163

                  51
                  .21827
                  .21101
                  .20407
                  .19745
                  .19113

                  52
                  .22869
                  .22129
                  .21421
                  .20745
                  .20098

                  53
                  .23944
                  .23190
                  .22468
                  .21778
                  .21117

                  54
                  .25047
                  .24280
                  .23545
                  .22841
                  .22167

                  55
                  .26180
                  .25400
                  .24653
                  .23936
                  .23249

                  56
                  .27341
                  .26550
                  .25790
                  .25061
                  .24361

                  57
                  .28532
                  .27729
                  .26959
                  .26218
                  .25505

                  58
                  .29751
                  .28938
                  .28157
                  .27405
                  .26681

                  59
                  .31001
                  .30180
                  .29388
                  .28626
                  .27892

                  60
                  .32282
                  .31452
                  .30652
                  .29880
                  .29136

                  61
                  .33595
                  .32758
                  .31950
                  .31169
                  .30416

                  62
                  .34941
                  .34097
                  .33282
                  .32494
                  .31733

                  63
                  .36318
                  .35469
                  .34648
                  .33854
                  .33085

                  64
                  .37725
                  .36872
                  .36046
                  .35246
                  .34472

                  65
                  .39159
                  .38304
                  .37474
                  .36670
                  .35891

                  66
                  .40620
                  .39763
                  .38931
                  .38124
                  .37340

                  67
                  .42104
                  .41247
                  .40414
                  .39605
                  .38819

                  68
                  .43611
                  .42755
                  .41923
                  .41113
                  .40326

                  69
                  .45144
                  .44290
                  .43459
                  .42650
                  .41863

                  70
                  .46702
                  .45852
                  .45025
                  .44218
                  .43432

                  71
                  .48291
                  .47447
                  .46623
                  .45820
                  .45037

                  72
                  .49909
                  .49072
                  .48255
                  .47458
                  .46679

                  73
                  .51549
                  .50721
                  .49912
                  .49912
                  .48349

                  74
                  .53195
                  .52377
                  .51578
                  .50796
                  .50031

                  75
                  .54832
                  .54027
                  .53238
                  .52466
                  .51710

                  76
                  .56454
                  .55661
                  .54884
                  .54123
                  .53377

                  77
                  .58057
                  .57278
                  .56514
                  .55765
                  .55030

                  78
                  .59644
                  .58879
                  .58129
                  .58393
                  .56670

                  79
                  .61219
                  .60471
                  .59736
                  .59013
                  .58304

                  80
                  .62788
                  .62057
                  .61338
                  .60632
                  .59936

                  81
                  .64341
                  .63628
                  .62926
                  .62236
                  .61556

                  82
                  .65866
                  .65172
                  .64488
                  .63815
                  .63151

                  83
                  .67364
                  .66689
                  .66024
                  .65369
                  .64723

                  84
                  .68843
                  .68189
                  .67544
                  .66907
                  .66279

                  85
                  .70307
                  .69674
                  .69050
                  .68433
                  .67825

                  86
                  .71723
                  .71112
                  .70508
                  .69912
                  .69323

                  87
                  .73050
                  .72460
                  .71877
                  .71300
                  .70731

                  88
                  .74285
                  .73715
                  .73151
                  .72593
                  .72042

                  89
                  .75454
                  .74903
                  .74358
                  .73819
                  .73286

                  90
                  .76591
                  .76060
                  .75534
                  .75014
                  .74499

                  91
                  .77688
                  .77176
                  .76670
                  .76169
                  .75672

                  92
                  .78709
                  .78217
                  .77729
                  .77245
                  .76766

                  93
                  .79635
                  .79160
                  .78690
                  .78223
                  .77761

                  94
                  .80461
                  .80002
                  .79547
                  .79096
                  .78648

                  95
                  .81180
                  .80735
                  .80394
                  .79856
                  .79421

                  96
                  .81784
                  .81351
                  .80921
                  .80494
                  .80071

                  97
                  .82324
                  .81901
                  .81481
                  .81065
                  .80651

                  98
                  .82794
                  .82380
                  .81969
                  .81562
                  .81157

                  99
                  .83235
                  .82830
                  .83427
                  .82028
                  .81631

                  100
                  .83674
                  .83276
                  .82882
                  .82490
                  .82101

                  101
                  .84058
                  .83668
                  .83280
                  .82895
                  .82512

                  102
                  .84474
                  .84091
                  .83710
                  .83332
                  .82956

                  103
                  .85006
                  .84633
                  .84262
                  .83893
                  .83526

                  104
                  .85514
                  .85150
                  .84787
                  .84427
                  .84068

                  105
                  .86284
                  .85934
                  .85585
                  .85239
                  .84893

                  106
                  .87527
                  .87204
                  .86881
                  .86559
                  .86239

                  107
                  .89257
                  .88972
                  .88688
                  .88404
                  .88121

                  108
                  .91983
                  .91765
                  .91547
                  .91330
                  .91113

                  109
                  .96400
                  .96300
                  .96200
                  .96100
                  .96000

                Table E

                  Table E—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Unitrust Having the Adjusted Payout Rate Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Adjusted payout rate
                  8.2%
                  8.4%
                  8.6%
                  8.8%
                  9.0%

                  0
                  .03059
                  .02995
                  .02936
                  .02882
                  .02833

                  1
                  .01267
                  .01200
                  .01139
                  .01084
                  .01033

                  2
                  .01251
                  .01181
                  .01117
                  .01059
                  .01006

                  3
                  .01274
                  .01200
                  .01133
                  .01072
                  .01016

                  4
                  .01316
                  .01239
                  .01168
                  .01103
                  .01044

                  5
                  .01375
                  .01293
                  .01218
                  .01150
                  .01088

                  6
                  .01446
                  .01360
                  .01281
                  .01209
                  .01144

                  7
                  .01527
                  .01436
                  .01353
                  .01277
                  .01208

                  8
                  .01619
                  .01523
                  .01436
                  .01356
                  .01283

                  9
                  .01725
                  .01624
                  .01532
                  .01448
                  .01370

                  10
                  .01843
                  .01737
                  .01640
                  .01551
                  .01470

                  11
                  .01976
                  .01865
                  .01763
                  .01669
                  .01583

                  12
                  .02122
                  .02005
                  .01898
                  .01800
                  .01709

                  13
                  .02276
                  .02153
                  .02041
                  .01937
                  .01842

                  14
                  .02432
                  .02303
                  .02185
                  .02077
                  .01977

                  15
                  .02585
                  .02451
                  .02327
                  .02213
                  .02108

                  16
                  .02732
                  .02591
                  .02462
                  .02342
                  .02232

                  17
                  .02874
                  .02726
                  .02590
                  .02465
                  .02349

                  18
                  .03013
                  .02858
                  .02715
                  .02584
                  .02462

                  19
                  .03152
                  .02990
                  .02841
                  .02703
                  .02575

                  20
                  .03298
                  .03128
                  .02971
                  .02826
                  .02692

                  21
                  .03451
                  .03272
                  .03108
                  .02956
                  .02815

                  22
                  .03611
                  .03424
                  .03251
                  .03091
                  .02944

                  23
                  .03781
                  .03585
                  .03404
                  .03236
                  .03081

                  24
                  .03965
                  .03760
                  .03570
                  .03393
                  .03230

                  25
                  .04168
                  .03953
                  .03753
                  .03568
                  .03396

                  26
                  .04393
                  .04168
                  .03958
                  .03764
                  .03583

                  27
                  .04642
                  .04406
                  .04186
                  .03982
                  .03792

                  28
                  .04916
                  .04669
                  .04439
                  .04224
                  .04025

                  29
                  .05212
                  .04953
                  .04712
                  .04487
                  .04277

                  30
                  .05531
                  .05260
                  .05008
                  .04772
                  .04552

                  31
                  .05871
                  .05588
                  .05324
                  .05077
                  .04846

                  32
                  .06236
                  .05940
                  .05663
                  .05405
                  .05163

                  33
                  .06625
                  .06316
                  .06027
                  .05756
                  .05502

                  34
                  .07038
                  .06716
                  .06414
                  .06131
                  .05865

                  35
                  .07478
                  .07142
                  .06827
                  .06531
                  .06253

                  36
                  .07944
                  .07595
                  .07266
                  .06957
                  .06667

                  37
                  .08438
                  .08074
                  .07732
                  .07410
                  .07106

                  38
                  .08958
                  .08580
                  .08223
                  .07888
                  .07571

                  39
                  .09506
                  .09112
                  .08742
                  .08392
                  .08061

                  40
                  .10081
                  .09673
                  .09288
                  .08924
                  .08580

                  41
                  .10687
                  .10263
                  .09863
                  .09484
                  .09126

                  42
                  .11325
                  .10886
                  .10471
                  .10078
                  .09705

                  43
                  .11993
                  .11539
                  .11109
                  .10701
                  .10314

                  44
                  .12694
                  .12224
                  .11779
                  .11356
                  .10955

                  45
                  .13424
                  .12939
                  .12478
                  .12040
                  .11624

                  46
                  .14186
                  .13686
                  .13210
                  .12757
                  .12326

                  47
                  .14980
                  .14464
                  .13973
                  .13505
                  .13059

                  48
                  .15810
                  .15278
                  .14772
                  .14289
                  .13828

                  49
                  .16674
                  .16127
                  .15605
                  .15107
                  .14631

                  50
                  .17574
                  .17012
                  .16475
                  .15962
                  .15472

                  51
                  .18510
                  .17932
                  .17381
                  .16853
                  .16348

                  52
                  .19480
                  .18888
                  .18322
                  .17779
                  .17260

                  53
                  .20484
                  .19878
                  .19298
                  .18741
                  .18208

                  54
                  .21520
                  .20901
                  .20306
                  .19735
                  .19188

                  55
                  .22589
                  .21955
                  .21347
                  .20763
                  .20202

                  56
                  .23688
                  .23041
                  .22420
                  .21822
                  .21248

                  57
                  .24820
                  .24161
                  .23527
                  .22917
                  .22329

                  58
                  .25984
                  .25313
                  .24667
                  .24044
                  .23444

                  59
                  .27184
                  .26501
                  .25843
                  .25209
                  .24596

                  60
                  .28417
                  .27724
                  .27055
                  .26409
                  .25786

                  61
                  .29688
                  .28985
                  .28306
                  .27650
                  .27015

                  62
                  .30996
                  .30284
                  .29596
                  .28929
                  .28285

                  63
                  .32341
                  .31621
                  .30924
                  .30249
                  .29595

                  64
                  .33721
                  .32994
                  .32289
                  .31605
                  .30943

                  65
                  .35134
                  .34401
                  .33689
                  .32999
                  .32329

                  66
                  .36580
                  .35841
                  .35124
                  .34427
                  .33750

                  67
                  .38055
                  .37312
                  .36590
                  .35889
                  .35206

                  68
                  .39559
                  .38814
                  .38089
                  .37383
                  .36696

                  69
                  .41096
                  .40349
                  .39622
                  .38913
                  .38222

                  70
                  .42665
                  .41918
                  .41190
                  .40480
                  .39787

                  71
                  .44273
                  .43527
                  .42799
                  .42089
                  .41395

                  72
                  .45919
                  .45176
                  .44450
                  .43741
                  .43049

                  73
                  .47594
                  .46856
                  .46134
                  .45428
                  .44738

                  74
                  .49283
                  .48550
                  .47834
                  .47132
                  .46446

                  75
                  .50969
                  .50244
                  .49534
                  .48838
                  .48157

                  76
                  .52646
                  .51929
                  .51226
                  .50537
                  .49862

                  77
                  .54309
                  .53601
                  .52907
                  .52226
                  .51558

                  78
                  .55960
                  .55263
                  .54579
                  .53907
                  .53247

                  79
                  .57606
                  .56921
                  .56248
                  .55586
                  .54935

                  80
                  .59253
                  .58580
                  .57919
                  .57269
                  .56629

                  81
                  .60887
                  .60229
                  .59581
                  .58943
                  .58315

                  82
                  .62498
                  .61855
                  .61221
                  .60597
                  .59982

                  83
                  .64086
                  .63459
                  .62840
                  .62230
                  .61629

                  84
                  .65660
                  .65049
                  .64447
                  .63852
                  .63266

                  85
                  .67224
                  .66631
                  .66046
                  .65468
                  .64898

                  86
                  .68742
                  .68167
                  .67600
                  .67040
                  .66486

                  87
                  .70168
                  .69611
                  .69061
                  .68518
                  .67980

                  88
                  .71497
                  .70958
                  .70425
                  .69897
                  .69376

                  89
                  .72758
                  .72236
                  .71720
                  .71208
                  .70702

                  90
                  .73989
                  .73484
                  .72985
                  .72490
                  .72000

                  91
                  .75180
                  .74693
                  .74210
                  .73732
                  .73259

                  92
                  .76292
                  .75821
                  .75355
                  .74894
                  .74436

                  93
                  .77302
                  .76848
                  .76397
                  .75951
                  .75508

                  94
                  .78204
                  .77764
                  .77328
                  .76895
                  .76466

                  95
                  .78991
                  .78563
                  .78139
                  .77719
                  .77302

                  96
                  .79651
                  .79234
                  .78821
                  .78411
                  .78003

                  97
                  .80241
                  .79834
                  .79430
                  .79029
                  .78630

                  98
                  .80755
                  .80356
                  .79960
                  .79567
                  .79176

                  99
                  .81236
                  .80845
                  .80456
                  .80071
                  .79687

                  100
                  .81715
                  .81331
                  .80949
                  .80571
                  .80195

                  101
                  .82132
                  .81754
                  .81379
                  .81006
                  .80636

                  102
                  .82582
                  .82211
                  .81842
                  .81476
                  .81111

                  103
                  .83162
                  .82799
                  .82439
                  .82080
                  .81724

                  104
                  .83711
                  .83356
                  .83003
                  .82652
                  .82302

                  105
                  .84550
                  .84208
                  .83867
                  .83528
                  .83191

                  106
                  .85920
                  .85602
                  .85285
                  .84969
                  .84655

                  107
                  .87839
                  .87558
                  .87277
                  .86997
                  .86718

                  108
                  .90896
                  .90679
                  .90463
                  .90246
                  .90030

                  109
                  .95900
                  .95800
                  .95700
                  .95600
                  .95500

                Table E

                  Table E—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Unitrust Having the Adjusted Payout Rate Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Adjusted payout Rate
                  9.2%
                  9.4%
                  9.6%
                  9.8%
                  10.0%

                  0
                  .02788
                  .02747
                  .02709
                  .02673
                  .02641

                  1
                  .00987
                  .00945
                  .00906
                  .00871
                  .00838

                  2
                  .00957
                  .00913
                  .00872
                  .00835
                  .00800

                  3
                  .00965
                  .00918
                  .00875
                  .00836
                  .00799

                  4
                  .00991
                  .00941
                  .00896
                  .00854
                  .00815

                  5
                  .01031
                  .00979
                  .00931
                  .00887
                  .00846

                  6
                  .01084
                  .01028
                  .00978
                  .00931
                  .00888

                  7
                  .01144
                  .01086
                  .01032
                  .00983
                  .00937

                  8
                  .01216
                  .01154
                  .01097
                  .01044
                  .00996

                  9
                  .01299
                  .01234
                  .01174
                  .01118
                  .01067

                  10
                  .01395
                  .01326
                  .01262
                  .01204
                  .01149

                  11
                  .01504
                  .01432
                  .01364
                  .01302
                  .01245

                  12
                  .01626
                  .01549
                  .01478
                  .01413
                  .01352

                  13
                  .01755
                  .01674
                  .01599
                  .01530
                  .01466

                  14
                  .01885
                  .01800
                  .01721
                  .01648
                  .01581

                  15
                  .02011
                  .01922
                  .01839
                  .01762
                  .01691

                  16
                  .02130
                  .02036
                  .01949
                  .01869
                  .01794

                  17
                  .02243
                  .02144
                  .02052
                  .01967
                  .01888

                  18
                  .02350
                  .02246
                  .02150
                  .02061
                  .01978

                  19
                  .02457
                  .02348
                  .02247
                  .02153
                  .02065

                  20
                  .02569
                  .02454
                  .02347
                  .02248
                  .02156

                  21
                  .02685
                  .02564
                  .02452
                  .02347
                  .02250

                  22
                  .02806
                  .02679
                  .02561
                  .02451
                  .02348

                  23
                  .02936
                  .02802
                  .02677
                  .02561
                  .02453

                  24
                  .03078
                  .02937
                  .02805
                  .02683
                  .02569

                  25
                  .03236
                  .03087
                  .02949
                  .02820
                  .02699

                  26
                  .03415
                  .03258
                  .03112
                  .02975
                  .02848

                  27
                  .03615
                  .03450
                  .03295
                  .03151
                  .03017

                  28
                  .03838
                  .03664
                  .03502
                  .03350
                  .03208

                  29
                  .04081
                  .03898
                  .03727
                  .03567
                  .03416

                  30
                  .04346
                  .04154
                  .03973
                  .03804
                  .03646

                  31
                  .04630
                  .04427
                  .04237
                  .04059
                  .03892

                  32
                  .04936
                  .04723
                  .04523
                  .04335
                  .04159

                  33
                  .05264
                  .05041
                  .04831
                  .04633
                  .04448

                  34
                  .05615
                  .05381
                  .05160
                  .04952
                  .04757

                  35
                  .05992
                  .05746
                  .05514
                  .05296
                  .05090

                  36
                  .06393
                  .06135
                  .05892
                  .05663
                  .05447

                  37
                  .06820
                  .06550
                  .06295
                  .06055
                  .05828

                  38
                  .07272
                  .06990
                  .06723
                  .06471
                  .06233

                  39
                  .07749
                  .07454
                  .07175
                  .06912
                  .06662

                  40
                  .08254
                  .07946
                  .07655
                  .07379
                  .07117

                  41
                  .08787
                  .08466
                  .08162
                  .07073
                  .07599

                  42
                  .09352
                  .09018
                  .08700
                  .08399
                  .08112

                  43
                  .09947
                  .09599
                  .09268
                  .08953
                  .08654

                  44
                  .10573
                  .10211
                  .09866
                  .09539
                  .09227

                  45
                  .11229
                  .10852
                  .10494
                  .10152
                  .09827

                  46
                  .11916
                  .11525
                  .11153
                  .10798
                  .10459

                  47
                  .12634
                  .12229
                  .11843
                  .11474
                  .11122

                  48
                  .13388
                  .12969
                  .12568
                  .12186
                  .11820

                  49
                  .14177
                  .13743
                  .13329
                  .12932
                  .12553

                  50
                  .15003
                  .14555
                  .14126
                  .13716
                  .13322

                  51
                  .15865
                  .15402
                  .14959
                  .14534
                  .14127

                  52
                  .16763
                  .16286
                  .15828
                  .15390
                  .14969

                  53
                  .17696
                  .17205
                  .16734
                  .16281
                  .15847

                  54
                  .18662
                  .18157
                  .17672
                  .17206
                  .16758

                  55
                  .19662
                  .19144
                  .18645
                  .18165
                  .17703

                  56
                  .20695
                  .20163
                  .19651
                  .19157
                  .18682

                  57
                  .21763
                  .21218
                  .20693
                  .20186
                  .19698

                  58
                  .22865
                  .22307
                  .21769
                  .21250
                  .20749

                  59
                  .24005
                  .23435
                  .22885
                  .22353
                  .21839

                  60
                  .25183
                  .24601
                  .24038
                  .23494
                  .22969

                  61
                  .26401
                  .25808
                  .25234
                  .24678
                  .24141

                  62
                  .27661
                  .27056
                  .26471
                  .25905
                  .25356

                  63
                  .28961
                  .28347
                  .27752
                  .27175
                  .26615

                  64
                  .30300
                  .29677
                  .29072
                  .28486
                  .27916

                  65
                  .31678
                  .31046
                  .30433
                  .29837
                  .29259

                  66
                  .33093
                  .32454
                  .31832
                  .31228
                  .30641

                  67
                  .34542
                  .33897
                  .33268
                  .32657
                  .32062

                  68
                  .36027
                  .35376
                  .34742
                  .34124
                  .33522

                  69
                  .37550
                  .36894
                  .36255
                  .35632
                  .35024

                  70
                  .39111
                  .38452
                  .37809
                  .37182
                  .36570

                  71
                  .40719
                  .40058
                  .39412
                  .38782
                  .38166

                  72
                  .42372
                  .41710
                  .41064
                  .40432
                  .39814

                  73
                  .44062
                  .43402
                  .42756
                  .42124
                  .41506

                  74
                  .45774
                  .45116
                  .44471
                  .43840
                  .43223

                  75
                  .47489
                  .46834
                  .46193
                  .45565
                  .44949

                  76
                  .49199
                  .48550
                  .47913
                  .47288
                  .46675

                  77
                  .50902
                  .50258
                  .49626
                  .49006
                  .48397

                  78
                  .52598
                  .51962
                  .51336
                  .50721
                  .50117

                  79
                  .54295
                  .53667
                  .53049
                  .52441
                  .51843

                  80
                  .55999
                  .55380
                  .54771
                  .54171
                  .53581

                  81
                  .57697
                  .57088
                  .56489
                  .55899
                  .55317

                  82
                  .59375
                  .58778
                  .58190
                  .57610
                  .57039

                  83
                  .61036
                  .60451
                  .59875
                  .59306
                  .58746

                  84
                  .62687
                  .62116
                  .61553
                  .60997
                  .60448

                  85
                  .64335
                  .63779
                  .63230
                  .62688
                  .62152

                  86
                  .65939
                  .65398
                  .64864
                  .64337
                  .63816

                  87
                  .67449
                  .66924
                  .66405
                  .65892
                  .65384

                  88
                  .68860
                  .68350
                  .67845
                  .67346
                  .66852

                  89
                  .70202
                  .69706
                  .69216
                  .68731
                  .68250

                  90
                  .71515
                  .71035
                  .70559
                  .70088
                  .69622

                  91
                  .72790
                  .72325
                  .71865
                  .71409
                  .70957

                  92
                  .73982
                  .73533
                  .73087
                  .72646
                  .72208

                  93
                  .75069
                  .74634
                  .74202
                  .73774
                  .73350

                  94
                  .76040
                  .75618
                  .75199
                  .74784
                  .74372

                  95
                  .76888
                  .76477
                  .76070
                  .75666
                  .75265

                  96
                  .77599
                  .77199
                  .76801
                  .76406
                  .76014

                  97
                  .78235
                  .77843
                  .77454
                  .77067
                  .76684

                  98
                  .78789
                  .78404
                  .78022
                  .77642
                  .77266

                  99
                  .79307
                  .78929
                  .78554
                  .78181
                  .77811

                  100
                  .79821
                  .79450
                  .79081
                  .78715
                  .78351

                  101
                  .80268
                  .79902
                  .79539
                  .79178
                  .78819

                  102
                  .80749
                  .80389
                  .80031
                  .79676
                  .79322

                  103
                  .81370
                  .81018
                  .80668
                  .80319
                  .79973

                  104
                  .81955
                  .81609
                  .81265
                  .80923
                  .80582

                  105
                  .82855
                  .82520
                  .82187
                  .81856
                  .81526

                  106
                  .84341
                  .84029
                  .83718
                  .83408
                  .83099

                  107
                  .86439
                  .86162
                  .85884
                  .85608
                  .85332

                  108
                  .89815
                  .89599
                  .89384
                  .89169
                  .88955

                  109
                  .95400
                  .95300
                  .95200
                  .95100
                  .95000

                Table E

                  Table E—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Unitrust Having the Adjusted Payout Rate Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Adjusted payout rate
                  10.2%
                  10.4%
                  10.6%
                  10.8%
                  11.0%

                  0
                  .02610
                  .02582
                  .02556
                  .02531
                  .02508

                  1
                  .00807
                  .00779
                  .00753
                  .00729
                  .00707

                  2
                  .00769
                  .00739
                  .00712
                  .00686
                  .00663

                  3
                  .00766
                  .00735
                  .00706
                  .00679
                  .00654

                  4
                  .00780
                  .00747
                  .00716
                  .00688
                  .00662

                  5
                  .00808
                  .00773
                  .00741
                  .00711
                  .00683

                  6
                  .00848
                  .00811
                  .00776
                  .00744
                  .00715

                  7
                  .00894
                  .00855
                  .00819
                  .00785
                  .00753

                  8
                  .00951
                  .00909
                  .00871
                  .00835
                  .00801

                  9
                  .01019
                  .00975
                  .00934
                  .00896
                  .00860

                  10
                  .01099
                  .01052
                  .01008
                  .00967
                  .00930

                  11
                  .01191
                  .01142
                  .01095
                  .01052
                  .01012

                  12
                  .01295
                  .01243
                  .01194
                  .01148
                  .01106

                  13
                  .01406
                  .01351
                  .01299
                  .01251
                  .01206

                  14
                  .01518
                  .01459
                  .01405
                  .01354
                  .01306

                  15
                  .01625
                  .01563
                  .01506
                  .01452
                  .01402

                  16
                  .01724
                  .01659
                  .01599
                  .01542
                  .01489

                  17
                  .01815
                  .01747
                  .01683
                  .01624
                  .01568

                  18
                  .01901
                  .01829
                  .01761
                  .01699
                  .01640

                  19
                  .01984
                  .01908
                  .01837
                  .01771
                  .01709

                  20
                  .02070
                  .01990
                  .01915
                  .01846
                  .01780

                  21
                  .02160
                  .02075
                  .01996
                  .01923
                  .01854

                  22
                  .02253
                  .02164
                  .02080
                  .02003
                  .01930

                  23
                  .02352
                  .02258
                  .02170
                  .02088
                  .02010

                  24
                  .02462
                  .02362
                  .02269
                  .02182
                  .02100

                  25
                  .02586
                  .02481
                  .02382
                  .02289
                  .02203

                  26
                  .02729
                  .02617
                  .02512
                  .02414
                  .02322

                  27
                  .02891
                  .02772
                  .02662
                  .02558
                  .02460

                  28
                  .03074
                  .02949
                  .02832
                  .02722
                  .02618

                  29
                  .03276
                  .03143
                  .03019
                  .02902
                  .02792

                  30
                  .03497
                  .03357
                  .03225
                  .03102
                  .02985

                  31
                  .03735
                  .03587
                  .03448
                  .03317
                  .03193

                  32
                  .03993
                  .03837
                  .03690
                  .03551
                  .03420

                  33
                  .04273
                  .04108
                  .03952
                  .03806
                  .03667

                  34
                  .04572
                  .04399
                  .04234
                  .04079
                  .03933

                  35
                  .04896
                  .04713
                  .04539
                  .04376
                  .04221

                  36
                  .05243
                  .05049
                  .04867
                  .04694
                  .04530

                  37
                  .05613
                  .05410
                  .05217
                  .05035
                  .04862

                  38
                  .06007
                  .05793
                  .05591
                  .05399
                  .05217

                  39
                  .06425
                  .06200
                  .05987
                  .05785
                  .05593

                  40
                  .06869
                  .06633
                  .06409
                  .06197
                  .05995

                  41
                  .07339
                  .07092
                  .06857
                  .06634
                  .06421

                  42
                  .07840
                  .07581
                  .07335
                  .07101
                  .06878

                  43
                  .08370
                  .08099
                  .07841
                  .07595
                  .07361

                  44
                  .08930
                  .08646
                  .08377
                  .08119
                  .07874

                  45
                  .09517
                  .09222
                  .08940
                  .08670
                  .08413

                  46
                  .10136
                  .09828
                  .09533
                  .09252
                  .08983

                  47
                  .10786
                  .10464
                  .10157
                  .09864
                  .09582

                  48
                  .11470
                  .11136
                  .10816
                  .10510
                  .10216

                  49
                  .12189
                  .11842
                  .11509
                  .11190
                  .10884

                  50
                  .12946
                  .12585
                  .12239
                  .11907
                  .11588

                  51
                  .13737
                  .13363
                  .13003
                  .12659
                  .12327

                  52
                  .14565
                  .14177
                  .13805
                  .13447
                  .13103

                  53
                  .15429
                  .15028
                  .14642
                  .14271
                  .13914

                  54
                  .16327
                  .15912
                  .15513
                  .15129
                  .14759

                  55
                  .17259
                  .16831
                  .16419
                  .16022
                  .15639

                  56
                  .18225
                  .17784
                  .17358
                  .16948
                  .16553

                  57
                  .19227
                  .18773
                  .18335
                  .17912
                  .17503

                  58
                  .20265
                  .19798
                  .19347
                  .18911
                  .18490

                  59
                  .21343
                  .20863
                  .20400
                  .19951
                  .19518

                  60
                  .22460
                  .21968
                  .21492
                  .21032
                  .20586

                  61
                  .23620
                  .23117
                  .22629
                  .22156
                  .21698

                  62
                  .24824
                  .24309
                  .23810
                  .23325
                  .22856

                  63
                  .26073
                  .25546
                  .25036
                  .24540
                  .24060

                  64
                  .27364
                  .26827
                  .26306
                  .25800
                  .25308

                  65
                  .28696
                  .28150
                  .27619
                  .27103
                  .26601

                  66
                  .30070
                  .29515
                  .28974
                  .28449
                  .27937

                  67
                  .31483
                  .30919
                  .30371
                  .29836
                  .29316

                  68
                  .32936
                  .32365
                  .31808
                  .31266
                  .30737

                  69
                  .34432
                  .33854
                  .33290
                  .32741
                  .32204

                  70
                  .35972
                  .35389
                  .34820
                  .34264
                  .33721

                  71
                  .37565
                  .36977
                  .36403
                  .35842
                  .35294

                  72
                  .39210
                  .38619
                  .38042
                  .37477
                  .36924

                  73
                  .40900
                  .40308
                  .39728
                  .39161
                  .38605

                  74
                  .42618
                  .42025
                  .41444
                  .40876
                  .40318

                  75
                  .44345
                  .43753
                  .43173
                  .42604
                  .42046

                  76
                  .46073
                  .45483
                  .44904
                  .44336
                  .43779

                  77
                  .47799
                  .47212
                  .46635
                  .46069
                  .45513

                  78
                  .49524
                  .48941
                  .48368
                  .47805
                  .47252

                  79
                  .51256
                  .50678
                  .50110
                  .49551
                  .49001

                  80
                  .53001
                  .52429
                  .51867
                  .51313
                  .50769

                  81
                  .54745
                  .54181
                  .53626
                  .53079
                  .52541

                  82
                  .56476
                  .55921
                  .55374
                  .54835
                  .54303

                  83
                  .58193
                  .57648
                  .57110
                  .56579
                  .56056

                  84
                  .59907
                  .59373
                  .58845
                  .58325
                  .57811

                  85
                  .61624
                  .61102
                  .60586
                  .60077
                  .59574

                  86
                  .63300
                  .62791
                  .62289
                  .61791
                  .61300

                  87
                  .64883
                  .64387
                  .63896
                  .63411
                  .62932

                  88
                  .66363
                  .65880
                  .65402
                  .64929
                  .64461

                  89
                  .67775
                  .67304
                  .66838
                  .66377
                  .65921

                  90
                  .69160
                  .68703
                  .68250
                  .67802
                  .67357

                  91
                  .70509
                  .70066
                  .69626
                  .69191
                  .68760

                  92
                  .71775
                  .71345
                  .70919
                  .70496
                  .70078

                  93
                  .72929
                  .72512
                  .72099
                  .71689
                  .71282

                  94
                  .73964
                  .73559
                  .73157
                  .72758
                  .72362

                  95
                  .74867
                  .74472
                  .74081
                  .73692
                  .73306

                  96
                  .75625
                  .75239
                  .74856
                  .74476
                  .74099

                  97
                  .76303
                  .75925
                  .75550
                  .75177
                  .74807

                  98
                  .76892
                  .76521
                  .76152
                  .75786
                  .75422

                  99
                  .77443
                  .77078
                  .76715
                  .76355
                  .75998

                  100
                  .77990
                  .77631
                  .77275
                  .76921
                  .76569

                  101
                  .78463
                  .78109
                  .77757
                  .77407
                  .77060

                  102
                  .78971
                  .78622
                  .78275
                  .77930
                  .77587

                  103
                  .79629
                  .79287
                  .78947
                  .78608
                  .78272

                  104
                  .80244
                  .79907
                  .79572
                  .79239
                  .78907

                  105
                  .81198
                  .80871
                  .80546
                  .88222
                  .79900

                  106
                  .82792
                  .82485
                  .82180
                  .81876
                  .81572

                  107
                  .85057
                  .84783
                  .84509
                  .84237
                  .83964

                  108
                  .88740
                  .88526
                  .88312
                  .88098
                  .87885

                  109
                  .94900
                  .94800
                  .94700
                  .94600
                  .94500

                Table E

                  Table E—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Unitrust Having the Adjusted Payout Rate Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Adjusted payout rate
                  11.2%
                  11.4%
                  11.6%
                  11.8%
                  12.0%

                  0
                  .02487
                  .02466
                  .02447
                  .02429
                  .02412

                  1
                  .00686
                  .00666
                  .00648
                  .00631
                  .00615

                  2
                  .00641
                  .00620
                  .00601
                  .00583
                  .00566

                  3
                  .00631
                  .00609
                  .00589
                  .00570
                  .00552

                  4
                  .00637
                  .00614
                  .00593
                  .00573
                  .00554

                  5
                  .00657
                  .00633
                  .00610
                  .00588
                  .00568

                  6
                  .00687
                  .00661
                  .00637
                  .00614
                  .00593

                  7
                  .00724
                  .00696
                  .00670
                  .00646
                  .00623

                  8
                  .00770
                  .00740
                  .00713
                  .00687
                  .00663

                  9
                  .00827
                  .00795
                  .00766
                  .00739
                  .00713

                  10
                  .00894
                  .00861
                  .00830
                  .00800
                  .00773

                  11
                  .00974
                  .00939
                  .00906
                  .00875
                  .00846

                  12
                  .01066
                  .01029
                  .00993
                  .00961
                  .00929

                  13
                  .01164
                  .01124
                  .01087
                  .01052
                  .01019

                  14
                  .01262
                  .01220
                  .01181
                  .01144
                  .01109

                  15
                  .01355
                  .01311
                  .01270
                  .01231
                  .01194

                  16
                  .01440
                  .01394
                  .01350
                  .01309
                  .01271

                  17
                  .01516
                  .01467
                  .01421
                  .01378
                  .01337

                  18
                  .01585
                  .01534
                  .01485
                  .01440
                  .01397

                  19
                  .01651
                  .01597
                  .01546
                  .01498
                  .01453

                  20
                  .01719
                  .01662
                  .01608
                  .01557
                  .01510

                  21
                  .01789
                  .01728
                  .01672
                  .01618
                  .01568

                  22
                  .01861
                  .01797
                  .01737
                  .01680
                  .01627

                  23
                  .01938
                  .01870
                  .01806
                  .01746
                  .01689

                  24
                  .02023
                  .01951
                  .01883
                  .01819
                  .01759

                  25
                  .02121
                  .02045
                  .01973
                  .01905
                  .01841

                  26
                  .02236
                  .02155
                  .02078
                  .02006
                  .01938

                  27
                  .02368
                  .02282
                  .02200
                  .02124
                  .02051

                  28
                  .02521
                  .02429
                  .02342
                  .02261
                  .02183

                  29
                  .02689
                  .02591
                  .02499
                  .02412
                  .02330

                  30
                  .02875
                  .02772
                  .02674
                  .02581
                  .02494

                  31
                  .03076
                  .02966
                  .02863
                  .02764
                  .02671

                  32
                  .03297
                  .03180
                  .03070
                  .02965
                  .02866

                  33
                  .03536
                  .03412
                  .03295
                  .03184
                  .03079

                  34
                  .03794
                  .03663
                  .03539
                  .03421
                  .03309

                  35
                  .04074
                  .03935
                  .03803
                  .03678
                  .03559

                  36
                  .04375
                  .04228
                  .04089
                  .03956
                  .03830

                  37
                  .04699
                  .04543
                  .04395
                  .04255
                  .04122

                  38
                  .05044
                  .04879
                  .04723
                  .04575
                  .04433

                  39
                  .05411
                  .05238
                  .5073
                  .04916
                  .04766

                  40
                  .05802
                  .05620
                  .05445
                  .05279
                  .05121

                  41
                  .06219
                  .06026
                  .05843
                  .05668
                  .05550

                  42
                  .06665
                  .06462
                  .06269
                  .06084
                  .05908

                  43
                  .07138
                  .06924
                  .06721
                  .06526
                  .06341

                  44
                  .07639
                  .07415
                  .07202
                  .06997
                  .06801

                  45
                  .08168
                  .07933
                  .07708
                  .07493
                  .07287

                  46
                  .08726
                  .08480
                  .08244
                  .08018
                  .07802

                  47
                  .09313
                  .09056
                  .08809
                  .08572
                  .08345

                  48
                  .09935
                  .09666
                  .09408
                  .09160
                  .08922

                  49
                  .10591
                  .10309
                  .10039
                  .09780
                  .09531

                  50
                  .11282
                  .10989
                  .10707
                  .10436
                  .10176

                  51
                  .12009
                  .11703
                  .11409
                  .11127
                  .10855

                  52
                  .12772
                  .12454
                  .12147
                  .11853
                  .11569

                  53
                  .13571
                  .13340
                  .12922
                  .12615
                  .12319

                  54
                  .14403
                  .14060
                  .13729
                  .13410
                  .13102

                  55
                  .15270
                  .14914
                  .14571
                  .14240
                  .13920

                  56
                  .16171
                  .15802
                  .15447
                  .15103
                  .14771

                  57
                  .17109
                  .16728
                  .16360
                  .16004
                  .15660

                  58
                  .18083
                  .17690
                  .17309
                  .16941
                  .16585

                  59
                  .19098
                  .18692
                  .18299
                  .17919
                  .17551

                  60
                  .20154
                  .19736
                  .19331
                  .18938
                  .18558

                  61
                  .21254
                  .20824
                  .20407
                  .20003
                  .19610

                  62
                  .22400
                  .21958
                  .21530
                  .21113
                  .20709

                  63
                  .23593
                  .23139
                  .22699
                  .22272
                  .21856

                  64
                  .24830
                  .24366
                  .23915
                  .23476
                  .23050

                  65
                  .26113
                  .25638
                  .25176
                  .24727
                  .24290

                  66
                  .27439
                  .26955
                  .26483
                  .26023
                  .25576

                  67
                  .28808
                  .28314
                  .27833
                  .27364
                  .26906

                  68
                  .30221
                  .29718
                  .29228
                  .28750
                  .28283

                  69
                  .31681
                  .31170
                  .30672
                  .30185
                  .29710

                  70
                  .33190
                  .32673
                  .32167
                  .31672
                  .31189

                  71
                  .34758
                  .34234
                  .33721
                  .33220
                  .32731

                  72
                  .36384
                  35855
                  .35337
                  .34831
                  .34335

                  73
                  .38061
                  .37529
                  .37007
                  .36496
                  .35996

                  74
                  .39772
                  .39237
                  .38713
                  .38199
                  .37695

                  75
                  .41499
                  .40962
                  .40436
                  .39920
                  .39413

                  76
                  .43232
                  .42695
                  .42168
                  .41650
                  .41142

                  77
                  .44967
                  .44431
                  .43904
                  .43386
                  .42878

                  78
                  .46708
                  .46173
                  .45647
                  .45130
                  .44622

                  79
                  .48460
                  .47928
                  .47405
                  .46890
                  .46383

                  80
                  .50232
                  .49705
                  .49185
                  .48673
                  .48169

                  81
                  .52010
                  .51487
                  .50973
                  .50465
                  .49965

                  82
                  .53779
                  .53263
                  .52754
                  .52252
                  .51757

                  83
                  .55540
                  .55031
                  .54529
                  .54033
                  .53544

                  84
                  .57304
                  .56804
                  .56309
                  .55822
                  .55340

                  85
                  .59077
                  .58586
                  .58102
                  .57623
                  .57150

                  86
                  .60815
                  .60335
                  .59860
                  .59392
                  .58928

                  87
                  .62458
                  .61989
                  .61525
                  .61066
                  .60613

                  88
                  .63998
                  .63540
                  .63086
                  .62638
                  .62194

                  89
                  .65469
                  .65022
                  .64579
                  .64141
                  .63707

                  90
                  .66918
                  .66482
                  .66050
                  .65623
                  .65199

                  91
                  .68332
                  .67909
                  .67489
                  .67073
                  .66661

                  92
                  .69662
                  .69251
                  .68843
                  .68439
                  .68038

                  93
                  .70879
                  .70479
                  .70082
                  .69689
                  .69299

                  94
                  .71970
                  .71581
                  .71195
                  .70812
                  .70432

                  95
                  .72924
                  .72544
                  .72167
                  .71793
                  .71422

                  96
                  .73724
                  .73353
                  .72984
                  .72618
                  .72254

                  97
                  .74440
                  .74076
                  .73714
                  .73354
                  .72998

                  98
                  .75061
                  .74703
                  .74347
                  .73994
                  .73643

                  99
                  .75642
                  .75290
                  .74939
                  .74591
                  .74245

                  100
                  .76219
                  .75872
                  .75527
                  .75184
                  .74844

                  101
                  .76715
                  .76372
                  .76031
                  .75692
                  .75356

                  102
                  .77246
                  .76908
                  .76571
                  .76236
                  .75904

                  103
                  .77937
                  .77605
                  .77274
                  .76945
                  .76618

                  104
                  .78577
                  .78249
                  .77923
                  .77598
                  .77275

                  105
                  .79579
                  .79259
                  .78941
                  .78625
                  .78310

                  106
                  .81270
                  .80969
                  .80670
                  .80371
                  .80073

                  107
                  .83693
                  .83422
                  .83152
                  .82883
                  .82614

                  108
                  .87672
                  .87459
                  .87246
                  .87034
                  .86822

                  109
                  .94400
                  .94300
                  .94200
                  .94100
                  .94000

                Table E

                  Table E—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Unitrust Having the Adjusted Payout Rate Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Adjusted payout rate
                  12.2%
                  12.4%
                  12.6%
                  12.8%
                  13.0%

                  0
                  .02396
                  .02380
                  .02366
                  .02352
                  .02338

                  1
                  .00600
                  .00585
                  .00572
                  .00559
                  .00547

                  2
                  .00550
                  .00535
                  .00521
                  .00508
                  .00495

                  3
                  .00536
                  .00520
                  .00505
                  .00491
                  .00478

                  4
                  .00536
                  .00519
                  .00504
                  .00489
                  .00475

                  5
                  .00549
                  .00532
                  .00515
                  .00499
                  .00484

                  6
                  .00572
                  .00554
                  .00536
                  .00519
                  .00503

                  7
                  .00602
                  .00582
                  .00563
                  .00545
                  .00528

                  8
                  .00640
                  .00618
                  .00598
                  .00579
                  .00561

                  9
                  .00688
                  .00665
                  .00644
                  .00623
                  .00604

                  10
                  .00747
                  .00723
                  .00699
                  .00678
                  .00657

                  11
                  .00818
                  .00792
                  .00767
                  .00744
                  .00722

                  12
                  .00900
                  .00873
                  .00846
                  .00822
                  .00798

                  13
                  .00988
                  .00959
                  .00931
                  .00905
                  .00880

                  14
                  .01077
                  .01046
                  .01017
                  .00989
                  .00963

                  15
                  .01160
                  .01127
                  .01097
                  .01067
                  .01040

                  16
                  .01234
                  .01200
                  .01167
                  .01137
                  .01108

                  17
                  .01299
                  .01263
                  .01229
                  .01197
                  .01166

                  18
                  .01357
                  .01319
                  .01283
                  .01249
                  .01217

                  19
                  .01410
                  .01370
                  .01332
                  .01297
                  .01263

                  20
                  .01465
                  .01422
                  .01382
                  .01345
                  .01309

                  21
                  .01520
                  .01475
                  .01433
                  .01393
                  .01355

                  22
                  .01576
                  .01529
                  .01484
                  .01442
                  .01402

                  23
                  .01636
                  .01586
                  .01538
                  .01493
                  .01450

                  24
                  .01703
                  .01649
                  .01599
                  .01551
                  .01505

                  25
                  .01781
                  .01724
                  .01670
                  .01619
                  .01571

                  26
                  .01874
                  .01813
                  .01756
                  .01701
                  .01650

                  27
                  .01983
                  .01918
                  .01857
                  .01799
                  .01744

                  28
                  .02111
                  .02042
                  .01976
                  .01915
                  .01856

                  29
                  .02253
                  .02179
                  .02110
                  .02044
                  .01981

                  30
                  .02411
                  .02333
                  .02259
                  .02188
                  .02121

                  31
                  .02583
                  .02500
                  .02421
                  .02345
                  .02274

                  32
                  .02772
                  .02683
                  .02599
                  .02519
                  .02443

                  33
                  .02979
                  .02885
                  .02795
                  .02709
                  .02628

                  34
                  .03203
                  .03102
                  .03006
                  .02915
                  .02829

                  35
                  .03447
                  .03340
                  .03238
                  .03141
                  .03048

                  36
                  .03710
                  .03597
                  .03488
                  .03385
                  .03286

                  37
                  .03995
                  .03874
                  .03758
                  .03649
                  .03544

                  38
                  .04299
                  .04170
                  .04048
                  .03931
                  .03820

                  39
                  .04623
                  .04487
                  .04358
                  .04234
                  .04115

                  40
                  .04970
                  .04826
                  .04689
                  .04558
                  .04432

                  41
                  .05341
                  .05189
                  .05043
                  .04904
                  .04771

                  42
                  .05739
                  .05578
                  .05424
                  .05277
                  .05136

                  43
                  .06163
                  .05993
                  .05830
                  .05674
                  .05525

                  44
                  .06614
                  .06435
                  .06263
                  .06099
                  .05941

                  45
                  .07090
                  .06901
                  .06720
                  .06547
                  .06380

                  46
                  .07595
                  .07396
                  .07206
                  .07023
                  .06847

                  47
                  .08128
                  .07919
                  .07718
                  .07525
                  .07340

                  48
                  .08693
                  .08474
                  .08263
                  .08061
                  .07866

                  49
                  .09291
                  .09061
                  .08840
                  .08627
                  .08423

                  50
                  .09925
                  .09684
                  .09452
                  .09229
                  .09014

                  51
                  .10593
                  .10341
                  .10098
                  .09864
                  .09638

                  52
                  .11296
                  .11032
                  .10778
                  .10534
                  .10297

                  53
                  .12034
                  .11759
                  .11494
                  .11238
                  .10991

                  54
                  .12805
                  .12519
                  .12243
                  .11976
                  .11718

                  55
                  .13611
                  .13313
                  .13025
                  .12747
                  .12478

                  56
                  .14451
                  .14141
                  .13841
                  .13551
                  .13271

                  57
                  .15327
                  .15005
                  .14694
                  .14393
                  .14101

                  58
                  .16240
                  .15906
                  .15583
                  .15270
                  .14967

                  59
                  .17194
                  .16848
                  .16513
                  .16189
                  .15874

                  60
                  .18189
                  .17831
                  .17485
                  .17148
                  .16822

                  61
                  .19230
                  .18860
                  .18502
                  .18154
                  .17816

                  62
                  .20317
                  .19936
                  .19566
                  .19207
                  .18857

                  63
                  .21453
                  .21060
                  .20679
                  .20308
                  .19947

                  64
                  .22635
                  .22231
                  .21839
                  .21457
                  .21085

                  65
                  .23864
                  .23450
                  .23046
                  .22653
                  .22271

                  66
                  .25140
                  .24715
                  .24301
                  .23898
                  .23505

                  67
                  .26461
                  .26026
                  .25602
                  .25188
                  .24785

                  68
                  .27828
                  .27384
                  .26950
                  .26527
                  .26114

                  69
                  .29246
                  .28793
                  .28350
                  .27918
                  .27496

                  70
                  .30718
                  .30256
                  .29805
                  .29364
                  .28933

                  71
                  .32251
                  .31783
                  .31324
                  .30876
                  .30437

                  72
                  .33850
                  .33375
                  .32910
                  .32455
                  .32009

                  73
                  .35506
                  .35026
                  .34555
                  .34094
                  .33642

                  74
                  .37201
                  .36716
                  .36241
                  .35776
                  .35319

                  75
                  .38916
                  .38429
                  .37950
                  .37481
                  .37020

                  76
                  .40644
                  .40154
                  .39673
                  .39200
                  .38737

                  77
                  .42378
                  .41887
                  .41404
                  .40930
                  .40464

                  78
                  .44123
                  .43631
                  .43148
                  .42673
                  .42205

                  79
                  .45885
                  .45394
                  .44911
                  .44436
                  .43969

                  80
                  .47673
                  .47184
                  .46703
                  .46229
                  .45763

                  81
                  .49473
                  .48987
                  .48509
                  .48037
                  .47573

                  82
                  .51269
                  .50787
                  .50313
                  .49845
                  .49383

                  83
                  .53062
                  .52586
                  .52116
                  .51653
                  .51195

                  84
                  .54864
                  .54395
                  .53931
                  .53473
                  .53021

                  85
                  .56683
                  .56221
                  .55765
                  .55314
                  .54869

                  86
                  .58470
                  .58017
                  .57570
                  .57127
                  .56689

                  87
                  .60164
                  .59720
                  .59281
                  .58847
                  .58417

                  88
                  .61754
                  .61320
                  .60889
                  .60464
                  .60042

                  89
                  .63277
                  .62851
                  .62430
                  .62013
                  .61600

                  90
                  .64780
                  .64364
                  .63953
                  .63545
                  .63141

                  91
                  .66252
                  .65848
                  .65446
                  .65049
                  .64655

                  92
                  .67640
                  .67246
                  .66856
                  .66468
                  .66084

                  93
                  .68912
                  .68528
                  .68148
                  .67770
                  .67396

                  94
                  .70055
                  .69680
                  .69309
                  .68941
                  .68576

                  95
                  .71054
                  .70689
                  .70326
                  .69966
                  .69609

                  96
                  .71893
                  .71535
                  .71180
                  .70827
                  .70476

                  97
                  .72643
                  .72292
                  .71943
                  .71596
                  .71252

                  98
                  .73294
                  .72948
                  .72604
                  .72263
                  .71924

                  99
                  .73902
                  .73561
                  .73222
                  .72886
                  .72551

                  100
                  .74506
                  .74170
                  .73836
                  .73504
                  .73174

                  101
                  .75021
                  .74689
                  .74359
                  .74030
                  .73704

                  102
                  .75573
                  .75244
                  .74918
                  .74593
                  .74270

                  103
                  .76293
                  .75970
                  .75649
                  .75329
                  .75011

                  104
                  .76954
                  .76634
                  .76316
                  .76000
                  .75685

                  105
                  .77996
                  .77684
                  .77373
                  .77064
                  .76756

                  106
                  .79777
                  .79481
                  .79187
                  .78894
                  .78602

                  107
                  .82346
                  .82078
                  .81812
                  .81546
                  .81281

                  108
                  .86610
                  .86398
                  .86187
                  .85976
                  .85765

                  109
                  .93900
                  .93800
                  .93700
                  .93600
                  .93500

                Table E

                  Table E—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Unitrust Having the Adjusted Payout Rate Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Age
                  (2) Adjusted payout rate
                  13.2%
                  13.4%
                  13.6%
                  13.8%
                  14.0%

                  0
                  .02325
                  .02313
                  .02301
                  .02290
                  .02279

                  1
                  .00536
                  .00525
                  .00514
                  .00505
                  .00495

                  2
                  .00484
                  .00472
                  .00462
                  .00451
                  .00442

                  3
                  .00465
                  .00453
                  .00442
                  .00431
                  .00421

                  4
                  .00461
                  .00449
                  .00437
                  .00426
                  .00415

                  5
                  .00470
                  .00457
                  .00444
                  .00432
                  .00421

                  6
                  .00488
                  .00474
                  .00460
                  .00447
                  .00435

                  7
                  .00512
                  .00496
                  .00482
                  .00468
                  .00455

                  8
                  .00543
                  .00527
                  .00512
                  .00497
                  .00483

                  9
                  .00585
                  .00568
                  .00551
                  .00536
                  .00521

                  10
                  .00637
                  .00619
                  .00601
                  .00584
                  .00568

                  11
                  .00701
                  .00681
                  .00662
                  .00644
                  .00627

                  12
                  .00776
                  .00755
                  .00735
                  .00716
                  .00697

                  13
                  .00857
                  .00734
                  .00813
                  .00793
                  .00773

                  14
                  .00938
                  .00914
                  .00892
                  .00870
                  .00850

                  15
                  .01014
                  .00989
                  .00965
                  .00942
                  .00921

                  16
                  .01080
                  .01054
                  .01029
                  .01005
                  .00983

                  17
                  .01137
                  .01109
                  .01083
                  .01058
                  .01035

                  18
                  .01186
                  .01157
                  .01130
                  .01103
                  .01078

                  19
                  .01230
                  .01300
                  .01171
                  .01143
                  .01117

                  20
                  .01275
                  .01243
                  .01212
                  .01183
                  .01155

                  21
                  .01319
                  .01285
                  .01253
                  .01222
                  .01193

                  22
                  .01364
                  .01328
                  .01293
                  .01261
                  .01230

                  23
                  .01410
                  .01372
                  .01336
                  .01301
                  .01268

                  24
                  .01463
                  .01422
                  .01383
                  .01347
                  .01312

                  25
                  .01525
                  .01482
                  .01441
                  .01401
                  .01364

                  26
                  .01601
                  .01555
                  .01511
                  .01469
                  .01430

                  27
                  .01692
                  .01643
                  .01596
                  .01551
                  .01509

                  28
                  .01800
                  .01748
                  .01697
                  .01650
                  .01604

                  29
                  .01922
                  .01865
                  .01812
                  .01760
                  .01712

                  30
                  .02058
                  .01998
                  .01940
                  .01886
                  .01833

                  31
                  .02206
                  .02142
                  .02080
                  .02022
                  .01966

                  32
                  .02370
                  .02301
                  .02236
                  .02173
                  .02113

                  33
                  .02550
                  .02477
                  .02407
                  .02340
                  .02276

                  34
                  .02746
                  .02667
                  .02592
                  .02521
                  .02452

                  35
                  .02960
                  .02876
                  .02796
                  .02719
                  .02646

                  36
                  .03193
                  .03103
                  .03017
                  .02936
                  .02858

                  37
                  .03444
                  .03348
                  .03257
                  .03170
                  .03087

                  38
                  .03714
                  .03612
                  .03515
                  .03422
                  .03333

                  39
                  .04002
                  .03894
                  .03791
                  .03692
                  .03597

                  40
                  .04312
                  .04197
                  .04087
                  .03891
                  .03880

                  41
                  .04643
                  .04521
                  .04404
                  .04292
                  .04185

                  42
                  .05001
                  .04871
                  .04747
                  .04628
                  .04514

                  43
                  .05382
                  .05245
                  .05113
                  .04987
                  .04865

                  44
                  .05789
                  .05644
                  .05505
                  .05371
                  .05242

                  45
                  .06220
                  .06067
                  .05919
                  .05777
                  .05641

                  46
                  .06678
                  .06516
                  .06360
                  .06210
                  .06065

                  47
                  .07162
                  .06991
                  .06826
                  .06668
                  .06515

                  48
                  .07678
                  .07498
                  .07324
                  .07157
                  .06996

                  49
                  .08225
                  .08035
                  .07852
                  .07676
                  .07506

                  50
                  .08807
                  .08607
                  .08415
                  .08229
                  .08050

                  51
                  .09421
                  .09211
                  .09009
                  .08814
                  .08625

                  52
                  .10070
                  .09850
                  .09637
                  .09432
                  .09234

                  53
                  .10753
                  .10523
                  .10300
                  .10085
                  .09877

                  54
                  .11468
                  .11227
                  .10994
                  .10769
                  .10551

                  55
                  .12218
                  .11966
                  .11722
                  .11487
                  .11258

                  56
                  .12999
                  .12737
                  .12483
                  .12236
                  .11998

                  57
                  .13818
                  .13545
                  .13279
                  .13022
                  .12773

                  58
                  .14673
                  .14388
                  .14112
                  .13844
                  .13584

                  59
                  .15568
                  .15272
                  .14985
                  .14706
                  .14435

                  60
                  .16505
                  .16198
                  .15899
                  .15609
                  .15327

                  61
                  .17488
                  .17169
                  .16859
                  .16558
                  .16265

                  62
                  .18518
                  .18187
                  .17866
                  .17554
                  .17251

                  63
                  .19596
                  .19255
                  .18923
                  .18600
                  .18285

                  64
                  .20723
                  .20371
                  .20028
                  .19694
                  .19368

                  65
                  .21898
                  .21535
                  .21181
                  .20836
                  .20500

                  66
                  .23121
                  .22748
                  .22383
                  .22028
                  .21681

                  67
                  .24392
                  .24008
                  .23633
                  .23267
                  .22910

                  68
                  .25711
                  .25317
                  .24932
                  .24556
                  .24189

                  69
                  .27083
                  .26680
                  .26285
                  .25900
                  .25523

                  70
                  .28512
                  .28100
                  .27697
                  .27302
                  .26916

                  71
                  .30007
                  .29587
                  .29176
                  .28773
                  .28378

                  72
                  .31572
                  .31145
                  .30726
                  .30315
                  .29913

                  73
                  .33199
                  .32765
                  .32340
                  .31923
                  .31514

                  74
                  .34871
                  .34431
                  .34000
                  .33577
                  .33162

                  75
                  .36568
                  .36124
                  .35688
                  .35260
                  .34840

                  76
                  .38281
                  .37833
                  .37393
                  .36961
                  .36537

                  77
                  .40006
                  .39555
                  .39113
                  .38677
                  .38249

                  78
                  .41745
                  .41293
                  .40848
                  .40410
                  .39980

                  79
                  .43508
                  .43055
                  .42609
                  .42170
                  .41737

                  80
                  .45303
                  .44850
                  .44404
                  .43964
                  .43531

                  81
                  .47115
                  .46663
                  .46218
                  .45779
                  .45347

                  82
                  .48928
                  .48479
                  .48036
                  .47599
                  .47168

                  83
                  .50744
                  .50298
                  .49858
                  .49424
                  .48995

                  84
                  .52575
                  .52134
                  .51698
                  .51268
                  .50843

                  85
                  .54429
                  .53994
                  .53564
                  .53139
                  .52720

                  86
                  .56257
                  .55829
                  .55406
                  .54988
                  .54574

                  87
                  .57993
                  .57572
                  .57156
                  .56745
                  .56338

                  88
                  .59625
                  .59212
                  .58804
                  .58399
                  .57999

                  89
                  .61191
                  .60786
                  .60384
                  .59987
                  .59594

                  90
                  .62741
                  .62344
                  .61952
                  .61562
                  .61177

                  91
                  .64264
                  .63877
                  .63493
                  .63113
                  .62736

                  92
                  .65703
                  .65326
                  .64951
                  .64580
                  .64212

                  93
                  .67024
                  .66656
                  .66291
                  .65928
                  .65568

                  94
                  .68213
                  .67854
                  .67497
                  .67142
                  .66791

                  95
                  .69255
                  .68903
                  .68554
                  .68207
                  .67863

                  96
                  .70128
                  .69783
                  .69440
                  .69100
                  .68762

                  97
                  .70910
                  .70570
                  .70233
                  .69899
                  .69566

                  98
                  .71587
                  .71252
                  .70920
                  .70590
                  .70263

                  99
                  .72219
                  .71889
                  .71562
                  .71236
                  .70913

                  100
                  .72847
                  .72522
                  .72189
                  .71877
                  .71558

                  101
                  .73380
                  .73058
                  .72738
                  .72420
                  .72104

                  102
                  .73949
                  .73630
                  .73313
                  .72998
                  .72685

                  103
                  .74695
                  .74381
                  .74068
                  .73758
                  .73449

                  104
                  .75372
                  .75060
                  .74751
                  .74442
                  .74136

                  105
                  .76449
                  .76144
                  .75840
                  .75538
                  .75237

                  106
                  .78311
                  .78021
                  .77732
                  .77444
                  .77157

                  107
                  .81016
                  .80752
                  .80489
                  .80227
                  .79965

                  108
                  .85554
                  .85344
                  .85134
                  .84924
                  .84715

                  109
                  .93400
                  .93300
                  .93200
                  .93100
                  .93000

                Table F(1)

                  Table F(1)—10 Percent—Table Showing Factors for Computations of the Adjusted Payout Rate for Certain Valuations and Payout Sequences—Applicable for Transfers After November 30, 1983, and Before May 1, 1989

                  (1) Number of months by which the valuation date precedes the first payout
                  At least
                  But less than
                  (2) Factors for payout at the end of each
                  Annual period
                  Semiannual period
                  Quarterly period
                  Monthly period

                  1

                  .976731
                  .965232
                  .957616

                  1
                  2
                  .992089
                  .969004
                  .957596
                  .950041

                  2
                  3
                  .984240
                  .961338
                  .950021

                  3
                  4
                  .976454
                  .953733
                  .942505

                  4
                  5
                  .968729
                  .946188

                  5
                  6
                  .961066
                  .938703

                  6
                  7
                  .953463
                  .931277

                  7
                  8
                  .945920

                  8
                  9
                  .938436

                  9
                  10
                  .931012

                  10
                  11
                  .923647

                  11
                  12
                  .916340

                  12

                  .909091

              (e) Valuation of charitable remainder unitrusts having certain payout sequences for transfers for which the valuation date is after April 30, 1989, and before May 1, 1999—(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 after April 30, 1989, and before May 1, 1999, the present value of a remainder interest is determined under paragraphs (e)(3) through (e)(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) If the valuation date of a transfer to a charitable remainder unitrust is after April 30, 1989, and before June 10, 1994, a transferor can rely upon Notice 89-24, 1989-1 C.B. 660, or Notice 89-60, 1989-1 C.B. 700, in valuing the transferred interest. (See § 601.601(d)(2)(ii)(b) of this chapter.)
              (ii) For purposes of sections 2055, 2106, or 2624, if on May 1, 1989, the decedent was mentally incompetent so that the disposition of the property could not be changed, and the decedent died after April 30, 1989, 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, 1989, the present value of a remainder interest determined under this section is determined as if the valuation date with respect to the decedent's gross estate is either before May 1, 1989, or after April 30, 1989, at the option of the decedent's executor.
              (3) Adjusted payout rate. For transfers for which the valuation date is after April 30, 1989, and before May 1, 1999, 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, 1989, and before May 1, 1999, 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 (e)(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, 1989, and before May 1, 1999, is the factor in Table U(1) in paragraph (e)(6) 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 rules provided in § 1.664-4(e)(5) apply for determining the present value of the remainder interest. See § 1.664-4(e)(5) for an example illustrating the application of this paragraph (e)(5)(using current actuarial tables).
              (6) Actuarial tables for transfers for which the valuation date is after April 30, 1989, and before May 1, 1999. For transfers for which the valuation date is after April 30, 1989, and before May 1, 1999, the present value of a charitable remainder unitrust interest that is dependent on a term of years or the termination of a life interest is determined by using the section 7520 rate and Table D, Tables F(4.2) through F(14.0) in § 1.664-4(e)(6) and Table U(1) of this paragraph (e)(6), as applicable. 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, Beta Volume,” (8-89). Publication 1458 is no longer available for purchase from the Superintendent of Documents, United States Government Printing Office, Washington, DC 20402. However, pertinent factors in this publication may be obtained by a written request to: CC:DOM:CORP:R (IRS Publication 1458), room 5226, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044.

                Table U(1)—Unitrust Single Life Remainder Factors—Based on Life Table 80CNSMT
                [Applicable for Transfers After April 30, 1989, and Before May 1, 1999]

                  Age
                  Adjusted payout rate
                  4.2%
                  4.4%
                  4.6%
                  4.8%
                  5.0%
                  5.2%
                  5.4%
                  5.6%
                  5.8%
                  6.0%

                  0
                  .06797
                  .06181
                  .05645
                  .05177
                  .04768
                  .04410
                  .04096
                  .03820
                  .03578
                  .03364

                  1
                  .05881
                  .05243
                  .04686
                  .04199
                  .03773
                  .03400
                  .03072
                  .02784
                  .02531
                  .02308

                  2
                  .06049
                  .05394
                  .04821
                  .04319
                  .03880
                  .03494
                  .03155
                  .02856
                  .02593
                  .02361

                  3
                  .06252
                  .05579
                  .04990
                  .04473
                  .04020
                  .03621
                  .03270
                  .02961
                  .02688
                  .02446

                  4
                  .06479
                  .05788
                  .05182
                  .04650
                  .04183
                  .03771
                  .03408
                  .03087
                  .02804
                  .02553

                  5
                  .06724
                  .06016
                  .05393
                  .04845
                  .04363
                  .03937
                  .03562
                  .03230
                  .02936
                  .02675

                  6
                  .06984
                  .06257
                  .05618
                  .05054
                  .04557
                  .04117
                  .03729
                  .03385
                  .03080
                  .02809

                  7
                  .07259
                  .06513
                  .05856
                  .05276
                  .04764
                  .04310
                  .03909
                  .03552
                  .03236
                  .02954

                  8
                  .07548
                  .06784
                  .06109
                  .05513
                  .04985
                  .04517
                  .04102
                  .03733
                  .03405
                  .03113

                  9
                  .07854
                  .07071
                  .06378
                  .05765
                  .05221
                  .04738
                  .04310
                  .03928
                  .03588
                  .03285

                  10
                  .08176
                  .07374
                  .06663
                  .06033
                  .05473
                  .04976
                  .04533
                  .04138
                  .03786
                  .03471

                  11
                  .08517
                  .07695
                  .06966
                  .06319
                  .05743
                  .05230
                  .04772
                  .04364
                  .04000
                  .03673

                  12
                  .08872
                  .08031
                  .07284
                  .06619
                  .06026
                  .05498
                  .05026
                  .04604
                  .04227
                  .03889

                  13
                  .09238
                  .08378
                  .07612
                  .06929
                  .06320
                  .05776
                  .05289
                  .04853
                  .04463
                  .04113

                  14
                  .09608
                  .08728
                  .07943
                  .07243
                  .06616
                  .06056
                  .05554
                  .05104
                  .04701
                  .04338

                  15
                  .09981
                  .09081
                  .08276
                  .07557
                  .06914
                  .06337
                  .05820
                  .05356
                  .04938
                  .04563

                  16
                  .10356
                  .09435
                  .08612
                  .07874
                  .07213
                  .06619
                  .06086
                  .05607
                  .05176
                  .04787

                  17
                  .10733
                  .09792
                  .08949
                  .08192
                  .07513
                  .06902
                  .06353
                  .05858
                  .05413
                  .05010

                  18
                  .11117
                  .10155
                  .09291
                  .08515
                  .07817
                  .07189
                  .06623
                  .06113
                  .05652
                  .05236

                  19
                  .11509
                  .10526
                  .09642
                  .08847
                  .08130
                  .07484
                  .06901
                  .06375
                  .05899
                  .05469

                  20
                  .11913
                  .10908
                  .10003
                  .09188
                  .08452
                  .07788
                  .07188
                  .06645
                  .06154
                  .05708

                  21
                  .12326
                  .11300
                  .10375
                  .09539
                  .08784
                  .08101
                  .07483
                  .06923
                  .06416
                  .05955

                  22
                  .12753
                  .11705
                  .10758
                  .09902
                  .09127
                  .08426
                  .07789
                  .07212
                  .06688
                  .06212

                  23
                  .13195
                  .12125
                  .11156
                  .10279
                  .09484
                  .08763
                  .08109
                  .07514
                  .06973
                  .06481

                  24
                  .13655
                  .12563
                  .11573
                  .10675
                  .09860
                  .09119
                  .08446
                  .07833
                  .07274
                  .06766

                  25
                  .14136
                  .13022
                  .12010
                  .11091
                  .10255
                  .09495
                  .08802
                  .08171
                  .07595
                  .07069

                  26
                  .14640
                  .13504
                  .12471
                  .11530
                  .10674
                  .09893
                  .09181
                  .08531
                  .07937
                  .07394

                  27
                  .15169
                  .14011
                  .12956
                  .11994
                  .11117
                  .10316
                  .09584
                  .08915
                  .08302
                  .07742

                  28
                  .15721
                  .14542
                  .13465
                  .12482
                  .11583
                  .10762
                  .10010
                  .09322
                  .08691
                  .08112

                  29
                  .16299
                  .15097
                  .13999
                  .12994
                  .12075
                  .11233
                  .10461
                  .09753
                  .09104
                  .08507

                  30
                  .16901
                  .15678
                  .14559
                  .13533
                  .12592
                  .11729
                  .10937
                  .10210
                  .09541
                  .08926

                  31
                  .17531
                  .16287
                  .15146
                  .14099
                  .13137
                  .12254
                  .11441
                  .10694
                  .10006
                  .09372

                  32
                  .18186
                  .16921
                  .15759
                  .14691
                  .13709
                  .12804
                  .11972
                  .11205
                  .10497
                  .09844

                  33
                  .18869
                  .17584
                  .16401
                  .15312
                  .14309
                  .13384
                  .12531
                  .11744
                  .11017
                  .10345

                  34
                  .19578
                  .18273
                  .17070
                  .15961
                  .14937
                  .13992
                  .13119
                  .12312
                  .11565
                  .10874

                  35
                  .20315
                  .18990
                  .17767
                  .16637
                  .15593
                  .14628
                  .13735
                  .12908
                  .12142
                  .11431

                  36
                  .21076
                  .19732
                  .18490
                  .17340
                  .16276
                  .15291
                  .14377
                  .13531
                  .12745
                  .12016

                  37
                  .21863
                  .20501
                  .19239
                  .18071
                  .16987
                  .15982
                  .15049
                  .14182
                  .13377
                  .12628

                  38
                  .22676
                  .21296
                  .20016
                  .18828
                  .17725
                  .16701
                  .15748
                  .14862
                  .14037
                  .13269

                  39
                  .23515
                  .22118
                  .20820
                  .19614
                  .18492
                  .17448
                  .16476
                  .15571
                  .14727
                  .13940

                  40
                  .24379
                  .22967
                  .21652
                  .20428
                  .19288
                  .18225
                  .17234
                  .16310
                  .15447
                  .14641

                  41
                  .25270
                  .23842
                  .22511
                  .21270
                  .20112
                  .19031
                  .18021
                  .17078
                  .16197
                  .15372

                  42
                  .26184
                  .24742
                  .23395
                  .22137
                  .20962
                  .19864
                  .18836
                  .17875
                  .16975
                  .16132

                  43
                  .27123
                  .25666
                  .24305
                  .23031
                  .21840
                  .20724
                  .19679
                  .18700
                  .17782
                  .16921

                  44
                  .28085
                  .26616
                  .25241
                  .23952
                  .22745
                  .21613
                  .20551
                  .19554
                  .18618
                  .17739

                  45
                  .29072
                  .27591
                  .26203
                  .24901
                  .23678
                  .22530
                  .21452
                  .20438
                  .19485
                  .18589

                  46
                  .30082
                  .28591
                  .27191
                  .25875
                  .24639
                  .23476
                  .22381
                  .21352
                  .20382
                  .19468

                  47
                  .31116
                  .29616
                  .28204
                  .26877
                  .25626
                  .24449
                  .23340
                  .22295
                  .21309
                  .20379

                  48
                  .32171
                  .30663
                  .29241
                  .27902
                  .26640
                  .25449
                  .24326
                  .23265
                  .22264
                  .21318

                  49
                  .33245
                  .31730
                  .30300
                  .28950
                  .27676
                  .26473
                  .25336
                  .24262
                  .23246
                  .22285

                  50
                  .34338
                  .32816
                  .31379
                  .30020
                  .28735
                  .27521
                  .26371
                  .25283
                  .24253
                  .23277

                  51
                  .35449
                  .33923
                  .32479
                  .31112
                  .29818
                  .28593
                  .27431
                  .26331
                  .25287
                  .24297

                  52
                  .36582
                  .35053
                  .33603
                  .32230
                  .30927
                  .29692
                  .28520
                  .27408
                  .26352
                  .25349

                  53
                  .37736
                  .36205
                  .34751
                  .33372
                  .32063
                  .30819
                  .29637
                  .28514
                  .27446
                  .26431

                  54
                  .38909
                  .37376
                  .35921
                  .34537
                  .33221
                  .31970
                  .30780
                  .29647
                  .28569
                  .27542

                  55
                  .40099
                  .38568
                  .37111
                  .35724
                  .34404
                  .33146
                  .31949
                  .30807
                  .29719
                  .28681

                  56
                  .41308
                  .39779
                  .38322
                  .36934
                  .35610
                  .34348
                  .33143
                  .31994
                  .30898
                  .29851

                  57
                  .42536
                  .41011
                  .39555
                  .38167
                  .36841
                  .35575
                  .34366
                  .33210
                  .32106
                  .31051

                  58
                  .43781
                  .42262
                  .40810
                  .39422
                  .38096
                  .36828
                  .35615
                  .34454
                  .33344
                  .32281

                  59
                  .45043
                  .43530
                  .42083
                  .40698
                  .39373
                  .38104
                  .36888
                  .35724
                  .34609
                  .33540

                  60
                  .46318
                  .44813
                  .43372
                  .41992
                  .40668
                  .39400
                  .38183
                  .37017
                  .35898
                  .34824

                  61
                  .47602
                  .46107
                  .44674
                  .43299
                  .41979
                  .40713
                  .39497
                  .38329
                  .37207
                  .36129

                  62
                  .48893
                  .47410
                  .45986
                  .44617
                  .43303
                  .42039
                  .40825
                  .39657
                  .38534
                  .37454

                  63
                  .50190
                  .48720
                  .47306
                  .45946
                  .44638
                  .43379
                  .42168
                  .41001
                  .39878
                  .38796

                  64
                  .51494
                  .50038
                  .48636
                  .47286
                  .45986
                  .44733
                  .43526
                  .42362
                  .41240
                  .40158

                  65
                  .52808
                  .51368
                  .49980
                  .48641
                  .47350
                  .46104
                  .44903
                  .43743
                  .42624
                  .41544

                  66
                  .54134
                  .52711
                  .51338
                  .50013
                  .48733
                  .47496
                  .46302
                  .45148
                  .44033
                  .42956

                  67
                  .55471
                  .54068
                  .52712
                  .51401
                  .50134
                  .48908
                  .47723
                  .46577
                  .45467
                  .44394

                  68
                  .56820
                  .55437
                  .54100
                  .52805
                  .51552
                  .50339
                  .49165
                  .48027
                  .46925
                  .45858

                  69
                  .58172
                  .56812
                  .55495
                  .54219
                  .52982
                  .51783
                  .50620
                  .49494
                  .48401
                  .47341

                  70
                  .59526
                  .58190
                  .56894
                  .55637
                  .54417
                  .53234
                  .52086
                  .50971
                  .49889
                  .48838

                  71
                  .60874
                  .59564
                  .58291
                  .57055
                  .55854
                  .54687
                  .53554
                  .52453
                  .51382
                  .50342

                  72
                  .62218
                  .60934
                  .59685
                  .58471
                  .57291
                  .56143
                  .55026
                  .53939
                  .52882
                  .51854

                  73
                  .63557
                  .62301
                  .61078
                  .59887
                  .58728
                  .57600
                  .56501
                  .55431
                  .54389
                  .53373

                  74
                  .64896
                  .63669
                  .62472
                  .61307
                  .60171
                  .59064
                  .57985
                  .56932
                  .55906
                  .54906

                  75
                  .66237
                  .65040
                  .63872
                  .62733
                  .61622
                  .60538
                  .59480
                  .58447
                  .57439
                  .56455

                  76
                  .67581
                  .66416
                  .65279
                  .64168
                  .63083
                  .62023
                  .60988
                  .59977
                  .58989
                  .58023

                  77
                  .68925
                  .67793
                  .66688
                  .65606
                  .64550
                  .63516
                  .62506
                  .61517
                  .60551
                  .59605

                  78
                  .70263
                  .69166
                  .68093
                  .67044
                  .66016
                  .65010
                  .64026
                  .63062
                  .62119
                  .61195

                  79
                  .71585
                  .70525
                  .69486
                  .68468
                  .67471
                  .66495
                  .65538
                  .64600
                  .63681
                  .62780

                  80
                  .72885
                  .71860
                  .70856
                  .69872
                  .68906
                  .67959
                  .67031
                  .66120
                  .65227
                  .64350

                  81
                  .74150
                  .73162
                  .72193
                  .71242
                  .70308
                  .69392
                  .68492
                  .67609
                  .66742
                  .65890

                  82
                  .75376
                  .74425
                  .73490
                  .72572
                  .71671
                  .70785
                  .69915
                  .69059
                  .68219
                  .67393

                  83
                  .76559
                  .75643
                  .74744
                  .73859
                  .72989
                  .72134
                  .71293
                  .70466
                  .69652
                  .68852

                  84
                  .77700
                  .76821
                  .75955
                  .75104
                  .74266
                  .73441
                  .72629
                  .71831
                  .71044
                  .70270

                  85
                  .78805
                  .77961
                  .77130
                  .76311
                  .75505
                  .74711
                  .73929
                  .73158
                  .72399
                  .71652

                  86
                  .79866
                  .79056
                  .78258
                  .77472
                  .76697
                  .75933
                  .75180
                  .74438
                  .73707
                  .72985

                  87
                  .80870
                  .80094
                  .79329
                  .78574
                  .77829
                  .77095
                  .76370
                  .75656
                  .74951
                  .74255

                  88
                  .81825
                  .81081
                  .80348
                  .79623
                  .78908
                  .78202
                  .77506
                  .76818
                  .76139
                  .75469

                  89
                  .82746
                  .82035
                  .81332
                  .80638
                  .79952
                  .79275
                  .78606
                  .77945
                  .77292
                  .76647

                  90
                  .83643
                  .82963
                  .82291
                  .81627
                  .80971
                  .80322
                  .79681
                  .79047
                  .78420
                  .77801

                  91
                  .84503
                  .83854
                  .83212
                  .82578
                  .81950
                  .81330
                  .80716
                  .80109
                  .79509
                  .78915

                  92
                  .85308
                  .84689
                  .84076
                  .83470
                  .82870
                  .82276
                  .81689
                  .81107
                  .80532
                  .79963

                  93
                  .86052
                  .85460
                  .84875
                  .84295
                  .83721
                  .83152
                  .82590
                  .82033
                  .81481
                  .80935

                  94
                  .86729
                  .86163
                  .85602
                  .85046
                  .84496
                  .83951
                  .83412
                  .82877
                  .82348
                  .81823

                  95
                  .87338
                  .86795
                  .86257
                  .85723
                  .85195
                  .84672
                  .84153
                  .83639
                  .83129
                  .82624

                  96
                  .87877
                  .87354
                  .86836
                  .86323
                  .85814
                  .85309
                  .84809
                  .84313
                  .83822
                  .83334

                  97
                  .88365
                  .87861
                  .87362
                  .86867
                  .86375
                  .85888
                  .85405
                  .84926
                  .84450
                  .83979

                  98
                  .88805
                  .88318
                  .87835
                  .87356
                  .86880
                  .86409
                  .85941
                  .85477
                  .85016
                  .84559

                  99
                  .89210
                  .88739
                  .88271
                  .87807
                  .87347
                  .86890
                  .86436
                  .85986
                  .85539
                  .85095

                  100
                  .89588
                  .89131
                  .88678
                  .88227
                  .87780
                  .87337
                  .86896
                  .86459
                  .86024
                  .85593

                  101
                  .89949
                  .89506
                  .89066
                  .88629
                  .88195
                  .87764
                  .87336
                  .86911
                  .86488
                  .86069

                  102
                  .90325
                  .89897
                  .89471
                  .89047
                  .88627
                  .88209
                  .87794
                  .87381
                  .86971
                  .86564

                  103
                  .90724
                  .90311
                  .89900
                  .89491
                  .89085
                  .88681
                  .88279
                  .87880
                  .87484
                  .87089

                  104
                  .91167
                  .90770
                  .90376
                  .89983
                  .89593
                  .89205
                  .88819
                  .88435
                  .88053
                  .87673

                  105
                  .91708
                  .91333
                  .90959
                  .90587
                  .90217
                  .89848
                  .89481
                  .89116
                  .88752
                  .88391

                  106
                  .92470
                  .92126
                  .91782
                  .91440
                  .91100
                  .90760
                  .90422
                  .90085
                  .89749
                  .89414

                  107
                  .93545
                  .93246
                  .92948
                  .92650
                  .92353
                  .92057
                  .91762
                  .91467
                  .91173
                  .90880

                  108
                  .95239
                  .95016
                  .94792
                  .94569
                  .94346
                  .94123
                  .93900
                  .93678
                  .93456
                  .93234

                  109
                  .97900
                  .97800
                  .97700
                  .97600
                  .97500
                  .97400
                  .97300
                  .97200
                  .97100
                  .97000

                Table U(1)—Based on Life Table 80CNSMT Unitrust Single Life Remainder Factors
                [Applicable After April 30, 1989]

                  Age
                  Adjusted payout rate
                  6.2%
                  6.4%
                  6.6%
                  6.8%
                  7.0%
                  7.2%
                  7.4%
                  7.6%
                  7.8%
                  8.0%

                  0
                  .03176
                  .03009
                  .02861
                  .02730
                  .02613
                  .02509
                  .02416
                  .02333
                  .02258
                  .02191

                  1
                  .02110
                  .01936
                  .01781
                  .01644
                  .01522
                  .01413
                  .01316
                  .01229
                  .01150
                  .01080

                  2
                  .02156
                  .01974
                  .01812
                  .01669
                  .01541
                  .01427
                  .01325
                  .01234
                  .01152
                  .01078

                  3
                  .02233
                  .02043
                  .01875
                  .01725
                  .01591
                  .01471
                  .01364
                  .01268
                  .01182
                  .01105

                  4
                  .02330
                  .02132
                  .01956
                  .01800
                  .01660
                  .01535
                  .01422
                  .01322
                  .01231
                  .01149

                  5
                  .02443
                  .02237
                  .02054
                  .01890
                  .01743
                  .01612
                  .01494
                  .01389
                  .01293
                  .01208

                  6
                  .02568
                  .02353
                  .02162
                  .01990
                  .01837
                  .01700
                  .01576
                  .01465
                  .01365
                  .01275

                  7
                  .02704
                  .02480
                  .02280
                  .02102
                  .01941
                  .01798
                  .01668
                  .01552
                  .01446
                  .01351

                  8
                  .02852
                  .02619
                  .02411
                  .02224
                  .02057
                  .01906
                  .01770
                  .01648
                  .01537
                  .01437

                  9
                  .03014
                  .02772
                  .02554
                  .02360
                  .02184
                  .02027
                  .01885
                  .01756
                  .01640
                  .01535

                  10
                  .03190
                  .02938
                  .02711
                  .02508
                  .02325
                  .02160
                  .02012
                  .01877
                  .01755
                  .01645

                  11
                  .03381
                  .03119
                  .02883
                  .02672
                  .02481
                  .02308
                  .02153
                  .02012
                  .01884
                  .01768

                  12
                  .03585
                  .03313
                  .03068
                  .02847
                  .02648
                  .02468
                  .02305
                  .02157
                  .02023
                  .01902

                  13
                  .03798
                  .03515
                  .03260
                  .03030
                  .02822
                  .02635
                  .02464
                  .02310
                  .02170
                  .02042

                  14
                  .04012
                  .03718
                  .03453
                  .03213
                  .02997
                  .02801
                  .02623
                  .02462
                  .02315
                  .02181

                  15
                  .04225
                  .03919
                  .03644
                  .03395
                  .03169
                  .02965
                  .02779
                  .02611
                  .02457
                  .02317

                  16
                  .04436
                  .04120
                  .03833
                  .03574
                  .03339
                  .03126
                  .02932
                  .02756
                  .02595
                  .02449

                  17
                  .04647
                  .04319
                  .04021
                  .03752
                  .03507
                  .03285
                  .03082
                  .02898
                  .02730
                  .02577

                  18
                  .04860
                  .04519
                  .04210
                  .03930
                  .03675
                  .03443
                  .03232
                  .03040
                  .02864
                  .02703

                  19
                  .05079
                  .04725
                  .04404
                  .04113
                  .03847
                  .03606
                  .03386
                  .03185
                  .03001
                  .02833

                  20
                  .05304
                  .04938
                  .04604
                  .04301
                  .04025
                  .03773
                  .03543
                  .03333
                  .03141
                  .02965

                  21
                  .05537
                  .05157
                  .04811
                  .04495
                  .04208
                  .03945
                  .03705
                  .03486
                  .03285
                  .03101

                  22
                  .05779
                  .05385
                  .05025
                  .04698
                  .04398
                  .04125
                  .03874
                  .03645
                  .03435
                  .03242

                  23
                  .06032
                  .05623
                  .05250
                  .04910
                  .04598
                  .04313
                  .04052
                  .03812
                  .03592
                  .03390

                  24
                  .06302
                  .05878
                  .05491
                  .05136
                  .04812
                  .04515
                  .04242
                  .03992
                  .03762
                  .03550

                  25
                  .06589
                  .06150
                  .05748
                  .05380
                  .05042
                  .04733
                  .04448
                  .04187
                  .03946
                  .03725

                  26
                  .06897
                  .06442
                  .06025
                  .05643
                  .05292
                  .04969
                  .04673
                  .04400
                  .04148
                  .03916

                  27
                  .07228
                  .06757
                  .06325
                  .05928
                  .05563
                  .05227
                  .04917
                  .04632
                  .04369
                  .04126

                  28
                  .07582
                  .07094
                  .06646
                  .06234
                  .05854
                  .05504
                  .05182
                  .04884
                  .04609
                  .04355

                  29
                  .07958
                  .07454
                  .06990
                  .06562
                  .06167
                  .05804
                  .05468
                  .05157
                  .04870
                  .04604

                  30
                  .08360
                  .07838
                  .07357
                  .06913
                  .06504
                  .06125
                  .05775
                  .05452
                  .05152
                  .04874

                  31
                  .08788
                  .08249
                  .07751
                  .07291
                  .06866
                  .06472
                  .06108
                  .05771
                  .05457
                  .05167

                  32
                  .09242
                  .08685
                  .08170
                  .07694
                  .07252
                  .06844
                  .06465
                  .06113
                  .05786
                  .05483

                  33
                  .09724
                  .09149
                  .08617
                  .08124
                  .07666
                  .07242
                  .06848
                  .06482
                  .06141
                  .05824

                  34
                  .10234
                  .09641
                  .09091
                  .08581
                  .08107
                  .07667
                  .07257
                  .06876
                  .06521
                  .06191

                  35
                  .10773
                  .10161
                  .09594
                  .09066
                  .08575
                  .08119
                  .07694
                  .07298
                  .06928
                  .06583

                  36
                  .11338
                  .10708
                  .10122
                  .09577
                  .09070
                  .08597
                  .08156
                  .07744
                  .07360
                  .07001

                  37
                  .11932
                  .11283
                  .10680
                  .10117
                  .09592
                  .09102
                  .08645
                  .08217
                  .07818
                  .07444

                  38
                  .12554
                  .11887
                  .11265
                  .10685
                  .10142
                  .09636
                  .09162
                  .08719
                  .08304
                  .07915

                  39
                  .13206
                  .12521
                  .11880
                  .11282
                  .10722
                  .10198
                  .09708
                  .09249
                  .08818
                  .08414

                  40
                  .13888
                  .13184
                  .12526
                  .11909
                  .11332
                  .10791
                  .10284
                  .09808
                  .09361
                  .08942

                  41
                  .14601
                  .13878
                  .13201
                  .12567
                  .11972
                  .11414
                  .10890
                  .10398
                  .09935
                  .09499

                  42
                  .15342
                  .14601
                  .13906
                  .13254
                  .12641
                  .12066
                  .11525
                  .11016
                  .10537
                  .10086

                  43
                  .16112
                  .15353
                  .14640
                  .13970
                  .13340
                  .12747
                  .12189
                  .11663
                  .11168
                  .10701

                  44
                  .16913
                  .16136
                  .15406
                  .14718
                  .14070
                  .13460
                  .12885
                  .12342
                  .11830
                  .11347

                  45
                  .17745
                  .16951
                  .16202
                  .15497
                  .14832
                  .14204
                  .13612
                  .13053
                  .12525
                  .12025

                  46
                  .18608
                  .17796
                  .17030
                  .16308
                  .15625
                  .14981
                  .14372
                  .13796
                  .13251
                  .12735

                  47
                  .19501
                  .18673
                  .17890
                  .17150
                  .16451
                  .15790
                  .15164
                  .14571
                  .14010
                  .13478

                  48
                  .20425
                  .19579
                  .18780
                  .18024
                  .17308
                  .16630
                  .15987
                  .15378
                  .14800
                  .14252

                  49
                  .21375
                  .20514
                  .19698
                  .18926
                  .18193
                  .17499
                  .16840
                  .16214
                  .15620
                  .15056

                  50
                  .22352
                  .21476
                  .20644
                  .19856
                  .19107
                  .18396
                  .17721
                  .17080
                  .16470
                  .15890

                  51
                  .23358
                  .22467
                  .21620
                  .20816
                  .20051
                  .19325
                  .18634
                  .17976
                  .17350
                  .16755

                  52
                  .24396
                  .23490
                  .22628
                  .21809
                  .21030
                  .20288
                  .19581
                  .18908
                  .18267
                  .17655

                  53
                  .25465
                  .24545
                  .23670
                  .22836
                  .22042
                  .21285
                  .20563
                  .19875
                  .19218
                  .18592

                  54
                  .26563
                  .25631
                  .24742
                  .23895
                  .23086
                  .22315
                  .21579
                  .20876
                  .20204
                  .19562

                  55
                  .27692
                  .26747
                  .25846
                  .24986
                  .24164
                  .23379
                  .22628
                  .21911
                  .21225
                  .20568

                  56
                  .28850
                  .27895
                  .26982
                  .26109
                  .25275
                  .24476
                  .23712
                  .22981
                  .22281
                  .21611

                  57
                  .30041
                  .29076
                  .28152
                  .27267
                  .26421
                  .25610
                  .24833
                  .24089
                  .23376
                  .22691

                  58
                  .31263
                  .30288
                  .29355
                  .28460
                  .27602
                  .26780
                  .25991
                  .25234
                  .24508
                  .23811

                  59
                  .32515
                  .31532
                  .30590
                  .29685
                  .28817
                  .27984
                  .27184
                  .26416
                  .25677
                  .24968

                  60
                  .33793
                  .32803
                  .31853
                  .30940
                  .30062
                  .29219
                  .28409
                  .27630
                  .26880
                  .26159

                  61
                  .35093
                  .34098
                  .33141
                  .32220
                  .31335
                  .30483
                  .29663
                  .28873
                  .28113
                  .27381

                  62
                  .36414
                  .35414
                  .34451
                  .33524
                  .32631
                  .31771
                  .30942
                  .30144
                  .29374
                  .28631

                  63
                  .37754
                  .36750
                  .35783
                  .34850
                  .33951
                  .33084
                  .32247
                  .31440
                  .30661
                  .29910

                  64
                  .39115
                  .38108
                  .37137
                  .36200
                  .35296
                  .34422
                  .33579
                  .32765
                  .31978
                  .31217

                  65
                  .40500
                  .39493
                  .38519
                  .37579
                  .36670
                  .35792
                  .34943
                  .34122
                  .33328
                  .32560

                  66
                  .41914
                  .40906
                  .39932
                  .38990
                  .38079
                  .37197
                  .36343
                  .35517
                  .34717
                  .33943

                  67
                  .43355
                  .42350
                  .41376
                  .40434
                  .39521
                  .38636
                  .37780
                  .36950
                  .36145
                  .35365

                  68
                  .44824
                  .43822
                  .42851
                  .41909
                  .40996
                  .40111
                  .39252
                  .38419
                  .37611
                  .36827

                  69
                  .46313
                  .45316
                  .44348
                  .43409
                  .42498
                  .41613
                  .40754
                  .39919
                  .39109
                  .38322

                  70
                  .47818
                  .46827
                  .45864
                  .44929
                  .44020
                  .43137
                  .42279
                  .41445
                  .40634
                  .39845

                  71
                  .49331
                  .48348
                  .47391
                  .46461
                  .45557
                  .44677
                  .43821
                  .42988
                  .42177
                  .41388

                  72
                  .50853
                  .49879
                  .48930
                  .48007
                  .47108
                  .46233
                  .45380
                  .44550
                  .43741
                  .42952

                  73
                  .52384
                  .51421
                  .50482
                  .49566
                  .48674
                  .47805
                  .46957
                  .46130
                  .45324
                  .44538

                  74
                  .53930
                  .52979
                  .52050
                  .51145
                  .50261
                  .49399
                  .48557
                  .47736
                  .46934
                  .46152

                  75
                  .55495
                  .54557
                  .53641
                  .52747
                  .51873
                  .51020
                  .50187
                  .49372
                  .48577
                  .47799

                  76
                  .57079
                  .56157
                  .55256
                  .54374
                  .53513
                  .52670
                  .51847
                  .51041
                  .50253
                  .49483

                  77
                  .58680
                  .57775
                  .56890
                  .56024
                  .55176
                  .54346
                  .53534
                  .52739
                  .51960
                  .51198

                  78
                  .60291
                  .59405
                  .58537
                  .57687
                  .56855
                  .56040
                  .55241
                  .54458
                  .53691
                  .52940

                  79
                  .61898
                  .61032
                  .60184
                  .59353
                  .58537
                  .57738
                  .56954
                  .56185
                  .55431
                  .54691

                  80
                  .63491
                  .62647
                  .61819
                  .61007
                  .60210
                  .59428
                  .58660
                  .57907
                  .57167
                  .56441

                  81
                  .65054
                  .64234
                  .63427
                  .62636
                  .61858
                  .61094
                  .60344
                  .59606
                  .58882
                  .58170

                  82
                  .66582
                  .65784
                  .65000
                  .64229
                  .63472
                  .62727
                  .61994
                  .61274
                  .60566
                  .59870

                  83
                  .68065
                  .67291
                  .66530
                  .65781
                  .65044
                  .64319
                  .63605
                  .62903
                  .62212
                  .61532

                  84
                  .69508
                  .68758
                  .68020
                  .67293
                  .66577
                  .65872
                  .65178
                  .64495
                  .63821
                  .63158

                  85
                  .70915
                  .70190
                  .69475
                  .68770
                  .68076
                  .67392
                  .66718
                  .66054
                  .65399
                  .64754

                  86
                  .72274
                  .71573
                  .70882
                  .70200
                  .69528
                  .68865
                  .68212
                  .67567
                  .66931
                  .66304

                  87
                  .73569
                  .72892
                  .72224
                  .71565
                  .70915
                  .70273
                  .69639
                  .69014
                  .68397
                  .67788

                  88
                  .74807
                  .74154
                  .73509
                  .72872
                  .72243
                  .71622
                  .71009
                  .70403
                  .69805
                  .69214

                  89
                  .76010
                  .75381
                  .74759
                  .74144
                  .73537
                  .72937
                  .72344
                  .71758
                  .71179
                  .70607

                  90
                  .77189
                  .76584
                  .75985
                  .75394
                  .74809
                  .74230
                  .73659
                  .73093
                  .72534
                  .71981

                  91
                  .78327
                  .77746
                  .77171
                  .76603
                  .76040
                  .75484
                  .74933
                  .74388
                  .73850
                  .73316

                  92
                  .79399
                  .78841
                  .78289
                  .77743
                  .77202
                  .76667
                  .76137
                  .75613
                  .75093
                  .74579

                  93
                  .80394
                  .79858
                  .79328
                  .78803
                  .78283
                  .77768
                  .77258
                  .76753
                  .76252
                  .75757

                  94
                  .81303
                  .80788
                  .80278
                  .79773
                  .79272
                  .78776
                  .78284
                  .77797
                  .77315
                  .76837

                  95
                  .82124
                  .81628
                  .81136
                  .80649
                  .80166
                  .79687
                  .79213
                  .78742
                  .78276
                  .77814

                  96
                  .82851
                  .82372
                  .81897
                  .81426
                  .80959
                  .80496
                  .80036
                  .79581
                  .79129
                  .78682

                  97
                  .83512
                  .83048
                  .82588
                  .82132
                  .81679
                  .81230
                  .80785
                  .80343
                  .79905
                  .79471

                  98
                  .84106
                  .83656
                  .83210
                  .82767
                  .82328
                  .81892
                  .81459
                  .81030
                  .80604
                  .80181

                  99
                  .84655
                  .84218
                  .83785
                  .83354
                  .82927
                  .82503
                  .82082
                  .81664
                  .81249
                  .80837

                  100
                  .85165
                  .84740
                  .84318
                  .83899
                  .83483
                  .83070
                  .82660
                  .82252
                  .81848
                  .81446

                  101
                  .85652
                  .85238
                  .84827
                  .84419
                  .84013
                  .83611
                  .83210
                  .82813
                  .82418
                  .82026

                  102
                  .86159
                  .85757
                  .85358
                  .84960
                  .84566
                  .84174
                  .83784
                  .83397
                  .83012
                  .82630

                  103
                  .86697
                  .86307
                  .85920
                  .85535
                  .85152
                  .84771
                  .84392
                  .84016
                  .83642
                  .83270

                  104
                  .87295
                  .86919
                  .86544
                  .86172
                  .85802
                  .85434
                  .85068
                  .84704
                  .84341
                  .83981

                  105
                  .88030
                  .87672
                  .87315
                  .86959
                  .86605
                  .86253
                  .85903
                  .85554
                  .85207
                  .84861

                  106
                  .89081
                  .88749
                  .88418
                  .88088
                  .87760
                  .87433
                  .87106
                  .86782
                  .86458
                  .86135

                  107
                  .90588
                  .90296
                  .90005
                  .89715
                  .89425
                  .89137
                  .88849
                  .88561
                  .88275
                  .87989

                  108
                  .93013
                  .92791
                  .92570
                  .92350
                  .92129
                  .91909
                  .91689
                  .91469
                  .91250
                  .91031

                  109
                  .96900
                  .96800
                  .96700
                  .96600
                  .96500
                  .96400
                  .96300
                  .96200
                  .96100
                  .96000

                Table U(1)—Based on Life Table 80CNSMT Unitrust Single Life Remainder Factors
                [Applicable after APRIL 30, 1989]

                  Age
                  Adjusted payout rate
                  8.2%
                  8.4%
                  8.6%
                  8.8%
                  9.0%
                  9.2%
                  9.4%
                  9.6%
                  9.8%
                  10.0%

                  0
                  .02130
                  .02075
                  .02025
                  .01980
                  .01939
                  .01901
                  .01867
                  .01835
                  .01806
                  .01779

                  1
                  .01017
                  .00960
                  .00908
                  .00861
                  .00819
                  .00780
                  .00745
                  .00712
                  .00683
                  .00655

                  2
                  .01011
                  .00951
                  .00897
                  .00848
                  .00803
                  .00762
                  .00725
                  .00690
                  .00659
                  .00630

                  3
                  .01035
                  .00971
                  .00914
                  .00862
                  .00815
                  .00771
                  .00732
                  .00696
                  .00663
                  .00632

                  4
                  .01076
                  .01009
                  .00948
                  .00894
                  .00843
                  .00798
                  .00756
                  .00718
                  .00683
                  .00650

                  5
                  .01130
                  .01059
                  .00996
                  .00938
                  .00885
                  .00836
                  .00792
                  .00752
                  .00714
                  .00680

                  6
                  .01193
                  .01119
                  .01051
                  .00990
                  .00934
                  .00883
                  .00836
                  .00793
                  .00754
                  .00717

                  7
                  .01265
                  .01187
                  .01116
                  .01051
                  .00992
                  .00938
                  .00888
                  .00842
                  .00800
                  .00762

                  8
                  .01347
                  .01264
                  .01189
                  .01121
                  .01058
                  .01001
                  .00948
                  .00900
                  .00856
                  .00815

                  9
                  .01440
                  .01353
                  .01274
                  .01201
                  .01135
                  .01075
                  .01019
                  .00968
                  .00921
                  .00877

                  10
                  .01544
                  .01453
                  .01369
                  .01293
                  .01223
                  .01159
                  .01101
                  .01046
                  .00997
                  .00950

                  11
                  .01662
                  .01566
                  .01478
                  .01398
                  .01324
                  .01257
                  .01195
                  .01137
                  .01085
                  .01036

                  12
                  .01791
                  .01690
                  .01597
                  .01513
                  .01435
                  .01364
                  .01298
                  .01238
                  .01182
                  .01131

                  13
                  .01926
                  .01820
                  .01722
                  .01634
                  .01552
                  .01477
                  .01408
                  .01344
                  .01285
                  .01231

                  14
                  .02059
                  .01948
                  .01846
                  .01752
                  .01667
                  .01588
                  .01515
                  .01448
                  .01386
                  .01328

                  15
                  .02189
                  .02072
                  .01965
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