California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15552 - Limited Estates, Future Estates, Contingent Estates, Annuities (Other than Annuity Contracts)-in General

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The value of a future, contingent or limited estate, income
					 or interest in property is generally the present value or worth of such estate,
					 income or interest at the date of the gift. In this connection, the Gift Tax
					 Law specifically provides that such present value or worth is to be determined
					 in accordance with the standards of mortality and values set forth in the
					 United States Life Tables: 1959-1961, published by the United States Department
					 of Health, Education and Welfare, Public Health Service, and the rate of
					 interest used in computing the present value of the estate, income or interest
					 is 6 percent per annum compounded annually. In determining the present value or
					 worth as of the date of the gift of a future, contingent, or limited estate,
					 income or interest, other than an annuity in a fixed amount, the yearly income,
					 or the annual value of the use or income, of the estate, income or interest, is
					 considered equivalent to 6 percent of the appraised value of the property upon
					 which the estate, income or interest is based.
A single life annuity table at 6 percent showing the
					 present value or worth of an annuity, a life estate and a remainder interest of
					 $1 due at the end of each year during the life of a male person of a specified
					 age and of $1 due at the death of a male person of a specified age,
					 respectively, is set forth in Section
					 15552.8
					 as Table A(1). Table A(2) shows the present value or worth at 6 percent of an
					 annuity, life estate and a remainder interest of $1 due at the end of each year
					 during the life of a female person of a specified age and the present value or
					 worth of $1 due at the death of a female person of a specified age,
					 respectively. The present value or worth at 6 percent of an annuity for a term
					 certain, an income interest for a term certain, and a remainder interest
					 postponed for a term certain is set forth in Section
					 15552.8 as Table B.
In the case of a gift of the character above set forth made
					 on or after November 10, 1969, but prior to January 1, 1975, the present value
					 or worth thereof is to be determined by the United States Life Tables and
					 Actuarial Tables 1939-1941, Table 38, published by the Bureau of the Census of
					 the United States Department of Commerce, and the rate of interest used in
					 computing the present value of the estate, income or interest is 3 ½
					 percent per annum compounded annually. In such a case the yearly income or
					 annual value of the use or income of an estate or interest is 3 ½
					 percent of the appraised value of the property upon which the estate or
					 interest is based.
A single life annuity table at 3 ½ percent showing
					 the present value or worth of an annuity, a life estate and a remainder
					 interest of $1 due at the end of each year during the life of a person of a
					 specified age and of $1 due at the death of a person of a specified age,
					 respectively, is set forth in Section
					 15552.9 as Table C. The present
					 value or worth at 3 ½ percent of an annuity for a term certain, and
					 income interest for a term certain, and a remainder interest postponed for a
					 term certain is set forth in Section
					 15552.9 as Table D.
In the case of a gift of the character above set forth made
					 on or after July 1, 1945, but prior to November 10, 1969, the present value or
					 worth thereof is to be determined by the Actuaries Combined Experience Tables
					 of Mortality, save that the rate of interest used shall be 4 percent per annum;
					 and, the yearly income or annual value of the use or income of an estate or
					 interest is 4 percent of the appraised value of the property upon which the
					 estate or interest is based.
In a case of a gift of the character above set forth made
					 prior to July 1, 1945, the value thereof is to be determined by the Actuaries
					 Combined Experience Tables of Mortality, save that the rate of interest used
					 shall be 5 percent per annum; and, the yearly income or annual value of the use
					 or income of an estate or interest is 5 percent of the appraised value of the
					 property upon which the estate or interest is based.
It is assumed in the illustrative computations which follow
					 that the gift was made on or after January 1, 1975, and the 6 percent tables
					 are therefore used.
CAUTION
: Tables A(1), A(2) and B, contained in
					 Section 15552.8 are to be used to value
					 interest in property for gifts made on or after January 1, 1975. Tables C and D
					 contained in Section
					 15552.9 are to be used to value
					 interest in property for gifts made on or after November 10, 1969, but prior to
					 January 1, 1975. Care should be taken to refer to the correct table in each
					 case.
NOTE: Reference: Section
					 15552, Revenue and Taxation
					 Code