Deferred Charitable Gift Annuity - Two Life

Prepared for: Donor name

A. Input Assumptions
Date of transfer August 10, 2020
Fair market value of property transferred $100,000.00
Nearest age on the date of the gift for Beneficiary 1 is 86
Nearest age on the date of the gift for Beneficiary 2 is 86
Date of first payment December 30, 2015
Annuity starting date (payment period before 1st payment) September 30, 2015
Annual annuity rate for immediate annuity 6%
Payment frequency Quarterly
Prorate first payment or Full first payment? Prorate
Deferred annuity interest adjustment factor 1.0325
Annual annuity rate adjusted for deferral 6.2%
IRC Sec. 7520(a) election to use 7/2020 discount rate of 0.6%
The mortality table is based on the census taken in 2000
B. Present Value of Remainder Interest - Two Life Deferred
    1st
Annuitant
2nd
Annuitant
1. Age nearest to annuity starting date 81 81
2. Age nearest to date of transfer 86 86
3. Value of Dx from IRS Pub. 1457, Table H based on  
  (a) Line 1 age 29378.34 29378.34
  (b) Line 2 age 18600.71 18600.71
4. Line 3(a) divided by Line 3(b) 1.57942 1.57942
5. Value of Lx from IRS mortality table based on    
  (a) Line 1 age 47694 47694
  (b) Line 2 age 31114 31114
6. Line 5(a) divided by Line 5(b) 1.532879 1.532879
7. Unadjusted joint life deferred discount factor (Line 4 above * Line 6 in other column) 2.42106 2.42106
8. Unadjusted value of $1 of single life annuity from Pub. 1457, Table S based on Line 1 age 7.6533 7.6533
9. Adjustment factor based on payment frequency from Pub. 1457, Table K 1.0022 1.0022
10. Adjusted value of $1 of single life annuity (Line 8 * Line 9) 7.6701 7.6701
11. Value of $1 of deferred single life annuity (Line 4 * Line 10) 12.1143 12.1143
12. Factor from Table R(2) (for remainder interest) 0.93718
13. 1.00000 minus Line 12 (factor for life estate) 0.06282
14. Unadjusted value for $1 of joint and survivor annuity (Line 13 divided by AFR = factor for annuity) 10.47
15. Adjusted value of $1 of joint and survivor annuity (Line 9 * Line 14) 10.493
16. Adjusted value of $1 of joint life annuity (Line 10 (1st) + line 10 (2nd) - Line 15) 4.8472
17. Sum of Line 7 for first and second annuitant 4.84212
18. Deferred discount factor (1/2 of Line 17) 2.42106
19. Value of $1 of deferred joint life annuity (Line 16 * Line 18) 11.7354
20. Value of $1 of deferred annuity (Line 11 (1st) + Line 11 (2nd) - Line 19 12.4932
21. Annual annuity rate for immediate annuity 6%
22. Deferred annuity interest adjustment factor 1.0325
23. Deferred annuity rate (Line 21 * Line 22) 6.2%
24. Net fair market value paid for annuity $100,000.00
25. Annuity amount payable on an annual basis $6,200.00
26. Present value of annuity (Line 20 * Line 25) $77,457.84
27. Minimum value of annuity (lesser of Line 24 and Line 26) $77,457.84
28. Present value of remainder interest (Line 24 - Line 27) the Income tax deduction $22,542.16

Depending on the type of asset you contribute, a portion of your payment may be taxable to you as a combination of ordinary income, long-term capital gain, and a tax-free return of principal. This report has been calculated assuming a contribution of cash. Each of your next 9 years payments of $6,200.00 will contain $5,280.47 of tax-free income and $919.53 of ordinary income. All income will be ordinary after 9 years.

My disclaimer.

© Copyright 2019 by Sharpe Group. All Rights Reserved.