26 U.S.C. § 7520 — Valuation tables
submitted 38 years ago by Pub. L. 100-647 to r/title-26-INTERNAL-REVENUE-CODE · 326 words · no verdicts yet
The IRS uses official tables to value annuities, life interests, terms of years, and remainders. These tables use an interest rate based on federal midterm rates, updated monthly. The IRS must update the tables' mortality data at least once every 10 years.
(a) General rule
When this title needs the value of an annuity, an interest for life or for a term of years, or a remainder or reversionary interest, that value is determined two ways at once: using tables the Secretary* prescribes, and using an interest rate equal to 120% of the federal midterm rate (from section 1274(d)(1)) for the month the valuation date falls in, rounded to the nearest 0.2%.
If an income, estate, or gift tax charitable deduction is allowed for part of the transferred property, the taxpayer* can instead choose the federal midterm rate from either of the two months right before the valuation month.
If a taxpayer transfers more than one interest in the same property, and the same rate could be used for each interest under this rule, the taxpayer must use that same rate for every one of those interests.
(b) Section not to apply for certain purposes
This valuation method does not apply for purposes of part I of subchapter D of chapter 1, or for any other purpose regulations say it doesn't apply to.
(c) Tables
The Secretary's tables must contain valuation numbers for a range of different interest rate categories.
The Secretary must revise the tables to account for the most recent mortality experience available at the time of the revision, and must do this revision at least once every 10 years.
(d) Valuation date
"Valuation date" means the date as of which the valuation is made.
(e) Tables to include formulas
Wherever this section refers to "tables," that includes formulas — the Secretary may use a formula instead of, or along with, a table.
For purposes of this title, the value of any annuity, any interest for life or a term of years, or any remainder or reversionary interest shall be determined—
under tables prescribed by the Secretary*, and
by using an interest rate (rounded to the nearest 2/10ths of 1 percent) equal to 120 percent of the Federal midterm rate in effect under section 1274(d)(1) for the month in which the valuation date falls.
If an income, estate, or gift tax charitable contribution is allowable for any part of the property transferred, the taxpayer* may elect to use such Federal midterm rate for either of the 2 months preceding the month in which the valuation date falls for purposes of paragraph (2). In the case of transfers of more than 1 interest in the same property with respect to which the taxpayer may use the same rate under paragraph (2), the taxpayer shall use the same rate with respect to each such interest.
This section shall not apply for purposes of part I of subchapter D of chapter 1 or any other provision specified in regulations.
The tables prescribed by the Secretary for purposes of subsection (a) shall contain valuation factors for a series of interest rate categories.
The Secretary shall revise the initial tables prescribed for purposes of subsection (a) to take into account the most recent mortality experience available as of the time of such revision. Such tables shall be revised not less frequently than once each 10 years to take into account the most recent mortality experience available as of the time of the revision.
For purposes of this section, the term “valuation date” means the date as of which the valuation is made.
For purposes of this section, the term “tables” includes formulas.
Source credit: (Added Pub. L. 100–647, title V, § 5031(a), Nov. 10, 1988, 102 Stat. 3668; amended Pub. L. 113–295, div. A, title II, § 221(a)(118), Dec. 19, 2014, 128 Stat. 4054.)
- 1988Enacted · Pub. L. 100-647 · 102 Stat. 3668
- 2014Amended · Pub. L. 113-295 · 128 Stat. 4054
A history note hasn’t been published yet. The record shows enactment by Pub. L. 100-647 on 1988-11-10.
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