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§ 16.11 VALUING CHARITABLE DEDUCTION§ 16.10 COMPARISON WITH CHARITABLEREMAINDER TRUSTSAn annuity interest or a unitrust interest in property may be created by means ofa charitable remainder trust. These interests are subject to minimum amounts thatmust be payable to the income beneficiaries. 57 An income interest created by acharitable lead trust, however, is not governed by any minimum or maximumpayout requirement. 58Also, an income interest in property created by means of a charitable remaindertrust may be measured by a term of years. The income interest term establishedby a charitable remainder trust cannot be longer than 20 years. 59 By contrast, federallaw contains no restriction on the length of the term during which the incomeinterest is payable to a charitable organization out of a charitable lead trust. 60§ 16.11 VALUING CHARITABLE DEDUCTIONThe value of any interest for life, or any remainder interest, is determined by usingan interest rate (rounded to the nearest two-tenths of 1 percent) equal to 120 percentof the federal midterm rate, used to determine the issue price (value) of certaindebt instruments, 61 in effect for the month in which the valuation date falls. 62This valuation is made using tables prepared by the IRS 63 charting the mostrecent mortality experience available. 64 These tables are revised at least once every10 years to take into account the most recent mortality experience available as ofthe time of the revision. 65If an income, estate, or gift tax charitable contribution deduction is allowablefor any part of the property transferred, the individual involved may elect to usethe federal midterm rate for either of the two months preceding the month inwhich the valuation date falls in determining the value. 66 Otherwise, the rate usedis the rate in effect in the month of the gift. In the case of transfers of more thanone interest in the same property, the person must use the same rate with respectto each interest. 67As directed, the IRS has published valuation tables. These tables reflect theuse of interest rates ranging from 2.2 percent to 26 percent. The tables used fordetermining the value of charitable lead annuity trust income interests are inActuarial Values: Alpha Volume, 68 and those for charitable lead unitrust incomeinterests are in Actuarial Values: Beta Volume. 6957 See §§ 12.2 (b), 12.3 (b).58 IRC § 170(f)(2)(B).59 See §§ 12.2(f), 12.3(f).60 IRC § 170(f)(2)(B). See, e.g., § 16.4, text accompanied by note 19.61 IRC § 1274(d)(1). In general, see Chapter 11.62 IRC § 7520(a)(2). A chart of these rates appears as Appendix J.63 IRC § 7520(a)(1).64 IRC § 7520(c)(3).65 Id.66 IRC § 7520(a).67 Id.68 IRS Publication 1457.69 IRS Publication 1458. For further reading about charitable lead trusts, see Appendix L. 525