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11C H A P T E R E L E V E NValuation of Partial Interests§ 11.1 Overview of StatutoryLaw 395§ 11.2 Standard ActuarialFactors 396§ 11.3 General ActuarialValuations 397§ 11.4 Nonstandard ActuarialFactors 400Critical to the various forms of planned giving are the charitable contributiondeductions, for purposes of the federal income, estate, and gift taxes. Thesedeductions, in turn, depend in whole or large part on the valuation of the interestin the contributed property that has passed to or is destined for charitablepurposes.The federal tax law contains methods for valuing various partial interests inproperty, including remainder interests in charitable remainder trusts andpooled income funds, for charitable giving purposes. This valuation is done aspart of the process of calculating the present value of an interest, used to determinethe amount of the charitable contribution deduction involved. 1§ 11.1 OVERVIEW OF STATUTORY LAWThe valuation of partial interests in property is the subject of legislation, whichcreated a mechanism for determining a rate of return. 2 This legislation addressesthe method for valuing an annuity, any interest for life or a term of years, or anyremainder or reversionary interests—for income, estate, and gift tax purposes.Under this approach, the value of these interests is determined by using (1) afloating interest rate (rounded to the nearest two-tenths of a percent) equal to120 percent of the applicable federal midterm rate (used to determine the issueprice (value) of certain debt instruments 3 ) in effect for the month in which thevaluation date falls 4 ; and (2) life contingencies in mortality tables 5 prescribed by1 See, e.g., § 12.11, text accompanied by notes 405, 407; and § 13.11, text accompanied by notes 113–117.2 IRC § 7520.3 IRC § 1274(d)(1).4 The term valuation date means the date as of which the valuation is made. IRC § 7520(d). Generally, it is thedate on which the transaction takes place. Reg. § 1.7520-1(b)(1)(ii). See §§ 12.10, 13.11.5 The term tables includes formulas. IRC § 7520(e). 395