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§ 12.2 CHARITABLE REMAINDER ANNUITY TRUST RULES(a) Payment of Annuity AmountA qualifying CRUT must pay a sum certain, not less often than annually, to aneligible person or persons 60 for each tax year of the appropriate period, 61 all asprovided in the governing instrument of the trust. 62A sum certain is a stated dollar amount, which is the same either as to eachincome beneficiary or as to the total amount payable for each year of the incomepayment period of the trust. The payment requirement is satisfied by, for example,the provision for an amount which is the same every year to A until hisdeath and concurrently an amount which is the same every year to B until herdeath, with the amount to each recipient to terminate at his or her death. Theprovision for an amount to A and B for their joint lives and then to the survivorof them also satisfies this requirement. In the case of a distribution to a charitableorganization at the death of an income interest beneficiary or the expiration of aterm of years, the governing instrument of a CRAT may provide for a reductionof the stated amount payable after the distribution, as long as:• the reduced amount payable is the same either as to each income interestbeneficiary or as to the total amount payable for each year of the balanceof the period, and• the minimum annuity amount requirements 63 are met. 64The stated dollar amount may be expressed as a fraction or a percentage ofthe initial net fair market value of the property irrevocably passing in trust asfinally determined for federal tax purposes. If the stated dollar amount isexpressed in this manner and the market value is incorrectly determined by thefiduciary, this requirement is satisfied if the governing instrument of the trustprovides that, in this event, the trust must pay to the recipient (in the case of anundervaluation) or be repaid by the recipient (in the case of an overvaluation) anamount equal to the difference between the amount that the trust should havepaid the recipient if the correct value had been used and the amount that thetrust actually paid the recipient. The payment or payments must be made withina reasonable period after the final determination of the value. Any payment dueto an income interest beneficiary by reason of an incorrect valuation is consideredto be a payment required to be distributed at the time of the final determinationfor purposes of the year-of-inclusion rules. 6560 See § 12.2(d).61 See § 12.2(f).62 IRC § 664 (d)(1)(A); Reg. § 1.664-2(a)(1)(i). A trust is not deemed to have engaged in an act of self-dealing(IRC § 4941; see Private Foundations ch. 5); to have unrelated debt-financed income (IRC § 514; see § 3.5);to have received an additional contribution (see § 12.2(h)); or to have failed to function exclusively as a charitableremainder trust merely because payment of the annuity amount is made after the close of the tax year,as long as the payment is made within a reasonable time after the close of the tax year. Reg. § 1.664-2(a)(1)(i)(a). There are additional requirements in this regard, which are summarized elsewhere for purposesof emphasis. See § 12.4(g).63 See § 12.2(b).64 Reg. § 1.664-2(a)(1)(ii).65 Reg. § 1.664-2(a)(1)(iii). Those rules are the subject of § 12.5(c), text accompanied by notes 323–325. Rules relatingto the subject of future contributions are the subject of § 12.2(h), text accompanied by note 132. Rules relatingto required adjustments for underpayments or overpayments of these amounts in respect of paymentsmade during a reasonable period of administration are the subject of § 12.1(a), text accompanied by notes 40–44. 417