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CHARITABLE REMAINDER TRUSTSduring the tax year of the trust, as long as the same valuation date or dates andvaluation methods are used each year. If the governing instrument of the trustdoes not specify the valuation date or dates, the trustee must select the date ordates and indicate the selection on the first tax return (Form 1041-B) which thetrust is required to file. The unitrust amount that must be paid each year must bebased on the valuation for that year. 164The governing instrument of the trust must provide that, in the case of a taxyear of the trust that is for a period of less than 12 months, other than the taxyear in which the end of the trust’s income payment period occurs:• the unitrust amount determined under the general rules 165 must be multipliedby a fraction, the numerator of which is the number of days in thetax year of the trust and the denominator of which is 365 (366 if February29 is a day included in the numerator);• the unitrust amount determined under one of the income-only exceptions166 (if applicable) must be similarly allocated; and• if no valuation date occurs before the end of the tax year of the trust, thetrust assets must be valued as of the last day of the tax year of the trust. 167The governing instrument of the trust must provide that, in the case of thetax year in which the end of the trust’s income payment period occurs:• The unitrust amount that must be distributed will be the amount otherwisedetermined under the general unitrust amount rules (if that is the case)prorated for the trust year. That is, the unitrust amount must be multipliedby a fraction, the numerator of which is the number of days in the periodbeginning on the first day of this last tax year and ending on the last day ofthe period and the denominator of which is 365 (366 if February 29 is a dayincluded in the numerator).• The unitrust amount must be the amount otherwise determined underone of income-only exceptions (if applicable).• If no valuation date occurs before the end of the period, the trust assetsshall be valued as of the last day of the period. 168The trust will not qualify as a charitable remainder trust absent a provisionthat states a formula for prorating the specified distribution in the tax year whenthe noncharitable interests terminate. 169A special rule allows termination of payment of the unitrust amount with theregular payment next preceding the termination of the income payment period. 170164 Reg. § 1.664-3(a)(1)(iv).165 See § 12.3(a), text accompanied by notes 142–151.166 See § 12.3(a), text accompanied by notes 152–156.167 Reg. § 1.664-3(a)(1)(v)(a).168 Reg. § 1.664-3(a)(1)(v)(b)(1). The IRS has set forth an acceptable method for determining the net fair marketvalue of the assets of a CRUT from which payments are made to the income beneficiary prior to the annualvaluation date. Rev. Rul. 76-467, 1976-2 C.B. 198.169 Rev. Rul. 79-428, 1979-2 C.B. 253.170 Reg. § 1.664-3(a)(1)(v)(b)(2). This special rule is the subject of § 12.3(f). 432