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CHARITABLE REMAINDER TRUSTSEXAMPLE 12.23A, an individual aged 65, makes a contribution of $100,000 to a CRAT. The gift is made inNovember 2004 (in that month, the Treasury Department’s interest rate a was 4.2 percent). Theannuity amount, paid annually and at the end of each year, is $5,000. The income interest is forA’s life. The annuity factor is 11.3067. The present value of the annuity interest is $56,533.50.The value of the remainder interest (and thus the resulting charitable contribution deduction) is$43,466.50. A’s charitable deduction as a percentage of the amount transferred is 43.46 percent. baSee § 12.5(d), note 367, and Appendix J.bThe illustration in Example 12.23 was provided by The Children’s Mercy Hospitals and Clinics, Kansas City,Missouri.Other tables are used to compute the value of a remainder interest in thecase of an annuity amount determined on the basis of multiple lives. 420EXAMPLE 12.24B, an individual aged 70, and C, an individual aged 68, make a contribution of $100,000 to aCRAT. The gift is made in November 2004. The annuity amount, paid annually and at the end ofeach year, is $5,000. The income interest is for the joint lives of B and C, then to the survivor. Thetwo-life annuity factor is 12.5724. The present value of the annuity interest is $62,862. The valueof the remainder interest (and thus the resulting charitable contribution deduction) is $37,138. B’sand C’s charitable deduction as a percentage of the amount transferred is 37.14 percent.EXAMPLE 12.25D, an individual, makes a contribution of $100,000 to a CRAT. The gift is made in November2004. The annuity amount, paid annually and at the end of each year, is $6,000. The incomeinterest is for a 20-year term. The annuity factor is 13.2848. The present value of the annuityinterest is $79,708.80. The value of the remainder interest (and thus the resulting charitablecontribution deduction) is $20,291.20. D’s charitable deduction as a percentage of the amounttransferred is 20.29 percent. aaThe illustrations in Examples 12.24 and 12.25 were provided by the Children’s Mercy Hospitals and Clinics,Kansas City, Missouri.(b) Charitable Remainder UnitrustsThe fair market value of a remainder interest in a CRUT is its present value. 421 Thisis the case for purposes of the charitable contribution deduction. 422 The rules as todetermining the valuation date are the same as those for CRATs. 423This present value is computed on the basis of life contingencies determinedas to each life (if any) involved, the appropriate monthly interestrate, 424 and the assumption that the unitrust amount is distributed in accordancewith the payout sequence described in the governing instrument of the420 See § 11.2.421 Reg. §§ 1.170A-6(b)(2); 20.2031-7(a), (d)(2)(i), (e)(1).422 Reg. § 1.664-4(a), (d), (e).423 See § 12.11(a), text accompanied by notes 413–415.424 That is, the IRC § 7520 rate. See Chapter 11. 474