Kathleen ReynoldsKeymasterNovember 21, 2022 at 5:31 pmPost count: 428
Enter the appropriate values into the data input fields for this calculation model.
- Transfer Date: Enter 1 to 12 to indicate the month for the transfer date and then enter the day and year of the transfer (dd/mm/yyyy). If you enter a two-digit number such as 90, the program will automatically enter it as 1990. See Transition Period Notes.
- §7520 Rate: The program automatically displays three allowable 120% Midterm Applicable Federal Interest Rates (the current month and two preceding months) and places the rate that is most favorable in this input. You can override the program’s value by entering another rate. In which case, the phrase “Invalid §7520 Rate” appears. In some cases, 30% will appear as a rate. Thirty percent is the default value that appears when there is not a current AFR available for the chosen month. Download or manually update your AFR table. Check our web site at brentmark.com for an updated list of AFR Rates.
- FMV of Property: Enter the initial net fair market value of the property transferred pursuant to the gift annuity agreement.
- Cost Basis: Enter the long-term cost basis of the property on the transfer date. If the value entered is the same as the FMV of the Property, the reports will not include any capital gain treatment.
- Prorate: This data input field is irrelevant for deferred gift annuities. Enter No, if the first payment is not to be prorated when the period between the Transfer Date and the First Payment Date is less than the interval between future payments. In appropriate cases, Yes will result in a proration of the first payment for an immediate annuity when the period is less than the interval between future payments by more than one day.
- Payment Period: Select the payment schedule that should be followed for each year (Annual, Semiannual, Quarterly, and Monthly).
- # of Contributions: Entering a value greater than 1 causes the program to replace the standard report with a Charitable “IRA” report. This report is available only for transfer dates starting May 1, 1989, or later. For calculation purposes, it is assumed that successive contributions equal to the initial one (i.e., the FMV of Property) are also made on the same Transfer Date in following years.
- First Payment Date: Enter the date of the first annuity payment. If you enter zeros or spaces for the date, the program will automatically display the same date that was entered for the Transfer Date data input field.
- Recommended Payout: Answer Yes, and the program will automatically display the American Council on Gift Annuities uniform gift annuity rate (as adjusted by the uniform interest factor for deferred gift annuities) for the Payout data input field. Answer No, if you wish to enter another rate for the Payout data input field. If you live in New York or New Jersey, select Yes: NY/NJ. Click here for more information about how New York and New Jersey rates are different.
- Payout: If the Use Recommended Payout is answered No, enter any value with up to three places after the decimal point.
- Apply 7520 Exhaustion Test? Answer Yes, and the program will calculate the §7520 Exhaustion Test and use the result for the present value of annuity. The program only handles the §7520 Exhaustion Test for immediate gifts.
- Lives: Enter the Enter the number of lives (1 or 2) that will be used to determine the charitable deduction.
- Birth Date(s): Enter the birth date of one of the persons (usually the donor and spouse) whose lives are being used to measure the term of the gift annuity (dd/mm/yyyy). If the annuity is being funded with the donorï¿½s separate property and there are capital gain consequences (Basis is less than the FMV of Property), enter the donorï¿½s birthday first.
- Income Tax the Tax Cut and Jobs Act of 2017 sunsets in 2026. Indicate whether or not you wish to assume that the income tax provisions of that act will sunset.
- Charity Type: Choose 50%, 30%, or 20%. All qualified non-profit organizations will fit within one of these types (IRS Publication 78).
- Capital Gains Rate: Enter the income tax rate that applies to capital gains property.
- Income Tax Inputs
IMPORTANT NOTE: Mortality table 2010CM was included in version 2022.10 of the software. Table 2010CM reflects longer life expectancies than table 2000CM, and will generally result in life interests worth more, while remainder interests worth less. Once finalized, the new 2010CM table will go in effect on the first day of the first month after regulations have been finalized. If you have a prior version of the software, it’s advised to update to the latest version before the transition period ends (see below).
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