The §7520 Treasury Regulations Exhaustion Test calculates a limit in the valuation of annuities created a Charitable Lead Annuity Trust. The Charitable Financial Planner shows the steps used to calculate the value of the exhausted annuity by splitting the annuity into two parts:
An annuity that lasts up to but does not include the period when the original annuity exhausts.
A single payment equal to the final partial payment of the original annuity.
The two parts are then added together. The total is the Value for the §7520 Treasury Regulations Exhaustion Test report.
See the Section 25.7520-3(b)(2)(v) ruling for more information on the exhaustion test.