Charitable Remainder in Res./Farm: Data Input Fields

[Kathleen Reynolds]

#4677

Enter the appropriate values into the data input fields for this calculation model.

• Calculation Type: Select Life or Term.
• Transfer Date: Enter 1 to 12 to indicate the month for the transfer date and then enter the year of the transfer (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 https://www.brentmark.com for an updated list of AFR Rates.
• Land Value: Enter the appropriate value of the land as of the date of the gift. If the valuation is for estate or gift tax purposes and you take the position that depreciation is considered only for income tax purposes, you would enter the total value of the property transferred here and enter zero for the following two depreciable property value inputs.
• Estimated Useful Life in Years: Enter the estimated year span (beginning with the date of the contribution) over which the depreciable property is going to be used.
• Payment Years: Enter the duration of the trust, for a period not in excess of 20 years. Valid entries are 1-20. This data input field will only be available when Term is chosen as the Calculation Type.
• Lives: Enter the number of lives (up to five) that will be used to determine the distribution. The Pooled Income Fund handles Life scenarios only.
• Ages: This data input field is only available when Life is chosen as the Calculation Type. Use a value from 0 to 109 to indicate the age of the person whose life is being used to measure the term of the trust. Enter the age of this person(s) using the birth date which is nearest to the transfer date.
• Depreciable Property Value on Date of Gift: Enter the value of the depreciable part of the property as it is on the date of the gift. The sum of the Land Value and the Depreciable Property Value on Date of Gift should equal the fair market value of the property.
• Depreciable Property Value at End of Useful Life: Enter the value that is expected at the end of the estimated useful life. The program will not accept the entry of a value higher than the Depreciable Property Value on Date of Gift.
• 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.
• Cost Basis: Enter the amount of basis for the asset being placed in the trust.
• 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

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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 is advised to update to the latest version before the transition period ends (see below).

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