Forums Support Library CFP – Charitable Financial Planner Optimizing for Shorter or Life


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    • Kathleen Reynolds
      Post count: 428

      Use this button if you want to set up a trust for a Life or Shorter of Life trust. It will find the Percentage Payout that provides the lowest taxable gift ($0 – $1). If you have already drafted a trust, this feature will not be beneficial.

      • If you click Optimize For Taxable Gift of Residual Interest in Trust, the program near-zeros the Taxable Gift Value of Residual Interest in Trust, without regard to Rev. Ruling 77-454.
      • If you click Optimize For Taxable Gift Limited By Rev. Rul. 77-454, the program calculates the highest Rate of Annuity which results in a Rev. Rul. 77-454 Taxable Gift value which does not exceed the Shorter of Term or Life Taxable Gift value. If you selected not to Optimize and instead chose to increase the resulting Rate of Annuity by the smallest amount, you would generally get a calculation result where the Rev. 77-454 Taxable Gift value is slightly higher than the Shorter of Term of Life Taxable Gift. We do not perform a near zero-out calculation for the Rev. Rul. 77-454 Taxable Gift since the result would invariably be a nonsensical 99% Rate of Annuity.

      Note: The second (or bottom) button will produce the result which is most consistent with IRS regulations and rulings.

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