1.170A-12T—Valuation of a remainder interest in real property for contributions made after July 31, 1969 (temporary).
(b)
(2) Computation of depreciation factor.
If the valuation of the remainder interest in depreciable property is dependent upon the continuation of one life, a special factor must be used. The factor determined under this paragraph (b)(2) is carried to the fifth decimal place. The special factor is to be computed on the basis of the interest rate and life contingencies prescribed in § 20.2031-7T (or for periods before May 1, 2009, § 20.2031-7A) and on the assumption that the property depreciates on a straight-line basis over its estimated useful life. For transfers for which the valuation date is on or after May 1, 2009, special factors for determining the present value of a remainder interest following one life and an example describing the computation are contained in Internal Revenue Service Publication 1459, “Actuarial Valuations Version 3C” (2009). This publication will be available beginning May 1, 2009, at no charge, electronically via the IRS Internet site at http://www.irs.gov. For transfers for which the valuation date is after April 30, 1999, and before May 1, 2009, special factors for determining the present value of a remainder interest following one life and an example describing the computation are contained in Internal Revenue Service Publication 1459, “Actuarial Values, Book Gimel,” (7-99). For transfers for which the valuation date is after April 30, 1989, and before May 1, 1999, special factors for determining the present value of a remainder interest following one life and an example describing the computation are contained in Internal Revenue Service Publication 1459, “Actuarial Values, Gamma Volume,” (8-89). These publications are no longer available for purchase from the Superintendent of Documents, United States Government Printing Office. However, they may be obtained by requesting a copy from: CC:PA:LPD:PR (IRS Publication 1459), Room 5205, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. See, however, § 1.7520-3(b) (relating to exceptions to the use of prescribed tables under certain circumstances). Otherwise, in the case of the valuation of a remainder interest following one life, the special factor may be obtained through use of the following formula:
Where:
n = the estimated number of years of useful life,
i = the applicable interest rate under section 7520 of the Internal Revenue Code,
v = 1 divided by the sum of 1 plus the applicable interest rate under section 7520 of the Internal Revenue Code,
x = the age of the life tenant, and
lx = number of persons living at age x as set forth in Table 2000CM of § 20.2031-7T (or, for periods before May 1, 2009, the tables set forth under § 20.2031-7A).
Code of Federal Regulations
Code of Federal Regulations
148
(f) Effective/applicability date.
Paragraphs (b)(2) and (b)(3) apply to all contributions made on or after May 1, 2009.