CFR > Title 26 - Internal Revenue > CHAPTER I—INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY > SUBCHAPTER A—INCOME TAX (Parts 1–19) > PART 1—INCOME TAXES > 1.642(c)-6A—Valuation of charitable remainder interests for which the valuation date is before May 1, 2009.

1.642(c)-6A—Valuation of charitable remainder interests for which the valuation date is before May 1, 2009.

(a) Valuation of charitable remainder interests for which the valuation date is before January 1, 1952. There was no provision for the qualification of pooled income funds under section 642 until 1969. See § 20.2031-7A(a) of this chapter (Estate Tax Regulations) for the determination of the present value of a charitable remainder interest created before January 1, 1952.
(b) Valuation of charitable remainder interests for which the valuation date is after December 31, 1951, and before January 1, 1971. No charitable deduction is allowable for a transfer to a pooled income fund for which the valuation date is after the effective dates of the Tax Reform Act of 1969 unless the pooled income fund meets the requirements of section 642(c)(5). See § 20.2031-7A(b) of this chapter (Estate Tax Regulations) for the determination of the present value of a charitable remainder interest for which the valuation date is after December 31, 1951, and before January 1, 1971.
(c) Present value of remainder interest in the case of transfers to pooled income funds for which the valuation date is after December 31, 1970, and before December 1, 1983. For the determination of the present value of a remainder interest in property transferred to a pooled income fund for which the valuation date is after December 31, 1970, and before December 1, 1983, see § 20.2031-7A(c) of this chapter (Estate Tax Regulations) and former § 1.642(c)-6(e) (as contained in the 26 CFR part 1 edition revised as of April 1, 1994).
(d) Present value of remainder interest dependent on the termination of one life in the case of transfers to pooled income funds made after November 30, 1983, for which the valuation date is before May 1, 1989— (1) In general. For transfers to pooled income funds made after November 30, 1983, for which the valuation date is before May 1, 1989, the present value of the remainder interest at the time of the transfer of property to the fund is determined by computing the present value (at the time of the transfer) of the life income interest in the transferred property (as determined under paragraph (d)(2) of this section) and subtracting that value from the fair market value of the transferred property on the valuation date. The present value of a remainder interest that is dependent on the termination of the life of one individual is computed by use of Table G in paragraph (d)(4) of this section. For purposes of the computation under this section, the age of an individual is to be taken as the age of the individual at the individual's nearest birthday.
(2) Present value of life income interest. The present value of the life income interest in property transferred to a pooled income fund shall be computed on the basis of:
(i) Life contingencies determined from the values of lx that are set forth in Table LN of § 20.2031-7A(d)(6) of this chapter (Estate Tax Regulations); and
(ii) Discount at a rate of interest, compounded annually, equal to the highest yearly rate of return of the pooled income fund for the 3 taxable years immediately preceding its taxable year in which the transfer of property to the fund is made. For purposes of this paragraph (d)(2), the yearly rate of return of a pooled income fund is determined as provided in § 1.642(c)-6(c) unless the highest yearly rate of return is deemed to be 9 percent. For purposes of this paragraph (d)(2), the first taxable year of a pooled income fund is considered a taxable year even though the taxable year consists of less than 12 months. However, appropriate adjustments must be made to annualize the rate of return earned by the fund for that period. Where it appears from the facts and circumstances that the highest yearly rate of return for the 3 taxable years immediately preceding the taxable year in which the transfer of property is made has been purposely manipulated to be substantially less than the rate of return that would otherwise be reasonably anticipated with the purpose of obtaining an excessive charitable deduction, that rate of return may not be used. In that case, the highest yearly rate of return of the fund is determined by treating the fund as a pooled income fund that has been in existence for less than 3 preceding taxable years. If a pooled income fund has been in existence less than 3 taxable years immediately preceding the taxable year in which the transfer of property to the fund is made, the highest yearly rate of return is deemed to be 9 percent.
(3) Computation of value of remainder interest. The factor which is used in determining the present value of the remainder interest is the factor under the appropriate yearly rate of return in column (2) of Table G opposite the number in column (1) which corresponds to the age of the individual upon whose life the value of the remainder interest is based. If the yearly rate of return is a percentage which is between yearly rates of return for which factors are provided in Table G, a linear interpolation must be made. The present value of the remainder interest is determined by multiplying, by the factor determined under this paragraph (d)(3), the fair market value on the appropriate valuation date. If the yearly rate of return is below 2.2 percent or above 14 percent, see § 1.642(c)-6(b). This paragraph (d)(3) may be illustrated by the following example:

Code of Federal Regulations

Example. A, who will be 50 years old on April 15, 1985, transfers $100,000 to a pooled income fund on January 1, 1985, and retains a life income interest in such property. The highest yearly rate of return earned by the fund for its 3 preceding taxable years is 9.9 percent. In Table G the figure in column (2) opposite 50 years under 9.8 percent is .15653 and under 10 percent is .15257. The present value of the remainder interest is $15,455, computed as follows:
Factor at 9.8 percent for person aged 50 .15653
Factor at 10 percent for person aged 50 .15257
Difference .00396
Interpolation adjustment:
[Please see PDF for Formula: EC14NO91.133 ]
Factor at 9.8 percent for person aged 50 0.15653
Less:
Interpolation adjustment .00198
Interpolated factor .15455
Present value of remainder interest ($100,000×.15455 $15,455
(4) Actuarial tables. The following tables shall be used in the application of the provisions of this section.
Table G
Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
(1) Age (2) Yearly rate of return
2.2% 2.4% 2.6% 2.8% 3.0%
0 .23930 .21334 .19077 .17113 .15401
1 .22891 .20224 .17903 .15880 .14114
2 .23297 .20610 .18265 .16218 .14429
3 .23744 .21035 .18669 .16600 .14787
4 .24212 .21485 .19098 .17006 .15171
5 .24701 .21955 .19547 .17434 .15577
6 .25207 .22442 .20015 .17880 .16001
7 .25726 .22944 .20497 .18342 .16441
8 .26259 .23461 .20995 .18820 .16898
9 .26809 .23995 .21511 .19315 .17373
10 .27373 .24544 .22043 .19828 .17865
11 .27953 .25110 .22592 .20358 .18375
12 .28546 .25690 .23156 .20904 .18902
13 .29149 .26280 .23731 .21462 .19440
14 .29757 .26877 .24312 .22026 .19986
15 .30368 .27476 .24896 .22593 .20535
16 .30978 .28075 .25481 .23161 .21085
17 .31589 .28676 .26068 .23732 .21637
18 .32204 .29280 .26659 .24306 .22193
19 .32825 .29892 .27257 .24889 .22759
20 .33457 .30514 .27867 .25484 .23336
21 .34099 .31148 .28489 .26092 .23927
22 .34751 .31794 .29124 .26712 .24532
23 .35416 .32452 .29773 .27348 .25152
24 .36096 .33127 .30439 .28002 .25791
25 .36793 .33821 .31124 .28676 .26452
26 .37509 .34535 .31832 .29374 .27136
27 .38244 .35269 .32560 .30093 .27844
28 .38998 .36023 .33311 .30836 .28577
29 .39767 .36795 .34080 .31599 .29330
30 .40553 .37584 .34868 .32382 .30104
31 .41352 .38388 .35672 .33182 .30897
32 .42165 .39208 .36494 .34001 .31710
33 .42993 .40044 .37333 .34839 .32543
34 .43834 .40894 .38188 .35694 .33395
35 .44689 .41760 .39060 .36567 .34266
36 .45556 .42640 .39947 .37458 .35156
37 .46435 .43534 .40850 .38365 .36063
38 .47325 .44440 .41767 .39288 .36987
39 .48226 .45358 .42696 .40225 .37927
40 .49136 .46288 .43640 .41177 .38884
41 .50056 .47228 .44596 .42143 .39856
42 .50988 .48182 .45566 .43125 .40846
43 .51927 .49145 .46547 .44120 .41850
44 .52874 .50118 .47540 .45128 .42869
45 .53828 .51099 .48543 .46146 .43899
46 .54788 .52088 .49554 .47176 .44943
47 .55754 .53083 .50574 .48216 .45998
48 .56726 .54087 .51604 .49267 .47065
49 .57703 .55097 .52642 .50327 .48144
50 .58685 .56114 .53688 .51398 .49234
51 .59670 .57136 .54740 .52476 .50333
52 .60658 .58161 .55798 .53560 .51441
53 .61647 .59189 .56859 .54651 .52556
54 .62635 .60217 .57923 .55744 .53675
55 .63622 .61246 .58987 .56840 .54798
56 .64606 .62273 .60052 .57937 .55923
57 .65589 .63299 .61117 .59037 .57052
58 .66569 .64324 .62181 .60136 .58183
59 .67546 .65347 .63246 .61237 .59316
60 .68521 .66368 .64309 .62338 .60450
61 .69492 .67388 .65372 .63440 .61587
62 .70461 .68406 .66434 .64542 .62726
63 .71425 .69420 .67494 .65643 .63865
64 .72384 .70430 .68550 .66742 .65002
65 .73336 .71434 .69602 .67837 .66137
66 .74281 .72431 .70647 .68926 .67267
67 .75216 .73419 .71684 .70009 .68391
68 .76143 .74399 .72714 .71085 .69509
69 .77060 .75370 .73735 .72153 .70622
70 .77969 .76334 .74750 .73215 .71728
71 .78870 .77290 .75758 .74272 .72830
72 .79764 .78240 .76760 .75323 .73928
73 .80646 .79178 .77751 .76364 .75016
74 .81511 .80099 .78725 .77387 .76086
75 .82353 .80995 .79674 .78386 .77132
76 .83169 .81866 .80596 .79357 .78149
77 .83960 .82710 .81491 .80301 .79139
78 .84727 .83530 .82360 .81218 .80101
79 .85473 .84328 .83207 .82112 .81041
80 .86201 .85106 .84034 .82986 .81960
81 .86905 .85861 .84837 .83835 .82853
82 .87585 .86589 .85612 .84655 .83717
83 .88239 .87291 .86360 .85447 .84552
84 .88873 .87971 .87085 .86216 .85362
85 .89487 .88630 .87789 .86963 .86150
86 .90070 .89258 .88459 .87674 .86901
87 .90609 .89838 .89079 .88332 .87597
88 .91106 .90372 .89650 .88939 .88239
89 .91570 .90872 .90184 .89507 .88839
90 .92014 .91350 .90696 .90051 .89416
91 .92435 .91804 .91182 .90569 .89964
92 .92822 .92222 .91630 .91045 .90469
93 .93170 .92597 .92032 .91474 .90923
94 .93477 .92929 .92387 .91853 .91325
95 .93743 .93216 .92695 .92181 .91673
96 .93967 .93458 .92955 .92458 .91966
97 .94167 .93674 .93186 .92704 .92228
98 .94342 .93863 .93389 .92921 .92457
99 94508 94041 .93580 .93124 .92673
100 .94672 .94218 .93770 .93326 .92887
101 .94819 .94377 .93940 .93508 .93080
102 .94979 .94550 .94125 .93704 .93288
103 .95180 .94766 .94357 .93952 .93550
104 .95377 .94979 .94585 .94194 .93806
105 .95663 .95288 .94916 .94547 .94181
106 .96101 .95762 .95425 .95091 .94760
107 .96688 .96398 .96110 .95824 .95539
108 .97569 .97354 .97141 .96928 .96717
109 .98924 .98828 .98733 .98638 .98544
Table G




Table G—Single Life, Unisex—Table Showing the Present Worth of the Remainder Interest in Property Transferred to a Pooled Income Fund Having the Yearly Rate of Return Shown—Applicable for Transfers After November 30, 1983, and Before May 1, 1989
(1) Age (2) Yearly rate of return
3.2% 3.4% 3.6% 3.8% 4.0%
0 .13908 .12603 .11461 .10461 .09583
1 .12570 .11220 .10036 .08998 .08086
2 .12862 .11489 .10284 .09225 .08293
3 .13198 .11802 .10576 .09496 .08544
4 .13559 .12141 .10893 .09793 .08821
5 .13943 .12503 .11234 .10112 .09121
6 .14345 .12884 .11593 .10451 .09439
7 .14763 .13280 .11968 .10805 .09773
8 .15198 .13694 .12360 .11176 .10125
9 .15652 .14126 .12771 .11567 .10495
Code of Federal Regulations 83
10 .16123 .14576 .13200 .11975 .10883
11 .16613 .15045 .13648 .12402 .11290
12 .17119 .15531 .14113 .12847 .11715
13 .17638 .16029 .14591 .13304 .12152
14 .18164 .16535 .15076 .13769 .12597
15 .18693 .17044 .15565 .14238 .13045
16 .19224 .17554 .16055 .14707 .13494
17 .19756 .18066 .16547 .15178 .13945
18 .20294 .18584 .17044 .15655 .14401
19 .20840 .19110 .17550 .16140 .14866
20 .21399 .19650 .18069 .16639 .15344
21 .21972 .20203 .18602 .17152 .15836
22 .22559 .20771 .19151 .17680 .16344
23 .23162 .21356 .19716 .18225 .16869
24 .23784 .21960 .20301 .18791 .17414
25 .24429 .22588 .20910 .19380 .17984
26 .25098 .23240 .21545 .19996 .18581
27 .25792 .23918 .22206 .20639 .19205
28 .26512 .24623 .22894 .21310 .19858
29 .27253 .25350 .23605 .22004 .20534
30 .28016 .26100 .24341 .22724 .21236
31 .28799 .26871 .25097 .23464 .21961
32 .29603 .27664 .25877 .24230 .22710
33 .30428 .28478 .26679 .25018 .23484
34 .31273 .29314 .27504 .25830 .24280
35 .32139 .30172 .28351 .26665 .25102
36 .33024 .31050 .29220 .27523 .25948
37 .33929 .31949 .30111 .28404 .26816
38 .34851 .32867 .31022 .29305 .27707
39 .35791 .33804 .31953 .30228 .28620
40 .36749 .34759 .32904 .31172 .29555
41 .37724 .35733 .33874 .32137 .30512
42 .38717 .36727 .34866 .33124 .31493
43 .39727 .37739 .35877 .34132 .32495
44 .40752 .38768 .36906 .35159 .33518
45 .41791 .39811 .37952 .36204 .34560
46 .42844 .40871 .39014 .37267 .35621
47 .43910 .41944 .40092 .38347 .36701
48 .44990 .43034 .41188 .39446 .37801
49 .46083 .44137 .42299 .40562 .38919
50 .47189 .45256 .43427 .41695 .40056
51 .48306 .46386 .44567 .42844 .41209
52 .49432 .47528 .45721 .44006 .42378
53 .50567 .48679 .46886 .45182 .43562
54 .51708 .49838 .48060 .46367 .44756
55 .52854 .51004 .49242 .47563 .45962
56 .54004 .52175 .50430 .48766 .47177
57 .55159 .53352 .51626 .49978 .48402
58 .56316 .54533 .52827 .51196 .49636
59 .57478 .55719 .54036 .52424 .50879
60 .58643 .56910 .55250