26 USC 7520 – Valuation tables
(a) General rule
For purposes of this title, the value of any annuity, any interest for life or a term of years, or any remainder or reversionary interest shall be determined—
(1) under tables prescribed by the Secretary, and
(2) by using an interest rate (rounded to the nearest 2/10ths of 1 percent) equal to 120 percent of the Federal midterm rate in effect under section 1274(d)(1) for the month in which the valuation date falls.
If an income, estate, or gift tax charitable contribution is allowable for any part of the property transferred, the taxpayer may elect to use such Federal midterm rate for either of the 2 months preceding the month in which the valuation date falls for purposes of paragraph (2). In the case of transfers of more than 1 interest in the same property with respect to which the taxpayer may use the same rate under paragraph (2), the taxpayer shall use the same rate with respect to each such interest.
(b) Section not to apply for certain purposes
Terms Used In 26 USC 7520
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- Secretary: means the Secretary of the Treasury or his delegate. See 26 USC 7701
- taxpayer: means any person subject to any internal revenue tax. See 26 USC 7701
This section shall not apply for purposes of part I of subchapter D of chapter 1 or any other provision specified in regulations.
(c) Tables
(1) In general
The tables prescribed by the Secretary for purposes of subsection (a) shall contain valuation factors for a series of interest rate categories.
(2) Revision for recent mortality charges
The Secretary shall revise the initial tables prescribed for purposes of subsection (a) to take into account the most recent mortality experience available as of the time of such revision. Such tables shall be revised not less frequently than once each 10 years to take into account the most recent mortality experience available as of the time of the revision.
(d) Valuation date
For purposes of this section, the term “valuation date” means the date as of which the valuation is made.
(e) Tables to include formulas
For purposes of this section, the term “tables” includes formulas.