Use of Actuarial Tables in Valuing Annuities, Interests for Life or Terms of Years, and Remainder or Reversionary Interests, 21519-21521 [E9-10110]

Agencies

• Internal Revenue Service
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 74, Number 87 (Thursday, May 7, 2009)]
[Proposed Rules]
[Pages 21519-21521]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-10110]



Federal Register / Vol. 74, No. 87 / Thursday, May 7, 2009 / Proposed 
Rules

[[Page 21519]]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1, 20, and 25

[REG-107845-08]
RIN 1545-BH67


Use of Actuarial Tables in Valuing Annuities, Interests for Life 
or Terms of Years, and Remainder or Reversionary Interests

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations.

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SUMMARY: These proposed regulations relate to the use of actuarial 
tables in valuing annuities, interests for life or terms of years, and 
remainder or reversionary interests. These regulations will affect the 
valuation of inter vivos and testamentary transfers of interest 
dependent on one or more measuring lives. These regulations are 
necessary because section 7520(c)(3) directs the Secretary to update 
the actuarial tables to reflect the most recent mortality experience 
available. The text of the temporary regulations in the Rules and 
Regulations section of this issue of the Federal Register also serves 
as the text of these proposed regulations.

DATES: Written and electronic comments and requests for a public 
hearing must be received by August 5, 2009.

ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-107845-08), room 5205, 
Internal Revenue Service, PO Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand-delivered Monday through 
Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-
107845-08), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue, NW., Washington, DC, or sent via the Federal eRulemaking Portal 
at https://www.regulations.gov (REG-107845-08).

FOR FURTHER INFORMATION CONTACT: Mayer R. Samuels, (202) 622-3090; 
concerning submissions of comments, 
Richard.A.Hurst@irscounsel.treas.gov, (202) 622-7180 (not toll-free 
numbers).

SUPPLEMENTARY INFORMATION: 

Background

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register amend Income Tax Regulations (26 CFR part 
1) under sections 642(c)(5) and 664, Estate Tax Regulations (26 CFR 
part 20) under section 2031, and Gift Tax Regulations (26 CFR part 25) 
under section 2512. These regulations revise actuarial tables used for 
the valuation of partial interests in property under section 7520 to 
reflect the mortality experience based on the 2000 United States 
census, the most recent mortality experience available.
    The text of those temporary regulations also serves as the text of 
these proposed regulations. The preamble to the temporary regulations 
explains the temporary regulations.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in EO 12866. Therefore, 
a regulatory assessment is not required. It also has been determined 
that section 553(b) of the Administrative Procedure Act (5 U.S.C. 
chapter 5) does not apply to these regulations, and because these 
regulations do not impose a collection of information requirement on 
small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) 
does not apply. Pursuant to section 7805(f) of the Internal Revenue 
Code this regulation has been submitted to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on its impact 
on small business.

Comments and Requests for a Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written (a signed original and eight 
(8) copies) or electronic comments that are submitted timely to the 
IRS. The IRS and the Treasury Department also request comments on the 
clarity of the proposed rules and how they can be made easier to 
understand. All comments will be available for public inspection and 
copying. A public hearing will be scheduled if requested in writing by 
any person that timely submits written comments. If a public hearing is 
scheduled, notice of the date, time, and place for the public hearing 
will be published in the Federal Register.

Drafting Information

    The principal author of these regulations is Mayer R. Samuels, 
Office of the Associate Chief Counsel (Passthroughs and Special 
Industries), IRS. However, other personnel from the IRS and Treasury 
Department participated in their development.

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 20

    Estate taxes, Reporting and recordkeeping requirements.

26 CFR Part 25

    Gift taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 1 is proposed to be amended as follows:

PART 1--INCOME TAXES

    Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *

    Par. 2. Section 1.170A-12 is amended as follows:
    1. Paragraphs (b)(2) and (b)(3) are revised.
    2. Paragraph (f) is added.
    The revisions and addition read as follows:


Sec.  1.170A-12  Valuation of a remainder interest in real property for 
contributions made after July 31, 1969.

* * * * *
    (b) * * *
    (2) [The text of this proposed paragraph (b)(2) is the same as the 
text of Sec.  1.170A-12T(b)(2) published elsewhere in this issue of the 
Federal Register].
    (3) [The text of this proposed paragraph (b)(3) is the same as the 
text of Sec.  1.170A-12T(b)(3) published elsewhere in this issue of the 
Federal Register].
* * * * *
    (f) [The text of this proposed paragraph (f) is the same as the 
text of Sec.  1.170A-12T(f) published elsewhere in this issue of the 
Federal Register].
* * * * *
    Par. 3. Section 1.642(c)-6 is amended by revising paragraphs (d), 
(e) and (f) to read as follows:


Sec.  1.642(c)-6  Valuation of a remainder interest in property 
transferred to a pooled income fund.

* * * * *
    (d) [The text of this proposed paragraph (d) is the same as the 
text of Sec.  1.642(c)-6T(d) published elsewhere in this issue of the 
Federal Register].
    (e) [The text of this proposed paragraph (e) is the same as the 
text of Sec.  1.642(c)-6T(e) published elsewhere in this issue of the 
Federal Register].
    (f) [The text of this proposed paragraph (f) is the same as the 
text of Sec.  1.642(c)-6T(f) published elsewhere in this issue of the 
Federal Register].
    Par. 4. Section 1.664-4 is amended by revising paragraphs (a)(1), 
(d), (e)(1),

[[Page 21520]]

(e)(2), (e)(5), (e)(7), and (f) to read as follows:


Sec.  1.664-4  Calculation of the fair market value of the remainder 
interest in a charitable remainder unitrust.

    (a) * * *
    (1) [The text of this proposed paragraph (a)(1) is the same as the 
text of Sec.  1.664-4T(a)(1) published elsewhere in this issue of the 
Federal Register].
* * * * *
    (d) [The text of this proposed paragraph (d) is the same as the 
text of Sec.  1.664-4T(d) published elsewhere in this issue of the 
Federal Register].
    (e)(1) [The text of this proposed paragraph (e)(1) is the same as 
the text of Sec.  1.664-4T(e)(1) published elsewhere in this issue of 
the Federal Register].
    (e)(2) [The text of this proposed paragraph (e)(2) is the same as 
the text of Sec.  1.664-4T(e)(2) published elsewhere in this issue of 
the Federal Register].
* * * * *
    (e)(5) [The text of this proposed paragraph (e)(5) is the same as 
the text of Sec.  1.664-4T(e)(5) published elsewhere in this issue of 
the Federal Register].
* * * * *
    (e)(7) [The text of this proposed paragraph (e)(7) is the same as 
the text of Sec.  1.664-4T(e)(7) published elsewhere in this issue of 
the Federal Register].
    (f) [The text of this proposed paragraph (f) is the same as the 
text of Sec.  1.664-4T(f) published elsewhere in this issue of the 
Federal Register].
    Par. 5. Section 1.7520-1 is amended by revising paragraphs (a)(1), 
(a)(2), (b)(2), (c)(1), (c)(2) and (d) to read as follows:


Sec.  1.7520-1  Valuation of annuities, unitrust interest, interests 
for life or terms of years, and remainder or reversionary interests.

    (a)(1) [The text of this proposed paragraph (a)(1) is the same as 
the text of Sec.  1.7520-1T(a)(1) published elsewhere in this issue of 
the Federal Register].
    (2) [The text of this proposed paragraph (a)(2) is the same as the 
text of Sec.  1.7520-1T(a)(2) published elsewhere in this issue of the 
Federal Register].
    (b) * * *
    (2) [The text of this proposed paragraph (b)(2) is the same as the 
text of Sec.  1.7520-1T(b)(2) published elsewhere in this issue of the 
Federal Register].
    (c) * * *
    (1) [The text of this proposed paragraph (c)(1) is the same as the 
text of Sec.  1.7520-1T(c)(1) published elsewhere in this issue of the 
Federal Register].
    (2) [The text of this proposed paragraph (c)(2) is the same as the 
text of Sec.  1.7520-1T(c)(2) published elsewhere in this issue of the 
Federal Register].
    (d) [The text of this proposed paragraph (d) is the same as the 
text of Sec.  1.7520-1T(d) published elsewhere in this issue of the 
Federal Register].

PART 20--ESTATE TAX; ESTATES OF DECEDENTS DYING AFTER AUGUST 16, 
1954

    Par. 6. The authority citation for part 20 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *

    Par. 7. Section 20.2031-7 is amended by revising paragraphs (c), 
(d)(1), (d)(2), (d)(3), (d)(4), (d)(5), (d)(7), and (e) to read as 
follows:


Sec.  20.2031-7  Valuation of annuities, interests for life or term of 
years, and remainder or reversionary interests.

* * * * *
    (c) [The text of this proposed paragraph (c) is the same as the 
text of Sec.  20.2031-7T(c) published elsewhere in this issue of the 
Federal Register].
    (d) [The text of this proposed paragraph (d)(1) through (d)(5) is 
the same as the text of Sec.  20.2031-7T(d)(1) through (d)(5) published 
elsewhere in this issue of the Federal Register].
* * * * *
    (7) [The text of this proposed paragraph (d)(7) is the same as the 
text of Sec.  20.2031-7T(d)(7) published elsewhere in this issue of the 
Federal Register].
    (e) [The text of this proposed paragraph (e) is the same as the 
text of Sec.  20.2031-7T(e) published elsewhere in this issue of the 
Federal Register].
    Par. 8. Section 20.2032-1 is amended by revising paragraphs (f)(1) 
and (h) to read as follows:


Sec.  20.2032-1  Alternate valuation.

* * * * *
    (f) * * *
    (1) [The text of this proposed paragraph (f)(1) is the same as the 
text of Sec.  20.2032-1T(f)(1) published elsewhere in this issue of the 
Federal Register].
* * * * *
    (h) [The text of this proposed paragraph (h) is the same as the 
text of Sec.  20.2032-1T(h) published elsewhere in this issue of the 
Federal Register].
    Par. 9. Section 20.2055-2 is amended by revising paragraphs 
(e)(3)(iii) and (f)(4) to read as follows:


Sec.  20.2055-2  Transfers not exclusively for charitable purposes.

* * * * *
    (e) * * *
    (3) * * *
    (iii) [The text of this proposed paragraph (e)(3)(iii) is the same 
as the text of Sec.  20.2055-2T(e)(3)(iii) published elsewhere in this 
issue of the Federal Register].
* * * * *
    (f) * * *
    (4) [The text of this proposed paragraph (f)(4) is the same as the 
text of Sec.  20.2055-2T(f)(4) published elsewhere in this issue of the 
Federal Register].
    Par. 10. Section 20.2056A-4 is amended by revising paragraph 
(c)(4)(ii)(B) and Example 4 in paragraph (d) to read as follows:


Sec.  20.2056A-4  Procedures for conforming marital trusts and nontrust 
marital transfers to the requirements of a qualified domestic trust.

* * * * *
    (c) * * *
    (4) * * *
    (ii) * * *
    (B) [The text of this proposed paragraph (c)(4)(ii)(B) is the same 
as the text of Sec.  20.2056A-4T(c)(4)(ii)(B) published elsewhere in 
this issue of the Federal Register].
* * * * *
    (d) * * *
    Example 4. [The text of this proposed paragraph (d), Example 4 is 
the same as the text of Example 4 in Sec.  20.2056A-4T(d) published 
elsewhere in this issue of the Federal Register].
    Par. 11. Section 20.7520-1 is amended by revising paragraphs 
(a)(1), (a)(2), (b)(2), (c)(1), (c)(2) and (d) to read as follows:


Sec.  20.7520-1  Valuation of annuities, unitrust interests, interests 
for life or term of years, and remainder or reversionary interests.

    (a) * * * (1) [The text of this proposed paragraph (a)(1) is the 
same as the text of Sec.  20.7520-1T(a)(1) published elsewhere in this 
issue of the Federal Register].
    (2) [The text of this proposed paragraph (a)(2) is the same as the 
text of Sec.  20.7520-1T(a)(2) published elsewhere in this issue of the 
Federal Register].
    (3) * * *
    (b) * * *
    (2) [The text of this proposed paragraph (b)(2) is the same as the 
text of Sec.  20.7520-1T(b)(2) published elsewhere in this issue of the 
Federal Register].
    (c) * * *
    (1) [The text of this proposed paragraph (c)(1) is the same as the 
text of Sec.  20.7520-1T(c)(1) published elsewhere in this issue of the 
Federal Register].

[[Page 21521]]

    (2) [The text of this proposed paragraph (c)(2) is the same as the 
text of Sec.  20.7520-1T(c)(2) published elsewhere in this issue of the 
Federal Register].
    (d) [The text of this proposed paragraph (d) is the same as the 
text of Sec.  20.7520-1T(d) published elsewhere in this issue of the 
Federal Register].

PART 25--GIFT TAX; GIFTS MADE AFTER DECEMBER 31, 1954

    Par. 12. The authority citation for part 25 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *

    Par. 13. Section 25.2512-5 is amended by revising paragraphs (c), 
(d) and (e) to read as follows:


Sec.  25.2512-5  Valuation of annuities, unitrust interest, interests 
for life or term of years, and remainder or reversionary interests.

* * * * *
    (c) [The text of this proposed paragraph (c) is the same as the 
text of Sec.  25.2512-5T(c) published elsewhere in this issue of the 
Federal Register].
    (d) [The text of this proposed paragraph (d) is the same as the 
text of Sec.  25.2512-5T(d) published elsewhere in this issue of the 
Federal Register].
    (e) [The text of this proposed paragraph (e) is the same as the 
text of Sec.  25.2512-5T(e) published elsewhere in this issue of the 
Federal Register].
    Par. 14. Section 25.2522(c)-3 is amended by revising paragraph (e) 
to read as follows:


Sec.  25.2522(c)-3  Transfers not exclusively for charitable, etc., 
purposes in the case of gifts made after July 31, 1969.

* * * * *
    (e) [The text of this proposed paragraph (e) is the same as the 
text of Sec.  25.2522(c)-3T(e) published elsewhere in this issue of the 
Federal Register].
    Par. 15. Section 25.7520-1 is amended by revising paragraphs 
(a)(1), (a)(2), (b)(2), (c)(1), (c)(2) and (d) to read as follows:


Sec.  25.7520-1  Valuation of annuities, unitrust interests, interests 
for life or term of years, and remainder or reversionary interests.

    (a) * * * (1) [The text of this proposed paragraph (a)(1) is the 
same as the text of Sec.  25.7520-1T(a)(1) published elsewhere in this 
issue of the Federal Register].
    (2) [The text of this proposed paragraph (a)(2) is the same as the 
text of Sec.  25.7520-1T(a)(2) published elsewhere in this issue of the 
Federal Register].
    (3) * * *
    (b) * * *
    (2) [The text of this proposed paragraph (b)(2) is the same as the 
text of Sec.  25.7520-1T(b)(2) published elsewhere in this issue of the 
Federal Register].
    (c) * * *
    (1) [The text of this proposed paragraph (c)(1) is the same as the 
text of Sec.  25.7520-1T(c)(1) published elsewhere in this issue of the 
Federal Register].
    (2) [The text of this proposed paragraph (c)(2) is the same as the 
text of Sec.  25.7520-1T(c)(2) published elsewhere in this issue of the 
Federal Register].
    (d) [The text of this proposed paragraph (d) is the same as the 
text of Sec.  25.7520-1T(d) published elsewhere in this issue of the 
Federal Register].
    Par. 16. Section 25.7520-3 is amended as follows:
    1. In paragraph (b)(2)(v), Example 5 is revised.
    2. Paragraph (b)(4) is revised.
    3. Paragraph (c) is revised.
    The revised text reads as follows:


Sec.  25.7520-3  Limitation on the application of section 7520.

* * * * *
    (b) * * *
    (2) * * *
    (v) * * *

    Example 5.  [The text of this proposed paragraph (b)(2)(v), 
Example 5 is the same as the text of Sec.  25.7520-3T(b)(2)(v), 
Example 5, published elsewhere in this issue of the Federal 
Register].
* * * * *
    (b)(4) [The text of this proposed paragraph (b)(4) is the same as 
the text of Sec.  25.7520-3T(b)(4) published elsewhere in this issue of 
the Federal Register].
* * * * *
    (c) [The text of this proposed paragraph (c) is the same as the 
text of Sec.  25.7520-3T(c) published elsewhere in this issue of the 
Federal Register].

Linda E. Stiff,
Deputy Commissioner for Services and Enforcement.
[FR Doc. E9-10110 Filed 5-1-09; 4:15 pm]
BILLING CODE 4830-01-P