Planned Giving Insights and Information

IRS Announces New Mortality Table for Computing Planned Gift Deductions

On May 5, the IRS finally published proposed regulations that update the mortality assumptions used to compute the value of annuity interests, unitrust interests, income interests, and life estates. The updated mortality table, 2010CM, is based on data from the 2010 U.S. Census. The current mortality table, 2000CM, is based on data from the 2000 U.S. Census. It has been 13 years since 2000CM went into effect, despite a Section 7520 requirement that the mortality table for valuing annuity interests, etc. be updated no less than every ten years. Update: On June 1, 2023, the IRS made public final regulations governing the use of 2000CM and 2010CM. The finalized rules are discussed here.

What's the Impact of Rising Discount Rates on Charitable Deductions?

In May, the IRS discount rate (also known as the AFR, or Applicable Federal Rate) made its largest monthly increase since June 2004, rising from 2.2% to 3.0%. Your donors might be viewing this increase with dismay, as it makes new debt more expensive, from credit cards to home mortgages. But there is a reason to celebrate this increase, as it also increases the charitable deduction for the most popular life income gifts: charitable gift annuities and charitable remainder trusts.

What’s the Real Value of Planned Gifts in Your Organization’s Mission?

What is the real value of a planned gift in accomplishing the mission of your organization? With inflation at near record levels, donors wonder if their contribution will provide as much charitable good as they expect, and organizations wonder about the return on their investment in planned giving. Calculating the real value of a charitable contribution might seem straightforward. There ought to be a single accurate value for any given charitable contribution. After all, in math class you got full credit only for the right answer, and logic tells us that two contradictory propositions cannot both be true. However, in charitable gift planning there can be at least three different values for a single contribution, each one accurate for its intended purpose.

The IRS Says You Didn’t File Your PIF or CRT Form 5227…But You Did!

We are getting accustomed to waiting longer for things these days: Waiting for baggage to come at the airport. Waiting for food to be delivered. Waiting for any device that uses a microchip. Many of the delays are due to staffing shortages. The IRS is no different. If you have received a paper notification that you didn’t file your 2020 PIF or CRT Form 5227, you are not alone. That’s because the IRS automated notice system is working just fine. However, due to staffing shortages, the IRS is delayed in opening these and other hard copy returns. So while the automatic notice machine churns on, the real live humans are still sitting and opening envelopes trying to catch up.