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.

Beware Dramatic Increases in Estimated Gift Annuity Liabilities

[NOTE: The following is based on a true story.] Some of the numbers just didn’t make sense. It was that most wonderful time of the year for a non-profit organization – the closing of the June 30 fiscal year! Almost like Christmas in July, everyone was busy reviewing tally sheets and running various reports in an effort to provide comprehensive information about the gifts received over the previous 12 months. With outright gifts, of course, the process was fairly straightforward – whatever was received, for the most part, was counted with a few exceptions. With life income gifts, however, the process was a little more complicated, since the organization needs to report the total funding amount, the estimated liability, and the estimate of the charitable remainder.

Demystifying Mortality Tables Used in Gift Planning

Annuity 2000. 2012 IAR. 1983 Basic. 2000CM. Perhaps you are familiar with one or more of these terms. They are the names of mortality tables that are important to planned giving calculations of one kind or another. With so many different mortality tables in play, it’s no wonder that gift planners get confused about which table is used for what purpose and why . . . to the extent that they think about them at all. To help dispel the confusion, I briefly describe below what a mortality table is and the specific use and characteristics of the four mortality tables that gift planners need to be most aware of.