Prepared for: Donor name
| A. Input Assumptions | |
|---|---|
| Date of Transfer | April 27, 2021 |
| Nearest age on the date of the gift for Life Tenant 1 is | 83 |
| Fair market value of property transferred | $400,000.00 |
| Current value of depreciable property (improvements) | $360,000.00 |
| Estimated useful life of depreciable property in years | 40 years |
| Expected salvage value of depreciable property (improvements) | $100,000.00 |
| IRC Sec. 7520(a) election to use 2/2021 discount rate of | 0.6% |
| The mortality table is based on the census taken in | 2000 |
| B. Calculation of Income Tax Deduction | |||
|---|---|---|---|
| 1. | Current fair market value of life estate property | $400,000.00 | |
| 2. | Current value of depreciable portion of life estate property | $360,000.00 | |
| 3. | Salvage value of depreciable life estate property | $100,000.00 | |
| 4. | Portion of property considered to be depreciable (Line 2 minus Line 3) | $260,000.00 | |
| 5. | Net value of property not subject to depreciation (Line 1 minus Line 4) | $140,000.00 | |
| 6. | Remainder interest factor based on tenant ages | 0.95917 | |
| 7. | Remainder interest factor for real property which depreciates | 0.7937 | |
| 8. | Value of remainder interest in real property | ||
| (a) | Value not subject to depreciation (Line 5 * Line 6) | $134,283.80 | |
| (b) | Value subject to depreciation (Line 4 * Line 7) | $206,362.00 | |
| (c) | Total value of remainder interest (Line 8(a) + Line 8(b)) (the tax deduction) | $340,645.80 | |
NOTE: This calculation is provided for educational purposes only. The type of assets transferred, the actual date of the gift, and other factors may have a material effect on the amount or use of your deduction. You are advised to seek the advice of your tax advisors before implementing a gift of this type.
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