IRS Revises Actuarial Tables


The IRS issued final regulations on August 10 relating to the use of actuarial tables for valuing annuities, interests for life or a term of years, or remainder or reversionary interests. The regulations (T.D. 9540) were necessary because Sec. 7520(c)(3) directs the IRS to update the actuarial tables to take into account the most recent mortality data available, no less often than once every 10 years.

The final regulations adopt without substantive change proposed and temporary regulations (T.D. 9448 and REG-107845-08) issued in May 2009 to reflect changes in mortality data based on the 2000 U.S. Census.

Sec. 7520(a) provides that the value of any annuity, any interest for life or a term of years, or any remainder or reversionary interest is determined under tables prescribed by the IRS and by using an interest rate based on the federal midterm rate in effect under Sec. 1274(d)(1) for the month in which the valuation date falls.

Revised tables are contained in a number of regulation sections. They include Table 2000CM, contained in Regs. Sec. 20.2031-7. It is the underlying mortality table used in determining the present value of annuities, life estates, remainders and reversions.

The final regulations are effective and applicable August 10, 2011.

Newsletter Articles

SPONSORED REPORT

CPEOs provide peace of mind around payroll services

The creation of these new IRS-certified service providers for small businesses clarifies some issues around traditional professional employer organizations.

PRACTICE MANAGEMENT

2016 Best Article Award

The winners of The Tax Adviser’s 2016 Best Article Award are Edward Schnee, CPA, Ph.D., and W. Eugene Seago, J.D., Ph.D., for their article, “Taxation of Worthless and Abandoned Partnership Interests.”