U.S. Code » Title 26 » Subtitle Subtitle F— Procedure and Administration › Chapter CHAPTER 77— MISCELLANEOUS PROVISIONS

26 U.S.C. § 7520

Valuation tables

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(a) General ruleFor purposes of this title, the value of any annuity, any interest for life or a term of years, or any remainder or reversionary interest shall be determined—(1) under tables prescribed by the Secretary, and(2) by using an interest rate (rounded to the nearest 2/10ths of 1 percent) equal to 120 percent of the Federal midterm rate in effect under section 1274(d)(1) for the month in which the valuation date falls.If an income, estate, or gift tax charitable contribution is allowable for any part of the property transferred, the taxpayer may elect to use such Federal midterm rate for either of the 2 months preceding the month in which the valuation date falls for purposes of paragraph (2). In the case of transfers of more than 1 interest in the same property with respect to which the taxpayer may use the same rate under paragraph (2), the taxpayer shall use the same rate with respect to each such interest.(b) Section not to apply for certain purposes

This section shall not apply for purposes of part I of subchapter D of chapter 1 or any other provision specified in regulations.

(c) Tables(1) In general

The tables prescribed by the Secretary for purposes of subsection (a) shall contain valuation factors for a series of interest rate categories.

(2) Revision for recent mortality charges

The Secretary shall revise the initial tables prescribed for purposes of subsection (a) to take into account the most recent mortality experience available as of the time of such revision. Such tables shall be revised not less frequently than once each 10 years to take into account the most recent mortality experience available as of the time of the revision.

(d) Valuation date

For purposes of this section, the term “valuation date” means the date as of which the valuation is made.

(e) Tables to include formulas

For purposes of this section, the term “tables” includes formulas.

(Added Pub. L. 100–647, title V, § 5031(a), Nov. 10, 1988, 102 Stat. 3668; amended Pub. L. 113–295, div. A, title II, § 221(a)(118), Dec. 19, 2014, 128 Stat. 4054.)Editorial NotesCodification

Another section 7520 was renumbered section 7521 of this title.

Amendments

2014—Subsec. (c)(2), (3). Pub. L. 113–295 redesignated par. (3) as (2), substituted “The Secretary” for “Not later than December 31, 1989, the Secretary” and struck out “thereafter” after “once each 10 years”, and struck out former par. (2). Prior to amendment, text of par. (2) read as follows: “Not later than the day 3 months after the date of the enactment of this section, the Secretary shall prescribe initial tables for purposes of subsection (a). Such tables may be based on the same mortality experience as used for purposes of section 2031 on the date of the enactment of this section.”

Statutory Notes and Related SubsidiariesEffective Date of 2014 Amendment

Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title.

Effective Date

Pub. L. 100–647, title V, § 5031(c), Nov. 10, 1988, 102 Stat. 3669, provided that: “The amendments made by this section [enacting this section] shall apply in cases where the date as of which the valuation is to be made occurs on or after the 1st day of the 6th calendar month beginning after the date of the enactment of this Act [Nov. 10, 1988].”

Notes of Decisions
Cited in 17 cases, 1992–2020 · leading case: Cook v. Comm'r of the Internal Revenue Serv., 349 F.3d 850 (5th Cir. 2003).
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Cook v. Comm'r of the Internal Revenue Serv., 349 F.3d 850 (5th Cir. 2003). · cites it 7× “DUHÉ, Circuit Judge: Appellants ask this Court to reverse the Tax Court’s conclusion that a non-transfer-rable lottery prize payable in seventeen annual installments is a private annuity that must be valued, for estate tax purposes, in accordance with 26 U.S.C. § 7520 . Because…”
In Re Est. of Hjersted, 175 P.3d 810 (Kan. 2008). · cites it 2× “See 26 U.S.C. § 7520 (2000) (standardized valuation tables).”
Anthony v. United States, 520 F.3d 374 (5th Cir. 2008). · cites it 2× “Bankston’s estate (“the Estate”) initially estimated the present value of Bankston’s right to the guaranteed payments to be $2,371,409, using the tables prescribed by 26 U.S.C. § 7520 and the accompanying regulations (the “annuity tables” or “Section 7520 tables”).”
Judith Badgley v. United States, 957 F.3d 969 (9th Cir. 2020). “At the time of transfer into a GRAT, property is subject to a gift tax on the present value of the GRAT’s remainder interest, valued according to the methodology in 26 U.S.C. § 7520 . Id. A reduction in the transferred property’s gift value for tax purposes is permitted if the…”
Comm'r v. Est. of Hubert, 520 U.S. 93 (1997). · cites it 2× “Ante, at 101-102 (referring to 26 U. S. C. § 7520 ; 26 CFR § 20.2031-7 (1996)).”
Rosa Shackleford, Pers. Rep. of the Est. of Thomas J. Shackleford, Deceased v. United States, 262 F.3d 1028 (9th Cir. 2001). “Non-commercial annuities, such as the lottery payments at issue, are valued pursuant to tables promulgated by the Secretary of the Treasury, except when another regulatory provision applies.”
Est. of Paul C. Gribauskas, Deceased, Roy L. Gribauskas, Co-Ex'r, Carol Beauparlant, Co-Ex'r v. Comm'r of Internal Revenue, 342 F.3d 85 (2d Cir. 2003). “All relevant facts and elements of value as of the applicable valuation date shall be considered in every case.” 26 C.F.R. § 20.2031-1 (b). Generally, the value of an annuity, or of any interest for a term of years, is derived from application of standardized valuation tables.”
Est. of Cyril I. Magnin, Deceased Donald Isaac Magnin v. Comm'r of Internal Revenue, 184 F.3d 1074 (9th Cir. 1999). “On average, persons engaging in these transactions will have a life expectancy comparable to the standard mortality tables, which Congress has mandated be used to value remainder interests and life estates, see 26 U.S.C. § 7520 (a)(1); see also 26 C.F.”
In Re Est. of Ricci, 2003 ME 84 (Me. 2003). “See 26 U.S.C.A. § 7520 (2002); 26 C.F.R. § 20.”
United States v. Blakeman ex rel. Est. of Blakeman, 997 F.2d 1084 (5th Cir. 1992). · cites it 6× “In the alternative, Mrs. Blakeman argues that, if her homestead interest is to be valued as of the foreclosure date, it should be valued under the tables promulgated pursuant to 26 U.”
Antonucci v. Antonucci, 138 A.3d 297 (Conn. App. Ct. 2016). · cites it 2× “Pursuant to the Internal Revenue Code, 26 U.S.C. § 7520 (2012), the interest rate used to make this value calculation for a particular month is the rate that is 120 percent of the applicable federal midterm rate (compounded annually) for the month in which the valuation date…”
Rebecca K. Crown Income Charitable Fund, Arie S. Crown v. Comm'r of Internal Revenue, 8 F.3d 571 (7th Cir. 1993). “If, moreover, current interest rates were used both for calculating the value of the original gift to charity (as the Internal Revenue Service has been required to do since 1989, 26 U.S.C. § 7520 ) and for commuting, commutation would change only the form and not the value of…”
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