IRS Revises Actuarial Tables


The IRS issued final regulations Thursday 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 ( TD 9540 ) were necessary because IRC § 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 (TD 9448 and REG-107845-08) issued in May 2009 to reflect changes in mortality data based on the 2000 U.S. Census.

 

IRC § 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 section 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 Treas. Reg. § 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 Aug. 10, 2011.

 

More from the JofA:

 

 Find us on Facebook  |   Follow us on Twitter  |   View JofA videos

SPONSORED REPORT

How the election may affect taxation of business income

This report summarizes recent proposals to reform the U.S. business income tax system and considers the path to enactment of any such legislation.

VIDEO

How to Excel pivot a general ledger

The general ledger is a vast historical data archive of your company's financial activities, including revenue, expenses, adjustments, and account balances. J. Carlton Collins, CPA, shows how to prepare data for, and mine data with, PivotTables.

QUIZ

Did you follow 2016’s biggest accounting news?

CPAs will remember 2016 as a year of new standards and new faces. How well did you follow the biggest accounting events? The 7 questions in this quiz will help you find out