# Bulletin No. 2022–21

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URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3Af5b612ba595c8924

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- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

HIGHLIGHTS
OF THIS ISSUE




Bulletin No. 2022–21
May 23, 2022

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

ADMINISTRATIVE, INCOME TAX
Rev. Proc. 2022-22, page 1098.
This revenue procedure provides two simplified procedures for bona fide residents of Puerto Rico who are
not otherwise required to file taxable year 2021 Federal
tax returns, and who meet certain other requirements
(Puerto Rico CTC filers) to claim the child tax credit.
Under section 4 of this revenue procedure, Puerto Rico
CTC filers who file simplified U.S. self-employment tax
returns may omit their modified adjusted gross income
for the purpose of claiming the child tax credit. Under
section 5 of this revenue procedure, Puerto Rico CTC
filers who file simplified Federal income tax returns may
omit their modified adjusted gross income for the purpose of claiming the child tax credit.

ESTATE TAX, GIFT TAX, INCOME TAX
REG-122770-18, page 1104.
These proposed regulations provide guidance relating
to the use of actuarial tables in valuing annuities, interests for life or a term of years, and remainder or
reversionary interests. These regulations will affect

Finding Lists begin on page ii.

the valuation of inter vivos and testamentary transfers
of interests dependent on one or more measuring
lives. These regulations are necessary because section 7520(c)(3) directs the Secretary to update the
actuarial tables to reflect the most recent mortality
experience available.

INCOME TAX
Notice 2022-20, page 1095.
This notice publishes the inflation adjustment factor and
reference price for calendar year 2022 for the renewable electricity production credit under section 45 of
the Internal Revenue Code. The notice also provides
the credit amounts for calendar year 2022 under
section 45.
Notice 2022-24, page 1097.
The notice announces that under § 613A(c)(6)(C) of the
Internal Revenue Code, the applicable percentage for
purposes of determining percentage depletion on marginal properties for calendar year 2022 is 15 percent.
The format of the notice is identical to the format of
notices previously published on this issue.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

May 23, 2022 

Bulletin No. 2022–21

Part III
Credit for Renewable
Electricity Production and
Publication of Inflation
Adjustment Factor and
Reference Price for
Calendar Year 2022
Notice 2022-20
This notice publishes the inflation adjustment factor and reference price for
calendar year 2022 for the renewable electricity production credit under section 45
of the Internal Revenue Code. The 2022
inflation adjustment factor and reference
price are used in determining the availability of the credit and apply to calendar
year 2022 sales of kilowatt hours of electricity produced in the United States or a
possession thereof from qualified energy
resources. For calendar year 2022, the
credit period for refined coal production
and Indian coal production expired.
BACKGROUND
Section 45(a) provides that the renewable electricity production credit for any
tax year is an amount equal to the product of 1.5 cents multiplied by the kilowatt
hours of specified electricity produced
by the taxpayer and sold to an unrelated
person during the tax year. This electricity must be produced from qualified energy resources and at a qualified facility
during the 10-year period beginning on
the date the facility was originally placed
in service.
Section 45(b)(1) provides that the
amount of the credit determined under
section 45(a) is reduced by an amount
which bears the same ratio to the amount
of the credit as (A) the amount by which
the reference price for the calendar year
in which the sale occurs exceeds 8 cents,
bears to (B) 3 cents. Under section 45(b)
(2), the 1.5 cent amount in section 45(a)
and the 8 cent amount in section 45(b)
(1) are each adjusted by multiplying such
amount by the inflation adjustment factor
for the calendar year in which the sale

Bulletin No. 2022–21

occurs. If any amount as increased under
the preceding sentence is not a multiple
of 0.1 cent, the amount is rounded to the
nearest multiple of 0.1 cent. In the case of
electricity produced in open-loop biomass
facilities, landfill gas facilities, trash facilities, qualified hydropower facilities, and
marine and hydrokinetic renewable energy facilities, section 45(b)(4)(A) requires
the amount in effect under section 45(a)
(1) (before rounding to the nearest 0.1
cent) to be reduced by one-half.
Section 45(b)(5) provides that in the
case of any facility using wind to produce
electricity, the amount of the credit determined under section 45(a) (determined after the application of section 45(b)(1), (2),
and (3) and without regard to section 45(b)
(5)) shall be reduced by (A) in the case
of any facility the construction of which
begins after December 31, 2016, and before January 1, 2018, 20 percent, (B) in
the case of any facility the construction of
which begins after December 31, 2017,
and before January 1, 2019, 40 percent,
(C) in the case of any facility the construction of which begins after December
31, 2018, and before January 1, 2020, 60
percent, and (D) in the case of any facility the construction of which begins after
December 31, 2019, and before January 1,
2022, 40 percent.
Section 45(c)(1) defines qualified energy resources as wind, closed-loop biomass, open-loop biomass, geothermal
energy, municipal solid waste, qualified
hydropower production, and marine and
hydrokinetic renewable energy.
Section 45(d)(1) defines a qualified
facility using wind to produce electricity
as any facility owned by the taxpayer that
is originally placed in service after December 31, 1993, and the construction of
which begins before January 1, 2022. See
section 45(e)(7) for rules relating to the
inapplicability of the credit to electricity
sold to utilities under certain contracts.
Section 45(d)(2)(A) defines a qualified
facility using closed-loop biomass to produce electricity as any facility (i) owned
by the taxpayer that is originally placed in
service after December 31, 1992, and the
construction of which begins before January 1, 2022, or (ii) owned by the taxpayer

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which before January 1, 2022 is originally placed in service and modified to use
closed-loop biomass to co-fire with coal,
with other biomass, or with both, but only
if the modification is approved under the
Biomass Power for Rural Development
Programs or is part of a pilot project of
the Commodity Credit Corporation as
described in 65 FR 63052. For purposes
of section 45(d)(2)(A)(ii), a facility shall
be treated as modified before January 1,
2022, if the construction of such modification begins before such date. Section 45(d)
(2)(C) provides that in the case of a qualified facility described in section 45(d)(2)
(A)(ii), (i) the 10-year period referred to
in section 45(a) is treated as beginning no
earlier than the date of the enactment of
section 45(d)(2)(C)(i) (October 22, 2004),
and (ii) if the owner of such facility is not
the producer of the electricity, the person
eligible for the credit allowable under
section 45(a) is the lessee or the operator
of such facility. A qualified facility using
closed-loop biomass includes a new unit
placed in service after the date of the enactment of section 45(d)(2)(B) (October 3,
2008) in connection with a qualified facility using closed-loop biomass, but only to
the extent of the increased amount of electricity produced at the facility by reason of
such new unit.
Section 45(d)(3)(A) defines a qualified facility using open-loop biomass to
produce electricity as any facility owned
by the taxpayer which (i) in the case of a
facility using agricultural livestock waste
nutrients, (I) is originally placed in service
after the date of the enactment of section
45(d)(3)(A)(i)(I) (October 22, 2004) and
the construction of which begins before
January 1, 2022, and (II) the nameplate
capacity rating of which is not less than
150 kilowatts, and (ii) in the case of any
other facility, the construction of which
begins before January 1, 2022. In the case
of any facility described in section 45(d)
(3)(A), if the owner of such facility is not
the producer of the electricity, section
45(d)(3)(C) provides that the person eligible for the credit allowable under section
45(a) is the lessee or the operator of such
facility. A qualified facility using openloop biomass includes a new unit placed

May 23, 2022

in service after the date of the enactment
of section 45(d)(3)(B) (October 3, 2008)
in connection with a qualified facility using open-loop biomass, but only to the extent of the increased amount of electricity
produced at the facility by reason of such
new unit.
Section 45(d)(4) defines a qualified
facility using geothermal energy to produce electricity as any facility owned by
the taxpayer that is originally placed in
service after the date of the enactment of
section 45(d)(4) (October 22, 2004) and
the construction of which begins before
January 1, 2022. A qualified facility using
geothermal energy does not include any
property described in section 48(a)(3) the
basis of which is taken into account by the
taxpayer for purposes of determining the
energy credit under section 48.
Section 45(d)(6) defines a qualified
facility using gas derived from the biodegradation of municipal solid waste to
produce electricity as any facility owned
by the taxpayer that is originally placed in
service after the date of the enactment of
section 45(d)(6) (October 22, 2004) and
the construction of which begins before
January 1, 2022.
Section 45(d)(7) defines a qualified
facility (other than a facility described in
section 45(d)(6)) that uses municipal solid
waste to produce electricity as any facility
owned by the taxpayer that is originally
placed in service after the date of the enactment of section 45(d)(7) (October 22,
2004) and the construction of which begins before January 1, 2022. A qualified
facility using municipal solid waste includes a new unit placed in service in connection with a facility placed in service on
or before the date of the enactment of section 45(d)(7), but only to the extent of the
increased amount of electricity produced
at the facility by reason of such new unit.
Section 45(d)(9) defines a qualified
facility producing qualified hydroelectric
production described in section 45(c)(8)
as (i) any facility producing incremental
hydropower production, but only to the
extent of its incremental hydropower production attributable to efficiency improvements or additions to capacity described in
section 45(c)(8)(B) placed in service after
the date of the enactment of section 45(d)
(9) (August 8, 2005) and before January
1, 2022, and (ii) any other facility placed

May 23, 2022

in service after the date of the enactment
of section 45(d)(9) (August 8, 2005) and
the construction of which begins before
January 1, 2022. Section 45(d)(9)(B) provides that, in the case of a qualified facility described in section 45(d)(9)(A), the
10-year period referred to in section 45(a)
shall be treated as beginning on the date
the efficiency improvements or additions
to capacity are placed in service. Section
45(d)(9)(C) provides that for purposes of
section 45(d)(9)(A)(i), an efficiency improvement or addition to capacity shall be
treated as placed in service before January
1, 2022 if the construction of such improvement or addition begins before such
date.
Section 45(d)(11) provides in the case
of a facility producing electricity from
marine and hydrokinetic renewable energy, the term “qualified facility” means any
facility owned by the taxpayer which (A)
has a nameplate capacity rating of at least
150 kilowatts, and (B) is originally placed
in service on or after the date of the enactment of section 45(d)(11) (October 3,
2008) and the construction of which begins before January 1, 2022.
Section 45(e)(2)(A) requires the Secretary to determine and publish in the Federal Register each calendar year the inflation
adjustment factor and the reference price
for such calendar year. The inflation adjustment factor and the reference price for
the 2022 calendar year were published in
the Federal Register at 87 FR 22286 on
April 14, 2022. A Correction notice was
published in the Federal Register at 87 FR
27204 on May 6, 2022.
Section 45(e)(2)(B) defines the inflation adjustment factor for a calendar year
as a fraction the numerator of which is the
GDP implicit price deflator for the preceding calendar year and the denominator
of which is the GDP implicit price deflator for the calendar year 1992. The term
“GDP implicit price deflator” means the
most recent revision of the implicit price
deflator for the gross domestic product as
computed and published by the Department of Commerce before March 15 of
the calendar year.
Section 45(e)(2)(C) provides that the
reference price is the Secretary’s determination of the annual average contract price
per kilowatt hour of electricity generated
from the same qualified energy resource

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and sold in the previous year in the United
States. Only contracts entered into after
December 31, 1989 are taken into account.
INFLATION ADJUSTMENT
FACTOR AND REFERENCE PRICE
The inflation adjustment factor for calendar year 2022 for qualified energy resources is 1.7593.
The reference price for calendar year
2022 for facilities producing electricity
from wind (based upon information provided by the Department of Energy) is
4.09 cents per kilowatt hour. The reference
prices for facilities producing electricity
from closed-loop biomass, open-loop biomass, geothermal energy, municipal solid
waste, qualified hydropower production,
and marine and hydrokinetic energy have
not been determined for calendar year
2022.
PHASEOUT CALCULATION
Because the 2022 reference price for
electricity produced from wind (4.09 cents
per kilowatt hour) does not exceed 8 cents
multiplied by the inflation adjustment factor (1.7593), the phaseout of the credit
provided in section 45(b)(1) does not apply to such electricity sold during calendar year 2022. However, refer to section
45(b)(5) for an additional phaseout of the
credit for wind facilities the construction
of which begins after December 31, 2016.
For electricity produced from closed-loop
biomass, open-loop biomass, geothermal
energy, municipal solid waste, qualified
hydropower production, and marine and
hydrokinetic energy, the phaseout of the
credit provided in section 45(b)(1) does
not apply to such electricity sold during
calendar year 2022.
CREDIT AMOUNT BY QUALIFIED
ENERGY RESOURCE AND
FACILITY
As required by section 45(b)(2), the 1.5
cent amount in section 45(a)(1) is adjusted
by multiplying such amount by the inflation adjustment factor for the calendar year
in which the sale occurs. If any amount as
increased under the preceding sentence is
not a multiple of 0.1 cent, such amount
is rounded to the nearest multiple of 0.1

Bulletin No. 2022–21

cent. In the case of electricity produced in
open-loop biomass facilities, landfill gas
facilities, trash facilities, qualified hydropower facilities, and marine and hydrokinetic renewable energy facilities, section
45(b)(4)(A) requires the amount in effect
under section 45(a)(1) (before rounding to
the nearest 0.1 cent) to be reduced by onehalf. Under the calculation required by
section 45(b)(2), the credit for renewable
electricity production for calendar year
2022 under section 45(a) is 2.6 cents per
kilowatt hour on the sale of electricity produced from the qualified energy resources
of wind, closed-loop biomass, and geothermal energy, and 1.3 cents per kilowatt
hour on the sale of electricity produced in
open-loop biomass facilities, landfill gas
facilities, trash facilities, qualified hydropower facilities, and marine and hydrokinetic energy facilities.

DRAFTING AND CONTACT
INFORMATION
The principal author of this notice is
Charles Hyde of the Office of Associate
Chief Counsel (Passthroughs & Special
Industries). For further information regarding this notice contact Mr. Hyde at
(202) 317-6853 (not a toll-free number).

2022 Marginal Production
Rates
Notice 2022-24
This notice announces the applicable
percentage under § 613A of the Internal
Revenue Code to be used in determining

percentage depletion for marginal properties for the 2022 calendar year.
Section 613A(c)(6)(C) defines the term
“applicable percentage” for purposes of
determining percentage depletion for oil
and gas produced from marginal properties. The applicable percentage is the
percentage (not greater than 25 percent)
equal to the sum of 15 percent, plus one
percentage point for each whole dollar
by which $20 exceeds the reference price
(determined under § 45K(d)(2)(C)) for
crude oil for the calendar year preceding
the calendar year in which the taxable year
begins. The reference price determined
under § 45K(d)(2)(C) for the 2021 calendar year is $65.90.
The following table contains the applicable percentages for marginal production
for taxable years beginning in calendar
years 1991 through 2022.

Notice 2022-24
APPLICABLE PERCENTAGE FOR MARGINAL
PRODUCTION
Calendar Year
Applicable Percentage
1991
15 percent
1992
18 percent
1993
19 percent
1994
20 percent
1995
21 percent
1996
20 percent
1997
16 percent
1998
17 percent
1999
24 percent
2000
19 percent
2001
15 percent
2002
15 percent
2003
15 percent
2004
15 percent
2005
15 percent
2006
15 percent
2007
15 percent
2008
15 percent
2009
15 percent
2010
15 percent
2011
15 percent
2012
15 percent
2013
15 percent

Bulletin No. 2022–21

1097

May 23, 2022

Notice 2022-24
APPLICABLE PERCENTAGE FOR MARGINAL
PRODUCTION
Calendar Year
Applicable Percentage
2014
15 percent
2015
15 percent
2016
15 percent
2017
15 percent
2018
15 percent
2019
15 percent
2020
15 percent
2021
15 percent
2022
15 percent

The principal author of this notice
is Elimelech Brander of the Office of
Associate Chief Counsel (Passthroughs
and Special Industries). For further information regarding this notice contact Mr.
Brander at (202) 317-6853 (not a toll-free
number).
26 CFR 1.6012-1: Individuals required to make
returns of income.
(Also Part I, §§ 24, 933, 7527A; 1.933-1.)

Rev. Proc. 2022-22
SECTION 1. PURPOSE
.01 This revenue procedure provides
simplified procedures for certain bona fide
residents of the Commonwealth of Puerto
Rico (Puerto Rico) to claim the child tax
credit under § 24.1 The Department of the
Treasury and the Internal Revenue Service
(IRS) have provided these procedures to
make it easier for certain bona fide residents of Puerto Rico to file taxable year
2021 Federal tax returns to claim the child
tax credit.
.02 Section 2 of this revenue procedure
describes the child tax credit in further detail. Section 3 of this revenue procedure
describes the scope of the procedures
provided in this revenue procedure. Section 4 of this revenue procedure provides
a simplified procedure for filing Form

1

1040-PR, Planilla para la Declaración
de la Contribución Federal sobre el Trabajo por Cuenta Propia, or Form 1040SS, U.S. Self-Employment Tax Return, to
claim the child tax credit. Section 5 of this
revenue procedure provides a simplified
procedure for filing Form 1040, U.S. Individual Income Tax Return (also available
as Formulario 1040(SP), Declaración de
Impuestos de los Estados Unidos Sobre los
Ingresos Personales), or Form 1040-SR,
U.S. Tax Return for Seniors (also available
as Formulario 1040-SR(SP), Declaración
de Impuestos de los Estados Unidos para
Personas de 65 Años de Edad o Más), to
claim the child tax credit.
SECTION 2. BACKGROUND
.01 Overview of 2021 Child Tax Credit. Section 9611 of the American Rescue
Plan Act of 2021 (American Rescue Plan),
Public Law 117-2, 135 Stat. 4, 144-149
(March 11, 2021), added §§ 24(i), 24(j),
and 7527A to the Code. Section 24(i)
modifies the child tax credit rules set forth
in § 24 for any taxable year beginning after December 31, 2020, and before January 1, 2022 (taxable year 2021). Section
7527A provides for advance payments of
the child tax credit and section 24(j) provides that the amount of the child tax credit is generally reduced by these advance
payments. Section 9612(a) of the American Rescue Plan added § 24(k) to the

Code to provide special rules for American Samoa, Guam, the Commonwealth
of the Northern Mariana Islands, Puerto
Rico, and the U.S. Virgin Islands (each, a
U.S. territory), effective for taxable years
beginning after December 31, 2020. 135
Stat. at 150-152.
.02 Credit Allowed. Under § 24(a),
a taxpayer may claim a child tax credit
against the taxpayer’s Federal income tax
(as imposed by chapter 1 of the Code) for
the taxable year with respect to each CTC
qualifying child (as defined in section 2.06
of this revenue procedure) of the taxpayer.
.03 Expanded Credit Eligibility for
Bona Fide Residents of Puerto Rico. Starting in 2021, a bona fide resident of Puerto
Rico with one or more CTC qualifying
children may claim the child tax credit.
See §§ 24(i)(1) and 24(k)(2). Prior to enactment of the American Rescue Plan, §
24(d)(1)(B) required bona fide residents
of Puerto Rico who had no earned income
for Federal income tax purposes to have
at least three CTC qualifying children as
a condition for child tax credit eligibility.
.04 Credit Fully Refundable. The child
tax credit for taxable year 2021 is fully
refundable for a taxpayer if the taxpayer (or spouse, if filing a joint return) is a
bona fide resident of Puerto Rico (within
the meaning of § 937(a)) for such taxable
year. See § 24(i)(1). Full refundability
means that taxpayers can benefit from
the maximum amount of the credit even

Unless otherwise specified, all Code, section, and “§” references are to sections of the U.S. Internal Revenue Code (Code).

May 23, 2022

1098

Bulletin No. 2022–21

if they do not have taxable earned income
or do not owe any Federal tax for taxable
year 2021. Bona fide residents of Puerto
Rico may claim the fully refundable child
tax credit for taxable year 2021 even if
they had no income and paid no U.S. Social Security taxes.
.05 Credit Amounts. Taxpayers claiming the child tax credit for taxable year
2021 may receive up to $3,000 for each
CTC qualifying child who is between the
ages of 6 and 17 as of the end of taxable
year 2021, and $3,600 for each CTC qualifying child who is under the age of 6 as of
the end of taxable year 2021. See § 24(i)
(2) and (3). The child tax credit for taxable
year 2021 begins to be reduced if modified
adjusted gross income (AGI) for purposes
of the child tax credit exceeds $150,000
if filing a joint return or if filing as a surviving spouse (as defined in § 2(a) of the
Code); $112,500 if filing as head of household (as defined in § 2(b)); or $75,000 if
filing as single or married and filing a separate return. See § 24(i)(4).
.06 CTC Qualifying Child. A “CTC
qualifying child” is a qualifying child
of the taxpayer (as defined in § 152(c))
who has not attained the age of 18 at the
close of taxable year 2021. See § 24(i)(2)
(A). No child tax credit is allowed for a
qualifying child unless the social security
number (SSN) of the child, which must
be valid for employment and be issued by
the Social Security Administration before
the due date of the taxpayer’s taxable year
Federal income tax return (including extensions), is provided on the return. See §
24(h)(7). If the taxpayer’s child was a U.S.
citizen when the child received the SSN,
the SSN is valid for employment.
.07 Advance Child Tax Credit Payments for Calendar Year 2021. Section
7527A(a) required the Secretary of the
Treasury or her delegate to establish a program for making periodic advance child
tax credit payments to taxpayers the total
of which, during any calendar year, equals
the “annual advance amount” (as defined
in § 7527A(b)(1)) determined with respect
to that taxpayer for that calendar year. Although residents of Puerto Rico may be
eligible to claim the child tax credit, residents of Puerto Rico were not eligible to
receive advance child tax credit payments.
See § 7527A(e)(4)(A). However, there
may have been circumstances in which

Bulletin No. 2022–21

a resident of Puerto Rico nonetheless received advance child tax credit payments
(for example, if the IRS estimated the
Puerto Rico resident’s child tax credit for
taxable year 2021 based on a Form 1040
or Form 1040-SR that the resident filed for
taxable year 2019 or 2020).
.08 Reconciliation Requirement Regarding Child Tax Credit and Advance
Child Tax Credit Payments. Bona fide
residents of Puerto Rico who received
advance child tax credit payments (described in section 2.07 of this revenue
procedure) during calendar year 2021
must reduce (but not below zero) the
amount of the child tax credit claimed
for taxable year 2021 by the total amount
of those advance child tax credit payments. See § 24(j)(1). If the amount of
the taxpayer’s advance child tax credit
payments received in calendar year 2021
exceeds the taxpayer’s allowable child
tax credit for taxable year 2021, the taxpayer’s Federal income tax imposed for
taxable year 2021 will be increased by
the excess subject to reduction by a “safe
harbor amount.” See § 24(j)(2).
SECTION 3. SCOPE
.01 Overview. This revenue procedure
allows Puerto Rico CTC filers (as defined
in section 4.02 of this revenue procedure)
to provide information to the IRS to claim
the child tax credit through the filing of a
simplified Federal tax return using either
of the following procedures: (1) the procedures set forth in section 4 of this revenue
procedure, which allow Puerto Rico CTC
filers to provide this information through
a simplified Form 1040-PR or Form 1040SS or (2) the procedures set forth in section 5 of this revenue procedure, which allow Puerto Rico CTC filers to provide this
information through a simplified Form
1040 or Form 1040-SR.
.02 Purpose of Simplified Filing Procedure under Section 4. Section 4 of this
revenue procedure provides a simplified
filing procedure that permits Puerto Rico
CTC filers to file a Form 1040-PR or Form
1040-SS to claim the child tax credit. Specifically, Puerto Rico CTC filers who file
a simplified Form 1040-PR or Form 1040SS for taxable year 2021 in accordance
with section 4 of this revenue procedure
do not need to specify their income to

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compute the amount of child tax credit
that they are eligible to claim.
.03 Purpose of Simplified Filing Procedure under Section 5. Section 5 of this
revenue procedure provides a simplified
filing procedure that permits Puerto Rico
CTC filers to file a Form 1040 or Form
1040-SR to claim the child tax credit. Specifically, Puerto Rico CTC filers who file
a simplified Form 1040 or Form 1040-SR
for taxable year 2021 in accordance with
section 5 of this revenue procedure do not
need to specify their income to compute
the amount of child tax credit that they are
eligible to claim.
.04 Individuals Who Are Not Puerto
Rico Residents Are Not Eligible. The procedures provided by this revenue procedure apply only to a U.S. citizen or U.S.
resident alien who is a bona fide resident
of Puerto Rico and who is not described in
section 3.05, 3.06, 3.07, or 3.08 of this revenue procedure. The procedures provided
by this revenue procedure do not apply to
a resident of any U.S. territory (as defined
in section 2.01 of this revenue procedure)
other than Puerto Rico, or to a U.S. citizen
or U.S. resident who is not a resident of a
U.S. territory. Residents of a U.S. territory should contact their local territory tax
agency for additional information about
the child tax credit. A U.S. citizen or U.S.
resident who is not a resident of a U.S. territory should refer to Form 1040 or Form
1040-SR, Schedule 8812 (Form 1040),
Credits for Qualifying Children and Other Dependents, and their instructions, to
claim the child tax credit for taxable year
2021. A U.S. citizen or U.S. resident alien
who is not a bona fide resident of Puerto
Rico or a resident of a U.S. territory may
qualify to use the simplified filing procedures set forth in Rev. Proc. 2022-12,
2022-7 I.R.B. 494. See section 4.02(1) and
(6) of this revenue procedure.
.05 Individuals Required to File a
Form 1040-PR, Form 1040-SS, Form
1040, or Form 1040-SR Not Eligible. The
procedures provided by this revenue procedure do not apply to individuals who
are required to file a Form 1040-PR, Form
1040-SS, Form 1040, or Form 1040-SR
for taxable year 2021 (including bona fide
residents of Puerto Rico who are required
to report tax on their self-employment income). See section 4.02(2) and (3) of this
revenue procedure.

May 23, 2022

.06 Individuals With Modified AGI
Above Applicable Income Thresholds
Not Eligible. The procedures provided
by this revenue procedure do not apply to
individuals whose modified AGI for purposes of the child tax credit exceeds the
applicable income threshold for claiming
the maximum child tax credit amount as
described in section 2.05 of this revenue
procedure. That is, the procedures do
not apply to individuals whose modified
AGI exceeds (i) $150,000, if filing a joint
return or filing as a surviving spouse;
(ii) $112,500, if filing as head of household; and (iii) $75,000, if filing as single
or married and filing a separate return. The
amount of income of an individual with
modified AGI at or below their applicable threshold will not impact the amount
of the child tax credit that the individual
is eligible to claim. See section 4.02(4) of
this revenue procedure.
.07 Individuals Who Received Excess
Advance Child Tax Credit Payments Not
Eligible. The procedures provided by this
revenue procedure apply to individuals
who need to file a Federal income tax
return to claim the child tax credit in an
amount greater than zero for taxable year
2021. Individuals who received advance
child tax credit payments during calendar year 2021, the total amount of which
equals or exceeds the individual’s allowable child tax credit for taxable year 2021,
cannot claim the child tax credit in an
amount greater than zero for taxable year
2021. Accordingly, the procedures provided by this revenue procedure do not apply
to such individuals, and they cannot file a
Federal tax return under this revenue procedure. See section 4.02(5) of this revenue
procedure.
.08 Individuals Who Previously Filed
a Form 1040-PR, Form 1040-SS, Form
1040, or Form 1040-SR Not Eligible. The
procedures provided by this revenue procedure do not apply to individuals who
have already filed a paper or electronic
Form 1040-PR, Form 1040-SS, Form
1040, or Form 1040-SR for taxable year
2021. Such individuals do not need to file
any additional forms or otherwise contact
the IRS to claim the child tax credit for
each CTC qualifying child if the child tax
credit was claimed on the previously filed
return for taxable year 2021. See section
4.02(7) of this revenue procedure.

May 23, 2022

SECTION 4. SPECIAL PROCEDURE
FOR PUERTO RICO CTC FILERS
TO FILE FORM 1040-PR OR FORM
1040-SS TO CLAIM THE CHILD
TAX CREDIT
.01 Federal Tax Return Claiming the
Child Tax Credit. Under the simplified
procedure set forth in this section 4, a
simplified return may be filed, on paper or
electronically, for taxable year 2021 on a
Form 1040-PR or Form 1040-SS. A Federal tax return for taxable year 2021 filed
by a Puerto Rico CTC filer under the simplified procedure in this section 4 will result in the Puerto Rico CTC filer claiming
the child tax credit for taxable year 2021.
.02 Definition of Puerto Rico CTC
Filer. For purposes of this revenue procedure, a “Puerto Rico CTC filer” is an
individual-(1) Who is a bona fide resident of Puerto Rico (within the meaning of § 937(a)
for taxable year 2021);
(2) Whose income for taxable year
2021 is completely exempt from taxation
under § 933;
(3) Who is not required to file a Form
1040-PR, Form 1040-SS, Form 1040,
or Form 1040-SR for taxable year 2021,
such as to report tax on self-employment
income;
(4) Whose modified AGI for taxable
year 2021 under § 24(b)(1) is less than or
equal to their applicable income threshold
under § 24(i)(4)(B);
(5) Who is eligible to claim the child
tax credit in an amount greater than zero
for taxable year 2021;
(6) Who is a U.S. citizen or resident
alien (or is treated as a United States resident alien in accordance with an election
under § 6013(g) or (h)); and
(7) Who has not already filed a paper or
electronic Form 1040-PR, Form 1040-SS,
Form 1040, or Form 1040-SR for taxable
year 2021.
.03 Simplified Filing Method.
(1) Overview. In the case of a Puerto
Rico CTC filer, the IRS will process the
filer’s Form 1040-PR or Form 1040-SS
for taxable year 2021 to calculate the
child tax credit if the form is prepared in
the manner required by this section 4.03.
The Form 1040-PR or Form 1040-SS
must include the information described
in this section 4.03 to claim the child tax

1100

credit. The information described in this
section 4.03 generally follows the standard IRS instructions except that a Puerto
Rico CTC filer is not required to report the
filer’s modified AGI on line 1 of Part II. A
Puerto Rico CTC filer may file a Schedule LEP (Form 1040), Request for Change
in Language Preference (also available
as Anexo LEP (Formulario 1040(SP)),
Solicitud para Cambiar la Preferencia
de Idioma), with Form 1040-PR or Form
1040-SS to request a change in language
preference for further communications
from the IRS.
(2) Personal information. A Puerto
Rico CTC filer must enter their name,
mailing address, and SSN or IRS Individual Taxpayer Identification Number
(ITIN), and the name and SSN or ITIN of
their spouse if filing a joint return, at the
top of Form 1040-PR or Form 1040-SS.
(3) Virtual currency. A Puerto Rico
CTC filer must check the appropriate box
indicating whether the filer (either filer if
filing a joint return) received, sold, exchanged, or otherwise disposed of a financial interest in any virtual currency.
(4) Part I, line 1 (filing status). A Puerto Rico CTC filer must select their filing
status for taxable year 2021 on line 1 of
Part I.
(5) Part I, line 2 (CTC qualifying children). A Puerto Rico CTC filer must complete the appropriate lines on line 2 of Part
I regarding each CTC qualifying child for
taxable year 2021 who has an SSN that is
valid for employment. For each individual claimed as a CTC qualifying child,
the Puerto Rico CTC filer must provide
the name, SSN, and relationship to the
individual.
(6) Part I, lines 3 through 8. A Puerto
Rico CTC filer must leave lines 3 through
8 of Part I blank.
(7) Part I, line 9 (child tax credit entry). A Puerto Rico CTC filer must complete line 9 of Part I. To determine this
amount, the Puerto Rico CTC filer must:
(a) Compute the sum of the following:
(i) $3,600 multiplied by the number of
CTC qualifying children of the filer listed
on line 2 of Part I who were under age 6 at
the end of taxable year 2021; and
(ii) $3,000 multiplied by the number of
CTC qualifying children of the filer listed
on line 2 of Part I who were under age 18
at the end of taxable year 2021 but who

Bulletin No. 2022–21

were not under age 6 at the end of taxable
year 2021;
(b) Subtract from that sum the aggregate amount of advance child tax credit
payments the filer (and the filer’s spouse
if filing jointly) received for 2021, if any,
which may be obtained from the filer’s
Letter 6419 or the filer’s IRS online account at https://www.irs.gov/account and,
as applicable, Letter 6419 of the filer’s
spouse or the IRS online account of the
filer’s spouse; and
(c) Enter that result on line 9 of Part I.
(8) Part I, lines 10 through 11b. A
Puerto Rico CTC filer must leave lines 10
through 11b of Part I blank.
(9) Part I, lines 12 through 14a. A
Puerto Rico CTC filer must enter on lines
12 through 14a of Part I the amount entered on line 9 of Part I.
(10) Part I, line 14a checkbox (split
direct deposit indicator). A Puerto Rico
CTC filer may not check the box on line
14a of Part I.
(11) Part I, lines 14b through 14d (direct deposit information). A Puerto Rico
CTC filer may request the direct deposit
of their taxable year 2021 tax refund into
an account at a bank or other financial institution by entering the information on
lines 14b through 14d of Part I. The Puerto
Rico CTC filer must not request that their
taxable year 2021 tax refund be deposited into an account that is not in the name
of that filer (for example, a Puerto Rico
CTC filer must not request a direct deposit
of their taxable year 2021 tax refund into
their tax return preparer’s account).
(12) Part I, lines 15 and 16. A Puerto
Rico CTC filer must leave lines 15 and 16
of Part I blank.
(13) Part II, line 1 (modified adjusted
gross income). A Puerto Rico CTC filer
must leave line 1 of Part II blank.
(14) Part II, line 3 (refundable child
tax credit). A Puerto Rico CTC filer must
enter on line 3 of Part II the amount entered on line 9 of Part I.
(15) Parts III through VI. A Puerto Rico
CTC filer must leave Parts III through VI
blank.
(16) Signature. A Puerto Rico CTC
filer must sign the return under penalties
of perjury, including the filer’s identity
protection personal identification number
(that is, the filer’s IP PIN), if applicable,
as part of the filer’s signature. In addition,

Bulletin No. 2022–21

the Puerto Rico CTC filer may enter the
identifying information of any third-party
designee, if applicable, at the bottom of
page 1 of Form 1040-PR or Form 1040SS. A Puerto Rico CTC filer who has been
assigned an IP PIN, but has misplaced
it, may retrieve the IP PIN at https://
www.irs.gov/identity-theft-fraud-scams/
retrieve-your-ip-pin.
.04 Simplified Return Is a Federal Tax
Return. A simplified return completed by a
Puerto Rico CTC filer in accordance with
the procedure described in section 4.03 of
this revenue procedure is a taxable year
2021 Federal tax return for all purposes,
whether filed on paper or electronically.
SECTION 5. SPECIAL PROCEDURE
FOR PUERTO RICO CTC FILERS
TO FILE FORM 1040 OR FORM
1040-SR TO CLAIM THE CHILD
TAX CREDIT
.01 Federal Tax Return Claiming the
Child Tax Credit. Under the simplified
procedure set forth in this section 5, a
simplified return may be filed, on paper or
electronically, for taxable year 2021 on a
Form 1040 or Form 1040-SR. A Federal
tax return for taxable year 2021 filed by
a Puerto Rico CTC filer under the simplified procedure in this section 5 will result
in the Puerto Rico CTC filer claiming the
child tax credit for taxable year 2021.
.02 Definition of Puerto Rico CTC Filer. For purposes of this section 5, a “Puerto
Rico CTC filer” has the same definition as
in section 4.02 of this revenue procedure.
.03 Simplified Filing Method.
(1) Overview. In the case of a Puerto
Rico CTC filer, the IRS will process the
filer’s Form 1040 or Form 1040-SR for
taxable year 2021 to calculate the child
tax credit for taxable year 2021 if the form
is prepared in the manner required by this
section 5.03. The Form 1040 or Form
1040-SR must include the information
described in this section 5.03 to claim the
child tax credit. The information described
in this section 5.03 generally follows the
standard IRS instructions for filers whose
income is completely exempt from taxation under § 933 except that a Puerto Rico
CTC filer is not required to report the filer’s modified AGI on lines 1 through 3
of Schedule 8812 (Form 1040). A Puerto
Rico CTC filer may file a Schedule LEP

1101

(Form 1040) with Form 1040 or Form
1040-SR to request a change in language
preference for further communications
from the IRS.
(2) Required general information on
Form 1040 or Form 1040-SR.
(a) Filing status. A Puerto Rico CTC
filer must select their filing status for taxable year 2021 at the top of Form 1040 or
Form 1040-SR.
(b) Personal information. A Puerto
Rico CTC filer must enter their name,
mailing address, and SSN or ITIN, and
the name and SSN or ITIN of their spouse
if filing a joint return, on the appropriate
lines of Form 1040 or Form 1040-SR.
(3) Virtual currency. A Puerto Rico
CTC filer must check the appropriate box
on Form 1040 or Form 1040-SR indicating whether the filer (either filer if filing a
joint return) received, sold, exchanged, or
otherwise disposed of a financial interest
in any virtual currency.
(4) Individuals who could be claimed
as dependents by other individuals. A
Puerto Rico CTC filer must check the applicable boxes in the top line of the “Standard Deduction” section of the Form 1040
or Form 1040-SR for each individual who
can be claimed as a dependent by any other individual for taxable year 2021.
(5) General information regarding
dependents.
(a) In general. A Puerto Rico CTC filer must complete the appropriate lines in
the “Dependents” section of Form 1040 or
Form 1040-SR regarding each CTC qualifying child for taxable year 2021 who has
an SSN that is valid for employment. For
each individual claimed as a CTC qualifying child, the Puerto Rico CTC filer must
provide the name, SSN, and relationship
to the individual.
(b) CTC qualifying children. A Puerto
Rico CTC filer must check the child tax
credit box in Column (4) of the “Dependents” section for each CTC qualifying
child for taxable year 2021 who has an
SSN that is valid for employment.
(6) Limited information to provide
in Form 1040 or Form 1040-SR, lines 1
through 38. A Puerto Rico CTC filer must
leave blank lines 1 through 38 of Form
1040 or Form 1040-SR, except as provided in this section 5.03(6):
(a) Line 28 (child tax credit entry).
A Puerto Rico CTC filer must enter

May 23, 2022

the amount of the filer’s child tax credit for taxable year 2021 on line 28. The
credit amount may be computed using
Schedule 8812 (Form 1040), available at
https://www.irs.gov/Schedule8812 (also
available as Anexo 8812 (Formulario
1040(SP)), Créditos por Hijos Calificados
y Otros Dependientes, at https://www.irs.
gov/Schedule8812SP), and information
from the filer’s Letter 6419 or the filer’s
IRS online account at https://www.irs.gov/
account and, as applicable, Letter 6419 of
the filer’s spouse or the IRS online account of the filer’s spouse. The filer claiming the child tax credit must (i) complete
Schedule 8812 pursuant to the instructions
described in section 5.03(8) through (22)
of this revenue procedure, and (ii) attach
the Schedule 8812 to the filer’s Form 1040
or Form 1040-SR.
(b) Lines 32 through 35a. A Puerto Rico
CTC filer must enter on lines 32 through
35a the amount entered on line 28.
(c) Line 35a checkbox (split direct deposit indicator). A Puerto Rico CTC filer
may not check the box on line 35a.
(d) Lines 35b through 35d (direct deposit information). A Puerto Rico CTC
filer may request the direct deposit of their
taxable year 2021 tax refund into an account at a bank or other financial institution by entering the information on lines
35b through 35d. The Puerto Rico CTC
filer must not request that their taxable
year 2021 tax refund be deposited into an
account that is not in the name of that filer (for example, a Puerto Rico CTC filer
must not request a direct deposit of their
taxable year 2021 tax refund into their tax
return preparer’s account).
(7) Signature. A Puerto Rico CTC filer
must sign the Form 1040 or Form 1040-SR
under penalties of perjury, including the
filer’s identity protection personal identification number (that is, the filer’s IP PIN),
if applicable, as part of the filer’s signature.
In addition, the Puerto Rico CTC filer may
enter the identifying information of any
third-party designee, if applicable, at the
bottom of page 2 of Form 1040 or Form
1040-SR. A Puerto Rico CTC filer who
has been assigned an IP PIN, but has misplaced it, may retrieve the IP PIN at https://
www.irs.gov/identity-theft-fraud-scams/
retrieve-your-ip-pin.

May 23, 2022

(8) Schedule 8812. A Puerto Rico CTC
filer must enter the filer’s name and SSN
and the name of their spouse if filing a
joint return at the top of Schedule 8812.
(9) Schedule 8812, Part I-A, lines 1
through 3 (modified AGI). A Puerto Rico
CTC filer must leave lines 1 through 3 of
Schedule 8812 (Form 1040) blank.
(10) Schedule 8812, Part I-A, lines
4a-c (CTC qualifying children). A Puerto
Rico CTC filer must complete lines 4a, 4b
and 4c.
(11) Schedule 8812, Part I-A, line 5
(child tax credit). A Puerto Rico CTC filer
must complete line 5. In completing line
5, the Puerto Rico CTC filer must provide
the sum of the following:
(a) $3,600 multiplied by the number
entered on line 4b; and
(b) $3,000 multiplied by the number
entered on line 4c.
(12) Schedule 8812, Part I-A, line 6
(credit for other dependents) and line 7.
A Puerto Rico CTC filer must leave lines
6 and 7 blank.
(13) Schedule 8812, Part I-A, line 8. A
Puerto Rico CTC filer must enter on line 8
the amount entered on line 5.
(14) Schedule 8812, Part I-A, line 9: A
Puerto Rico CTC filer must enter on line 9
$200,000 (or $400,000 if married and filing a joint return).
(15) Schedule 8812, Part I-A, lines
10 and 11. A Puerto Rico CTC filer must
leave lines 10 and 11 blank.
(16) Schedule 8812, Part I-A, line 12.
A Puerto Rico CTC filer must enter on line
12 the amount entered on line 5.
(17) Schedule 8812, Part I-A, line 13.
A Puerto Rico CTC filer must check only
the box on line 13B.
(18) Schedule 8812, Part I-B, line 14a.
A Puerto Rico CTC filer must leave line
14a blank.
(19) Schedule 8812, Part I-B, line 14b.
A Puerto Rico CTC filer must enter on line
14b the amount entered on line 5.
(20) Schedule 8812, Part I-B, lines 14c
and 14d. A Puerto Rico CTC filer must
leave lines 14c and 14d blank.
(21) Schedule 8812, Part I-B, line 14e.
A Puerto Rico CTC filer must enter on line
14e the amount entered on line 5.
(22) Schedule 8812, Part I-B, line
14f (advance child tax credit payments

1102

received). A Puerto Rico CTC filer must
enter on line 14f the aggregate amount
of advance child tax credit payments the
filer (and the filer’s spouse if filing jointly) received for 2021, which may be obtained from the filer’s Letter 6419 or the
filer’s IRS online account at https://www.
irs.gov/account and, as applicable, Letter
6419 of the filer’s spouse or the IRS online account of the filer’s spouse.
(23) Schedule 8812, Part I-B, line 14g
(allowable child tax credit). A Puerto Rico
CTC filer must complete line 14g. To determine this amount, the Puerto Rico CTC
filer must:
(a) Subtract the amount entered on line
14f from the amount entered on line 14e
(that is, the filer must subtract the aggregate amount of advance child tax credit
payments that the filer received in 2021,
if any, from the amount of child tax credit
for which the filer is eligible); and
(b) Enter that result (that is, the allowable child tax credit) on line 14g.
(24) Schedule 8812, Part I-B, line 14h.
A Puerto Rico CTC filer must leave line
14h blank.
(25) Schedule 8812, Part I-B, line 14i
(refundable child tax credit). A Puerto
Rico CTC filer must enter on line 14i the
amount entered on line 14g.
(26) Schedule 8812, Parts I-C through
III, lines 15a through 50. A Puerto Rico
CTC filer must leave lines 15a through 50
blank.
.04 Simplified Return Is a Federal Tax
Return. A simplified return completed by a
Puerto Rico CTC filer in accordance with
the procedure described in section 5.03 of
this revenue procedure is a taxable year
2021 Federal tax return for all purposes,
whether filed on paper or electronically.
SECTION 6. APPLICABILITY
DATE
This revenue procedure applies to Federal tax returns filed after May 6, 2022.
SECTION 7. ADDITIONAL
INFORMATION
.01 Child Tax Credit and Advance
Child Tax Credit Payments. Individuals can obtain additional information

Bulletin No. 2022–21

regarding advance child tax credit payments and the child tax credit for taxable year 2021 through the IRS child tax
credit and advance child tax credit payment webpage at https://www.irs.gov/
childtaxcredit2021.
.02 Completing a Federal Tax Return. Bona fide residents of Puerto Rico
can obtain additional information regarding how to complete their Federal

Bulletin No. 2022–21

tax returns at https://www.irs.gov/Form1040PR (in Spanish); https://www.irs.
gov/Form1040SS; https://www.irs.gov/
Form1040SP (in Spanish); https://www.
irs.gov/Form1040; and https://www.irs.
gov/Form1040SR.
.03 Obtaining Tax Information in Other Languages. Taxpayers may obtain basic tax information in other languages at
https://www.irs.gov/MyLanguage.

1103

SECTION 8. DRAFTING
INFORMATION
The principal author of this revenue procedure is the Office of the Associate Chief Counsel (Income Tax &
Accounting).

May 23, 2022

Part IV
Notice of Proposed
Rulemaking
Use of Actuarial Tables in
Valuing Annuities, Interests
for Life or a Term of
Years, and Remainder or
Reversionary Interests
REG-122770-18
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking.
SUMMARY: This document contains
proposed regulations relating to the use of
actuarial tables in valuing annuities, interests for life or a term of years, and remainder or reversionary interests. These regulations will affect the valuation of inter
vivos and testamentary transfers of interests dependent on one or more measuring
lives. These regulations are necessary because applicable law requires the actuarial tables to be updated to reflect the most
recent mortality experience available.
DATES: Written or electronic comments
and requests for a public hearing must be
received by July 5, 2022. Requests for a
public hearing must be submitted as prescribed in the “Comments and Requests
for a Public Hearing” section.
ADDRESSES: Commenters are strongly
encouraged to submit public comments
electronically. Submit electronic submissions via the Federal eRulemaking Portal
at www.regulations.gov (indicate IRS and
REG-122770-18) by following the online
instructions for submitting comments.
Once submitted to the Federal eRulemaking Portal, comments cannot be edited
or withdrawn. The IRS expects to have
limited personnel available to process
public comments that are submitted on
paper through mail. Until further notice,
any comments submitted on paper will
be considered to the extent practicable.

May 23, 2022

The Department of the Treasury (Treasury Department) and the IRS will publish for public availability any comment
submitted electronically, and to the extent
practicable on paper, to its public docket.
Send paper submissions to: CC:PA:LPD:PR (REG-122770-18), room 5203,
Internal Revenue Service, PO Box 7604,
Ben Franklin Station, Washington, D.C.
20044.
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Mayer R. Samuels of the Office of
Associate Chief Counsel (Passthroughs
and Special Industries), (202) 317-6859;
concerning the submission of comments
or requests for a public hearing, Regina
L. Johnson, (202) 317-5177 (not toll-free
numbers).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments
to the Income Tax Regulations (26 CFR
part 1), the Estate Tax Regulations (26
CFR part 20), and the Gift Tax Regulations (26 CFR part 25) to reflect revisions
to certain tables used for the valuation of
interests in property under section 7520 of
the Internal Revenue Code of 1986 (Code)
to reflect the most recent mortality experience available.
In General
Section 7520, effective for transfers
for which the valuation date is on or after May 1, 1989, generally provides that
the value of an annuity, an interest for
life or a term of years, and a remainder or
reversionary interest is to be determined
under tables published by the Secretary of
the Treasury or her delegate (Secretary)
by using an interest rate (rounded to the
nearest two-tenths of one 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
a charitable contribution is allowable for
any part of the property transferred, the
taxpayer may elect under section 7520(a)

1104

to use such Federal midterm rate for either
of the two months preceding the month
in which the valuation date falls. Section
7520(c)(2), as it existed on May 1, 1989,
directed the Secretary to issue tables not
later than December 31, 1989, utilizing
the then most recent mortality experience.
Thereafter, the Secretary is directed to revise these tables 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.
These proposed regulations contain
Table 2010CM that is based on data compiled from the 2010 census. For transfers
for which the valuation date is on or after
the applicability date of the Treasury decision adopting these regulations as final
regulations (published as the final rule
in the Federal Register), the appropriate
actuarial factors based on Table 2010CM
may be computed by taxpayers. However,
for the convenience of taxpayers, actuarial
factors may be found on IRS websites and
publications referenced in these proposed
regulations. These proposed regulations
also make conforming amendments to
various sections of the existing regulations to provide the references to these
revised actuarial factors. The updated actuarial tables will be available beginning
May 5, 2022, at no charge, electronically via the IRS website at https://www.irs.
gov/retirement-plans/actuarial-tables.
IRS Publications 1457 “Actuarial Valuations Version 4A” (forthcoming 2022),
1458 “Actuarial Valuations Version 4B”
(forthcoming 2022), and 1459 “Actuarial Valuations Version 4C” (forthcoming
2022) will provide additional references
and explanations to the actuarial tables
that are published on the IRS website.
These publications will be available after the applicability date of the Treasury
decision adopting these regulations as final regulations. Table S (Single Life Remainder Factors) and Table U(1) (Unitrust
Single Life Remainder Factors), which
are referenced and explained in Publications 1457 and 1458, respectively, will no
longer be published in these regulations.
Furthermore, the current Table S and Table U(1), effective for transfers for which
the valuation date is after April 30, 2009,

Bulletin No. 2022–21

and before the applicability date of the
Treasury decision adopting these regulations as final regulations is published in
the Federal Register, will be moved to
sections containing actuarial material for
historical reference. Table B, Table D, Tables F(0.2) through F(20.0), Table J, and

Table K, which are not based on mortality
experience, are not changed.
The following chart summarizes the
applicable interest rates and the citations
to textual materials and tables for the various periods covered under the current
regulations. For purposes of this chart,

“DPAD” is the day prior to the applicability date of the Treasury decision adopting
these regulations as final regulations and
“AD” is the applicability date of the Treasury decision adopting these regulations
as final regulations.

Cross Reference to Regulation Sections
Valuation
Period

Interest
Rate

Regulation
Section

Table

Section 642:
Valuation, in general
before 01/01/52
01/01/52 - 12/31/70
01/01/71 - 11/30/83
12/01/83 - 04/30/89
05/01/89 - 04/30/99
05/01/99 - 04/30/09
05/01/09 – DPAD
on or after AD

4%
3.5%
6%
10%
7520
7520
7520
7520

1.642(c)-6
1.642(c)-6A(a)
1.642(c)-6A(b)
1.642(c)-6A(c)
1.642(c)-6A(d)
1.642(c)-6A(e)
1.642(c)-6A(f)
1.642(c)-6A(g)
1.642(c)-6(e)

Table G
Table S (5/1/89 - 4/30/99)
Table S (5/1/99 - 4/30/09)
Table S (5/1/09- DPAD)
Table S (on or after AD)

Section 664:
Valuation, in general
1.664-4
before 01/01/52
4%
1.664-4A(a)
01/01/52 - 12/31/70
3.5%
1.664-4A(b)
01/01/71 - 11/30/83
6%
1.664-4A(c)
12/01/83 - 04/30/89
10%
1.664-4A(d)
05/01/89 - 04/30/99
7520
1.664-4A(e)
05/01/99 - 04/30/09
7520
1.664-4A(f)
05/01/09 - DPAD
7520
1.664-4A(g)
on or after AD
7520
1.664-4(e)

Table E, Table F(1)
Table U(1) (5/1/89 - 4/30/99)
Table U(1) (5/1/99 - 4/30/09)
Table U(1) (5/1/09-DPAD)
Table U(1) (on or after AD), Table D, and Table F
See Pub. 1458, ver. 4A

Section 2031:
Valuation, in general
20.2031-7
before 01/01/52
4%
20.2031-7A(a)
01/01/52 - 12/31/70
3.5%
20.2031-7A(b)
01/01/71 - 11/30/83
6%
20.2031-7A(c)
12/01/83 - 04/30/89
10%
20.2031-7A(d)
05/01/89 - 04/30/99
7520
20.2031-7A(e)

05/01/99 - 04/30/09
7520
20.2031-7A(f)

05/01/09 - DPAD
7520
20.2031-7A(g)

on or after AD
7520
20.2031-7(d)

Table A, Table B, Table LN
Table S (5/1/89 - 4/30/99)
Table 80CNSMT
Table S (5/1/99 - 4/30/09)
Table 90CM
Table S (5/1/09 - DPAD)
Table 2000CM
Table S (on or after AD)
Table 2010CM
Table B, Table J, Table K
see Pub. 1457, ver. 4A

Bulletin No. 2022–21

1105

May 23, 2022

Section 2512:
Valuation, in general
before 01/01/52
01/01/52 - 12/31/70
01/01/71 - 11/30/83
12/01/83 - 04/30/89
05/01/89 - 04/30/99
05/01/99 - 04/30/09
05/01/09 - DPAD
on or after AD

4%
3.5%
6%
10%
7520
7520
7520
7520

Applicability Dates
These regulations are proposed to be
applicable in the case of annuities, interests for life or a term of years, and remainder or reversionary interests that are
valued as of a date on or after the first day
of the month following the date on which
the Treasury decision adopting these regulations as final regulations is published in
the Federal Register.
Transitional Rules
The regulations provide certain rules
to facilitate the transition to the new actuarial tables. For gift tax purposes, if the
date of a transfer is on or after January 1,
2021, and before the applicability date of
the Treasury decision adopting these regulations as final regulations, the donor may
choose to determine the value of the gift
(and/or any applicable charitable deduction) under tables based on either Table
2000CM or Table 2010CM. Similarly,
for estate tax purposes, if the decedent
dies on or after January 1, 2021, and before the applicability date of the Treasury
decision adopting these regulations as final regulations, the value of any interest
(and/or any applicable charitable deduction) may be determined in the discretion
of the decedent’s executor under tables
based on either Table 2000CM or Table
2010CM, provided that the decedent’s executor must use the same mortality table
to value all interests in the same property.
However, the section 7520 interest rate to
be utilized is the appropriate rate for the
month in which the valuation date occurs,
subject to the following special rule for
certain charitable transfers. Specifically,
in accordance with this transitional rule
and the rules contained in §§1.7520‑2(a)
(2), 20.7520‑2(a)(2), and 25.7520-2(a)

May 23, 2022

25.2512-5
25.2512-5A(a)
25.2512-5A(b)
25.2512-5A(c)
25.2512-5A(d)
25.2512-5A(e)
25.2512-5A(f)
25.2512-5A(g)
25.2512-5(d)
(2), in cases involving a charitable deduction, if the valuation date occurs on or
after January 1, 2021, but before the applicability date of the Treasury decision
adopting these regulations as final regulations, and the executor or donor elects
under section 7520(a) to use the section
7520 interest rate for a month that is prior
to January 1, 2021, then the mortality experience contained in Table 2000CM must
be used. If the executor or donor uses the
section 7520 interest rate for a month that
is on or after January 1, 2021, but before
the applicability date of the Treasury decision adopting these regulations as final
regulations, then the tables based on either
Table 2000CM or Table 2010CM may be
used. However, if the valuation date occurs on or after the applicability date of
the Treasury decision adopting these regulations as final regulations, the executor or
donor must use the new mortality experience contained in Table 2010CM even if
the use of a prior month’s interest rate is
elected under section 7520(a).
In addition, the regulations no longer
will provide that the estate of a decedent
who was under a mental disability that
prevented a change in the disposition of
the decedent’s property may elect to value
the property interest included in the gross
estate either under the mortality table and
interest rate in effect at the time the decedent first became subject to the mental disability or under the mortality table and interest rate in effect on the decedent’s date
of death. The taxpayer decedent, during
life and before the advent of the mental
disability, would not know, beforehand,
what the market interest rate would be at
his or her future date of death, but can reasonably be expected to have understood
that the property interest would be valued
at the then-applicable market rate, whatever it might be. Becoming incapacitated

1106

should not alter the effect of that understanding. Therefore, a special rule permitting an election to use the interest rate
in effect at the time the decedent first became subject to the mental disability is not
necessary. The same is true with respect
to mortality rates. Accordingly, estates of
decedents with a mental disability who die
after the applicability date of the Treasury
decision adopting these regulations as final regulations will be required to use the
mortality table and interest rate in effect
on the decedent’s date of death or the alternate valuation date under section 2032,
if elected.
Special Analyses
These proposed regulations are not
subject to review under section 6(b) of
Executive Order 12866 pursuant to the
Memorandum of Agreement (April 11,
2018) between the Treasury Department
and the Office of Management and Budget (OMB) regarding review of tax regulations. Therefore, a regulatory impact
assessment is not required.
Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby
certified that this proposed rule will not
have a significant economic impact on a
substantial number of small entities. This
document proposes to implement statutorily required periodic updates to actuarial
tables used in valuing various interests in
property that are affected by a person’s
life expectancy. The updates would not
impose any direct compliance requirements on any entities other than the time
to read and understand the proposed updates. Notwithstanding this certification,
the Treasury Department and the IRS invite comment on the impact this proposed
rule would have on small entities.

Bulletin No. 2022–21

The Treasury Department and the IRS
have assessed that the proposed regulations do not establish a new collection
of information nor modify an existing
collection that requires the approval of
the Office of Management and Budget
under the Paperwork Reduction Act (44
U.S.C. chapter 35). The Treasury Department and the IRS seek comments on this
assessment.
Pursuant to section 7805(f), this notice
of proposed rulemaking has been submitted to the Chief Counsel for the Office of
Advocacy of the Small Business Administration for comment on its impact on small
business.
Statement of Availability of IRS
Documents
IRS Revenue Procedures, Revenue
Rulings, Notices, and other guidance cited in this preamble are published in the
Internal Revenue Bulletin (or Cumulative
Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC
20402, or by visiting the IRS website at
https://www.irs.gov.
Comments and Requests for Public
Hearing
The Treasury Department and the IRS
request comments on all aspects of the
proposed rules.
Before these proposed amendments to
the regulations are adopted as final regulations, consideration will be given to
comments that are submitted timely to the
IRS as prescribed in the preamble under
the ADDRESSES section. Any electronic comments submitted, and to the extent
practicable any paper comments submitted, will be made available at www.regulations.gov or upon request.
A public hearing will be scheduled if
requested in writing by any person who
timely submits electronic or written comments. Requests for a public hearing also
are encouraged to be made electronically.
If a public hearing is scheduled, notice of
the date and time for the public hearing
will be published in the Federal Register.
Announcement 2020-4, 2020-17 I.R.B 1,
provides that, until further notice, public
hearings conducted by the IRS will be

Bulletin No. 2022–21

held telephonically. Any telephonic hearing will be made accessible to people with
disabilities.
Drafting Information
The principal author of these regulations is Mayer R. Samuels, Office of the
Associate Chief Counsel (Passthroughs
and Special Industries), IRS. However,
other personnel from the IRS and Treasury Department participated in their
development.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
26 CFR Part 20
Estate taxes, Reporting and recordkeeping requirements.
26 CFR Part 25
Gift taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the
Regulations
Accordingly, 26 CFR parts 1, 20, and
25 are proposed to be amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.170A-12 is amended
by:
1. Revising paragraphs (b)(2) and (3).
2. Adding paragraph (b)(4).
3. Revising paragraphs (e)(2) and (f)
The revisions and addition read as
follows:
§1.170A-12 Valuation of a remainder
interest in real property for contributions
made after July 31, 1969.
*****
(b) * * *

1107

(2) Computation of depreciation factor.
If the valuation of the remainder interest
in depreciable property is dependent upon
the continuation of one life, a special factor must be used. The factor determined
under this paragraph (b)(2) is carried to
the fifth decimal place. The special factor
is to be computed on the basis of the interest rate and life contingency rates from the
mortality table prescribed in §20.2031-7
of this chapter (or for periods before [applicability date of the Treasury decision
adopting these regulations as final regulations], §20.2031‑7A of this chapter)
and on the assumption that the property
depreciates on a straight-line basis over
its estimated useful life. For transfers for
which the valuation date is on or after [applicability date of the Treasury decision
adopting these regulations as final regulations], special factors for determining
the present value of a remainder interest
following one life may be computed by
taxpayers based on Table 2010CM, found
in §20.2031-7(d)(7)(ii) of this chapter,
and using the formula provided in this
paragraph (b)(2). Alternatively, taxpayers
may use the actuarial factors provided in
Table C to determine the special factor
for the remainder interest following one
life. Table C will be available beginning
May 5, 2022, at no charge, electronically via the IRS website at https://www.irs.
gov/retirement-plans/actuarial-tables (or
a corresponding URL as may be updated
from time to time). IRS Publication 1459,
“Actuarial Valuations Version 4C” (2022),
references and explains Table C and provides examples describing the computation. This publication will be available
after [date of publication of the final rule
in the Federal Register]. For transfers
for which the valuation date is on or after May 1, 2009, and before [applicability date of the Treasury decision adopting
these regulations as final regulations],
special factors for determining the present
value of a remainder interest following
one life and an example describing the
computation are contained in the previous version of Table C, which is currently
available, at no charge, electronically via
the IRS website at https://www.irs.gov/
retirement-plans/actuarial-tables.
IRS
Publication 1459, “Actuarial Valuations
Version 3C” (2009), references and explains this version of Table C and provides

May 23, 2022

examples describing the computation.
See, however, §1.7520-3(b) (relating to
exceptions to the use of prescribed tables
under certain circumstances). Otherwise,
in the case of the valuation of a remainder interest following one life, the special
factor may be obtained through use of the
formula in Figure 1 to this paragraph (b)

(2). The prescribed mortality table is Table
2010CM as set forth in §20.2031‑7(d)(7)
(ii) of this chapter, or for periods before
[applicability date of the Treasury decision adopting these regulations as final
regulations], the appropriate table found
in §20.2031-7A of this chapter. Table
2010CM is referenced by IRS Publication

1459, “Actuarial Values Version 4C.” The
mortality tables prescribed for periods
before [applicability date of the Treasury
decision adopting these regulations as final regulations] are referenced by prior
versions of IRS Publication 1459.

Figure 1 to paragraph (b)(2) – Formula for determining single life remainder interest in depreciable property

(3) Sample factors from actuarial Table S. The present value of a remainder interest

(3) Sample factors from actuarial Ta- chapter to derive factors from the appro- IRS website at https://www.irs.gov/retireble S. The present value of a remainder priate mortality table. For the convenience ment‑plans/actuarial-tables. For purposes
dependent on the termination of one life is determined by using the formula in §20.2031interest dependent on the termination of of taxpayers, actuarial factors have been of the example in paragraph (b)(4) of this
one life is determined by using the for- computed by IRS and appear in Table S. section, the following factors from Table
of this chapter
to derive
factorsTable
fromS the
table.
The complete
can appropriate
be found on themortality
mula 7(d)(2)(ii)(B)
in §20.2031-7(d)(2)(ii)(B)
of this
S will be
used: For the

taxpayers, actuarial factors have been computed by IRS and appear in Table S.
Tableconvenience
1 to paragraphof
(b)(3)
The complete Table S can be found
theTable
IRS Swebsite
at Table 2010CM
Factorson
from
- Based on
Interest at 3.2 Percent

purposes of the example
in paragraph
Age https://www.irs.gov/retirement-plans/actuarial-tables.
Annuity
LifeFor
Estate
Remainder
62

14.6131

0.46762

(b)(4) of this section, the following factors from Table S will be used:

0.53238

of 28 years ($10,000)). The portion of the propercomputed under the formula described in paragraph
(4) Example. After [applicability date of the
Table
1 adopting
to paragraph
(b)(3)
ty considered to be nondepreciable is $40,000 (the (b)(2) of this section and is 0.19392. (This factor,
Treasury
decision
these regulations
as final
value of the land at the time of the gift ($30,000)
0.19392, may instead be determined by using Table
regulations], A, who is 62, donates to Y University a
remainder interest in a personal residence, consisting plus the expected value of the house at the end of 28 C, which can be found on the IRS website at https://
Factors
Table SAt- the
Based
years ($10,000)).
time ofon
theTable
gift, the 2010CM
interwww.irs.gov/retirement-plans/actuarial-tables, and
of a house and land, subject to a reserved life
estate from
est rateInterest
prescribed under
section
7520 is 3.2 percent.
following the method provided in IRS Publication
in A. At the time of the gift, the land has a value
at 3.2
Percent
Based on an interest rate of 3.2 percent, the remain1459, “Actuarial Values Version 4C”.) The value
of $30,000 and the house has a value of $100,000
Age
Annuity
Life Estate
Remainder
with an estimated useful life of 28 years, at the end der factor for $1.00 prescribed in §20.2031-7(d) and of the depreciable remainder interest is $17,452.80
62period the value of the house is expected
14.6131found in Table S for a person
0.46762
0.53238
age 62 is 0.53238.
(0.19392
times $90,000). Therefore, the value of the
of which
The value of the nondepreciable remainder interest
remainder interest is $38,748.00 ($21,295.20 plus
to be $10,000. The portion of the property consid$17,452.80).
ered to be depreciable is $90,000 (the value of the is $21,295.20 (0.53238 times $40,000). The factor
Example.
After
dateinterest
of the
Treasuryproperty
decision
for the remainder
in depreciable
is *adopting
house ($100,000) (4)
less its
expected value
at the [applicability
end
* * * * these

regulations as final regulations], A, who is 62, donates to Y University a remainder interest in a
May 23, 2022
1108
Bulletin No. 2022–21
personal residence, consisting of a house and land, subject to a reserved life estate in A. At the

(e) * * *
(2) In the case of the valuation of a remainder interest following two lives, the
special factor may be obtained through use
of the formula in Figure 2 to this paragraph
(e)(2). The prescribed mortality table is Table

2010CM as set forth in §20.2031-7(d)(7)(ii)
of this chapter, or for periods before [applicability date of the Treasury decision adopting these regulations as final regulations],
the appropriate table found in §20.2031-7A
of this chapter. Table 2010CM is referenced

by IRS Publication 1459, “Actuarial Values
Version 4C.” The mortality tables prescribed
for periods before [applicability date of the
Treasury decision adopting these regulations as final regulations] are referenced by
prior versions of IRS Publication 1459.

Figure 2 to paragraph (e)(2)(i) – Formula for determining two-life remainder interest in depreciable property

adding “paragraph (h)(4)(vii) of this sec- §20.2031-7A(d)(6) of this chapter. Accordingly, the
* * * ** ** * * *
value of the remainder interest, and thus the amount
(f) Applicability date. This section ap- tion (Example 7)” in its place.
eligible for an income tax deduction under section
7. In newly designated paragraph (h) 170(f), is $55,996 ($200,000 × 0.27998).
plies to contributions made after July 31,
(f)
Applicability
date.
This
section
applies
to
contributions
made
after July 31, 1969,
1969, except that paragraphs (b)(2), (3), (4)(xi) by removing “example (10)” and * * * * *
and (4) and (e)(2) of this section apply to adding “paragraph (h)(4)(x) of this section
dates. Except as otherexcept that
paragraphs
and (4)10)”
andin(e)(2)
of this section apply (j)
toApplicability
all contributions
its place.
all contributions
made
on or after (b)(2),
[applica-(3),(Example
wise provided in paragraph (g)(4)(ii) and
8. By revising paragraph (j).
bility date of the Treasury decision adoptparagraph (i) of this section, this section
revisions
read as
follows: adopting these
ing these
regulations
as final
regulations]. date The
made
on or after
[applicability
of the
Treasury
decision
as final made on or
appliesregulations
only to contributions
Par. 3. Section 1.170A-14 is amended:
after December 18, 1980. Paragraph (h)
1. regulations].
In paragraph (h)(4) by designating §1.170A-14 Qualified conservation
(4)(ii) of this section applies on and after
Example 1 through 12 as paragraphs (h) contributions.
[applicability date of the Treasury deci(4)(i) through (xii), respectively.
sion adopting these regulations as final
Par.newly
3. Section
1.170A-14
2. By revising
designated
para- * *is*amended:
**
regulations].
(h) * * *
graph (h)(4)(ii).
Par. 4. Section 1.642(c)-6 is amended
3. In newly1.designated
paragraphs
(h)by designating
(4) * * * Example 1 through 12 asby:
In paragraph
(h)(4)
paragraphs (h)(4)(i)
(ii) Example 2. In 1984 B, who is 62, donates a
(4)(iii) and (iv) by removing “Example 2”
1. Revising paragraph (d).
remainder
interest in Greenacre to a qualifying orand adding
“paragraph
(h)(4)(ii) of this
through
(xii), respectively.
2. Redesignating paragraph (e) as paraganization for conservation purposes. Greenacre is
section (Example 2)” in its place.
a tract of 200 acres of undeveloped woodland that is graph (g) of §1.642(c)-6A.
4. In newly designated paragraph (h) valued at $200,000 at its highest and best use. Under
3. Adding new paragraph (e) and revis2. By
revising
paragraph (h)(4)(ii).
(4)(v) by removing
“Example
4”newly
and add-designated
§1.170A-12(b), the value of a remainder interest in
ing paragraph (f).
ing “paragraph (h)(4)(iv) of this section real property following one life is determined under
The revisions and addition read as
§25.2512-5 of (h)(4)(iii)
this chapter (Gift
Regulations).
3.itsInplace.
newly designated paragraphs
andTax(iv)
by removing “Example 2” and
(Example 4)” in
(See §25.2512‑5A of this chapter with respect to the follows:
5. In newly designated paragraph (h)(4) valuation of annuities, interests for life or a term of
(vi) by
removing
“Example 2”
and adding
years,
and remainder
or reversionary
transadding
“paragraph
(h)(4)(ii)
of this
section
(Example
2)” ininterests
its place.
§1.642(c)-6 Valuation of a remainder
“paragraph (h)(2)(ii) of this section (Ex- ferred before [applicability date of the Treasury deci- interest in property transferred to a
sion adopting these regulations as final regulations].)
ample 2)” in its place.
pooled4”income
fund.
4.
In
newly
designated
paragraph
(h)(4)(v) by removing “Example
and adding
6. In newly designated paragraph (h) For transfers occurring after November 30, 1983, and
before May 1, 1989, the single life remainder fac(4)(viii) by removing “Example 7” and tors, valued at 10 percent, can be found in Table A of * * * * *

“paragraph (h)(4)(iv) of this section (Example 4)” in its place.

Bulletin No.
1109
5. 2022–21
In newly designated paragraph (h)(4)(vi)
by removing “Example 2” and addingMay 23, 2022

(d) Valuation. The present value of
the remainder interest in property transferred to a pooled income fund on or after
[applicability date of the Treasury decision adopting these regulations as final

regulations], is determined under paragraph (e) of this section. The present value
of the remainder interest in property transferred to a pooled income fund for which
the valuation date is before [applicability

date of the Treasury decision adopting
these regulations as final regulations] is
determined under the following sections:

Table 6 to paragraph (d)
Valuation Dates
After
12-31-51
12-31-70
11-30-83
04-30-89
04-30-99
04-30-09

Applicable Regulations
Before
01-01-52
01-01-71
12-01-83
05-01-89
05-01-99
05-01-09
AD

1.642(c)-6A(a)
1.642(c)-6A(b)
1.642(c)-6A(c)
1.642(c)-6A(d)
1.642(c)-6A(e)
1.642(c)-6A(f)
1.642(c)-6A(g)

AD = [applicability date of the Treasury decision adopting these regulations as final regulations].
(e) Present value of the remainder interest in the case of transfers to pooled
income funds for which the valuation
date is on or after [applicability date
of the Treasury decision adopting these
regulations as final regulations]--(1) In
general. In the case of transfers to pooled
income funds for which the valuation
date is on or after [applicability date of
the Treasury decision adopting these regulations as final regulations], the present
value of a remainder interest is determined under this section. See, however,
§1.7520-3(b) (relating to exceptions to
the use of prescribed tables under certain
circumstances). The present value of a
remainder interest that is dependent on
the termination of the life of one individual is computed by using the formula in
§20.2031-7(d)(2)(ii)(B) of this chapter
to derive factors from the appropriate
mortality table. For the convenience of
taxpayers, actuarial factors have been
computed by IRS and appear in Table S.
Table S will be available beginning May
5, 2022, at no charge, electronically via
the IRS website at https://www.irs.gov/
retirement-plans/actuarial-tables (or a
corresponding URL as may be updated from time to time). Table S is referenced and explained by IRS Publication 1457 “Actuarial Valuations Version
4A,” which will be available after [date
of publication of the final rule in the
Federal Register]. For purposes of the

May 23, 2022

computations under this section, the age
of an individual is the age at the individual’s nearest birthday.
(2) Transitional rule for valuation of
transfers to pooled income funds. For purposes of section 170, 2055, 2106, 2522, or
2624, in the case of transfers to a pooled
income fund for which the valuation date
is on or after January 1, 2021, and before
[applicability date of the Treasury decision
adopting these regulations as final regulations], the present value of the remainder
interest under this section is determined
by using the section 7520 interest rate for
the month in which the valuation date occurs (see §§1.7520-1(b) and 1.7520-2(a)
(2)) and the appropriate actuarial factors
derived from the selected mortality table,
either Table 2010CM in § 20.2031-7(d)
(7)(ii) of this chapter or Table 2000CM
in §20.2031-7A(g)(4) of this chapter, at
the option of the donor or the decedent’s
executor, as the case may be. For the convenience of taxpayers, actuarial factors
based on Table 2010CM appear in the
proposed version of Table S, and actuarial
factors based on Table 2000CM appear in
the current version of Table S, which will
be available beginning May 5, 2022, at no
charge, electronically via the IRS website
at https://www.irs.gov/retirement-plans/
actuarial-tables (or a corresponding URL
as may be updated from time to time). The
donor or decedent’s executor must consistently use the same mortality basis with

1110

respect to each interest (income, remainder, partial, etc.) in the same property, and
with respect to all transfers occurring on
the valuation date. For example, gift and
income tax charitable deductions with
respect to the same transfer must be determined based on factors with the same
mortality basis, and all assets includible
in the gross estate and/or estate tax deductions claimed must be valued based on
factors with the same mortality basis.
(3) Present value of a remainder interest. The present value of a remainder interest in property transferred to a pooled
income fund is computed on the basis of-(i) Life contingencies determined from
the values of lx that are set forth in Table
2010CM in §20.2031-7(d)(7)(ii) of this
chapter (see §20.2031-7A of this chapter
for certain prior periods); and
(ii) Discount at a rate of interest, compounded annually, equal to the highest
yearly rate of return of the pooled income
fund for the three taxable years immediately preceding its taxable year in which
the transfer of property to the fund is
made. For purposes of this paragraph
(e), the yearly rate of return of a pooled
income fund is determined as provided
in paragraph (c) of this section unless the
highest rate of return is deemed to be the
rate described in paragraph (e)(4) of this
section for funds in existence less than 3
taxable years. For purposes of this paragraph (e)(3)(ii), the first taxable year of a

Bulletin No. 2022–21

pooled income fund is considered a taxable year even though the taxable year
consists of less than 12 months. However, appropriate adjustments must be made
to annualize the rate of return earned by
the fund for that period. Where it appears
from the facts and circumstances that the
highest yearly rate of return of the fund for
the three taxable years immediately preceding the taxable year in which the transfer of property is made has been purposely
manipulated to be substantially less than
the rate of return that otherwise would be
reasonably anticipated with the purpose of
obtaining an excessive charitable deduction, that rate of return may not be used.
In that case, the highest yearly rate of return of the fund is determined by treating
the fund as a pooled income fund that has
been in existence for less than three preceding taxable years.
(4) Pooled income funds in existence
less than three taxable years. If a pooled
income fund has been in existence less than
three taxable years immediately preceding
the taxable year in which the transfer is
made to the fund and the transfer to the
fund is made on or after May 1, 1989, the
highest rate of return is deemed to be the
interest rate (rounded to the nearest twotenths of one percent) that is one percent
less than the highest annual average of the
monthly section 7520 rates for the three
calendar years immediately preceding the

calendar year in which the transfer to the
pooled income fund is made. The deemed
rate of return for transfers to new pooled
income funds is recomputed each calendar year using the monthly section 7520
rates for the three year period immediately
preceding the calendar year in which each
transfer to the fund is made until the fund
has been in existence for three taxable
years and can compute its highest rate of
return for the three taxable years immediately preceding the taxable year in which
the transfer of property to the fund is made
in accordance with the rules set forth in
the first sentence of paragraph (e)(3)(ii) of
this section.
(5) Computation of value of remainder
interest--(i) Factor. The factor that is used
in determining the present value of a remainder interest that is dependent on the
termination of the life of one individual
is the factor obtained through use of the
formula in §20.2031-7(d)(2)(ii)(B) of this
chapter to derive factors from the appropriate mortality table. For the convenience
of taxpayers, actuarial factors have been
computed by IRS and appear in Table S.
Table S will be available beginning May
5, 2022, at no charge, electronically via
the IRS website at https://www.irs.gov/
retirement-plans/actuarial-tables. Table S
is referenced and explained in IRS Publication 1457 “Actuarial Valuations Version
4A,” which will be available after [date of

publication of the final rule in the Federal
Register]. In using the section of Table S
for the interest rate equal to the appropriate yearly rate of return, the appropriate
remainder factor is opposite the number
that corresponds to the age of the individual upon whose life the value of the remainder interest is based (See §1.642(c)6A for certain prior periods). The tables
referenced by IRS Publication 1457 “Actuarial Valuations Version 4A” include
factors for yearly rates of return from 0.2
to 20 percent, inclusive, in increments of
two-tenths of one percent. For other situations, see paragraph (b) of this section.
If the yearly rate of return is a percentage
that is between the yearly rates of return
for which factors are provided by Table S,
an exact method of obtaining the applicable factors (such as through software using the actual rate of return and the actuarial formulas provided in §20.2031-7(d)(2)
(ii)(B) of this chapter) or a linear interpolation must be used, provided whichever
method used is applied consistently. The
present value of the remainder interest is
determined by multiplying the fair market
value of the property on the valuation date
by the appropriate remainder factor.
(ii) Sample factors from actuarial Table S. For purposes of the example in paragraph (e)(5)(iii) of this section, the following factors from Table S will be used:

Table 7 to paragraph (e)(5)(ii)

Age
55
Age
55

Factors from Table S - Based on Table 2010CM
Interest at 5.4 Percent
Annuity
Life Estate
13.2515
0.71558
Interest at 5.6 Percent
Annuity
Life Estate
12.9710
0.72637

(iii) Example of interpolation. After [applicability date of the Treasury decision adopting these regulations as final regulations], A, whose age is 54 years
and 8 months, transfers $100,000 to a pooled income

Bulletin No. 2022–21

fund, and retains a life income interest in the property. The highest yearly rate of return earned by the
fund for its 3 preceding taxable years is 5.43 percent.
In Table S, the remainder factor opposite 55 years

1111

Remainder
0.28442
Remainder
0.27363

under 5.4 percent is 0.28442 and under 5.6 percent is
0.27363. The present value of the remainder interest
is $28,280, computed as illustrated in Figure 1 to this
paragraph (e)(5)(iii).

May 23, 2022

Figure 1 to paragraph (e)(5)(iii) – Illustration of interpolation method

(6) Actuarial tables. In the case of transfers for which the valuation date is on or after
Par. 5. The undesignated center head(g) Present value of the remainder in(6) Actuarial tables. In the case of
[applicability
date
of the Treasury
decision
adopting
these§1.642(c)-6A
regulations as
final
the to pooled
immediately
preceding
terest
in regulations],
the case of transfers
transfers
for which the
valuation
date is ing
income funds for which the valuation date
on or after [applicability date of the Trea- is revised to read as follows:
IncomeonFund
Tables
is onlife
or after
May
1, 2009,
sury present
decision value
adopting
regulations
of these
a remainder
interestPooled
dependent
the Actuarial
termination
of one
in the
case
of a and before [apas final regulations], the present value of a Applicable Before [Applicability Date of plicability date of the Treasury decision
remainder interest dependent on the termi- the Treasury Decision Adopting These adopting these regulations as final regulatransfer to a pooled income fund is determined by using the formula in §20.2031-7(d)(2)(ii)(B)
tions]--(1) In general. In the case of transnation of one life in the case of a transfer to Regulations as Final Regulations]
Par. 6. Section 1.642(c)-6A is amended fers to pooled income funds for which the
a pooled income fund is determined by usofformula
this chapter
to derive factors from
the convenience
of May 1, 2009,
by: the appropriate mortality table. For
valuation
date is on or after
ing the
in §20.2031-7(d)(2)(ii)(B)
1. Revising the section heading.
and before [applicability date of the Treaof this chapter to derive factors from the
2. In
newly redesignated
paragraph
(g):in Table
sury decision
adopting
appropriate
mortality
table. For
the convetaxpayers,
actuarial
factors
have been
computed
by IRS and
appear
S. Table
S willthese
be regulations
i. The heading and paragraphs (g)(1) as final regulations], the present value of
nience of taxpayers, actuarial factors have
(5) and electronically
(g)(6) introductory
a remainder
is determined under
been available
computed by
IRS and appear
in 2022,
Ta- through
beginning
May 5,
at no charge,
via text
the IRS
website interest
at
ble S. Table S will be available beginning are revised.
this section. See, however, §1.7520‑3(b)
ii. Paragraph (g)(7) is added.
May 5, 2022, at no charge, electronically
(relating to exceptions to the use of prehttps://www.irs.gov/retirement-plans/actuarial-tables.
Table Sread
is referenced
explained
in circumstancThe revisions and addition
as scribedand
via the
IRS website at https://www.irs.gov/
tables
under certain
retirement-plans/actuarial-tables. Table S follows:
es). The present value of a remainder inIRS Publication
1457
"Actuarial
available
after [date
is referenced
and explained
in IRS
Publi- Valuations Version 4A,” which will be
terest
that is dependent
on of
the termination
cation 1457 “Actuarial Valuations Version §1.642(c)-6A Valuation of charitable
of the life of one individual is computed
for which the
4A,” publication
which will be of
available
afterrule
[dateinoftheremainder
by the use of Table S in paragraph (g)(6)
the final
Federal interests
Register].
publication of the final rule in the Federal valuation date is before [applicability
of this section. For purposes of the comdate of the Treasury decision adopting
Register].
putations under this section, the age of an
(f) Applicability date. This section applies on and after [applicability
date of the
(f) Applicability date. This section ap- these regulations as final regulations].
individual is the age at the individual’s
plies on and after [applicability date of the
nearest birthday.
Treasury
decision
these *regulations
as final regulations].
****
Treasury
decision
adoptingadopting
these regula(2) Transitional rules for valuation of
tions as final regulations].
transfers to pooled income funds. (i) For

Par. 5. The undesignated center heading immediately preceding §1.642(c)-6A is revised

May 23, 2022
to read as follows:

1112

Bulletin No. 2022–21

purposes of section 2055, 2106, or 2624, if
on May 1, 2009, the decedent was under a
mental disability so that the disposition of
the property could not be changed, and the
decedent died on or after May 1, 2009, but
before [applicability date of the Treasury
decision adopting these regulations as final regulations] without having regained
the ability to dispose of the decedent’s
property, or if the decedent died within 90
days of the date that the decedent first regained that ability on or after May 1, 2009,
but before [applicability date of the Treasury decision adopting these regulations
as final regulations], the present value of
a remainder interest is determined as if the
valuation date with respect to the decedent’s gross estate is either before May 1,
2009, or after April 30, 2009, at the option
of the decedent’s executor.
(ii) For purposes of section 170, 2055,
2106, 2522, or 2624, in the case of transfers to a pooled income fund for which
the valuation date is on or after May 1,
2009, and before July 1, 2009, the present
value of the remainder interest under this
section is determined by using the section
7520 interest rate for the month in which
the valuation date occurs (see §§1.75201(b) and 1.7520-2(a)(2)) and the appropriate actuarial tables under either paragraph
(f)(6) or (g)(6) of this section, at the option
of the donor or the decedent’s executor, as
the case may be.
(iii) For purposes of paragraphs (g)(2)
(i) and (ii) of this section, where the donor
or decedent’s executor is given the option
to use the appropriate actuarial tables under either paragraph (f)(6) or (g)(6) of this
section, the donor or decedent’s executor
must consistently use the same mortality
basis with respect to each interest (income, remainder, partial, etc.) in the same
property, and with respect to all transfers
occurring on the valuation date. For example, gift and income tax charitable deductions with respect to the same transfer
must be determined based on factors with
the same mortality basis, and all assets includible in the gross estate and/or estate
tax deductions claimed must be valued
based on factors with the same mortality
basis.
(3) Present value of a remainder interest. The present value of a remainder interest in property transferred to a pooled
income fund is computed on the basis of --

Bulletin No. 2022–21

(i) Life contingencies determined from
the values of lx that are set forth in Table
2000CM in §20.2031-7A(g)(4) of this
chapter; and
(ii) Discount at a rate of interest, compounded annually, equal to the highest
yearly rate of return of the pooled income
fund for the three taxable years immediately preceding its taxable year in which
the transfer of property to the fund is
made. The provisions of §1.642(c)-6(c)
apply for determining the yearly rate of
return. However, where the taxable year
is less than 12 months, the provisions of
§1.642(c)-6(e)(3)(ii) apply for the determining the yearly rate of return.
(4) Pooled income funds in existence
less than three taxable years. The provisions of §1.642(c)-6(e)(4) apply for determining the highest yearly rate of return
when the pooled income fund has been in
existence less than three taxable years.
(5) Computation of value of remainder
interest. The factor that is used in determining the present value of a remainder
interest that is dependent on the termination of the life of one individual is the factor from Table S in paragraph (g)(6) of this
section under the appropriate yearly rate
of return opposite the number that corresponds to the age of the individual upon
whose life the value of the remainder interest is based. Table S in paragraph (g)(6)
of this section includes factors for yearly rates of return from 0.2 to 14 percent,
inclusive, in increments of two-tenths of
one percent. Actuarial factors that do not
appear in paragraph (g)(6) of this section may be computed directly by using
the formula in §20.2031-7(d)(2)(ii)(B)
of this chapter to derive factors from the
appropriate mortality table. For the convenience of taxpayers, actuarial factors
have been computed by IRS and appear in
Table S that is referenced and explained
by IRS Publication 1457, “Actuarial Valuations Version 3A” (2009). The table is
available at no charge, electronically via
the IRS website at https://www.irs.gov/
retirement-plans/actuarial-tables (or a
corresponding URL as may be updated
from time to time). For other situations,
see §1.642(c)-6(b). If the yearly rate of
return is a percentage that is between the
yearly rates of return for which factors are
provided by Table S, an exact method of
obtaining the applicable factors (such as

1113

through software using the actual rate of
return and actuarial formulas provided in
§20.2031-7(d)(2)(ii)(B) of this chapter) or
a linear interpolation must be used, provided whichever method used is applied
consistently. The present value of the remainder interest is determined by multiplying the fair market value of the property on the valuation date by the appropriate
remainder factor. For an example of a
computation of the present value of a remainder interest requiring a linear interpolation adjustment, see §1.642(c)-6(e)(5).
(6) Actuarial tables. In the case of
transfers for which the valuation date is on
or after May 1, 2009, and before [applicability date of the Treasury decision adopting these regulations as final regulations],
and without regard to the headings in the
tables in this paragraph (g)(6) that do not
contain this termination date for the applicability of the tables, the present value of a
remainder interest dependent on the termination of one life in the case of a transfer
to a pooled income fund is determined by
using the following tables:
*****
(7) Applicability dates. Paragraphs (g)
(1) through (6) of this section apply on and
after May 1, 2009, and before [applicability date of the Treasury decision adopting
these regulations as final regulations].
Par. 7. Section 1.664-2 is amended by
revising paragraphs (c) and (e) as follows:
§1.664-2 Charitable remainder annuity
trust.
*****
(c) Calculation of the fair market value
of the remainder interest of a charitable
remainder annuity trust. For purposes of
sections 170, 2055, 2106, and 2522, the
fair market value of the remainder interest of a charitable remainder annuity trust
(as described in this section) is the net fair
market value (as of the appropriate valuation date) of the property placed in trust
less the present value of the annuity. For
purposes of this section, valuation date
means, in general, the date on which the
property is transferred to the trust by the
donor regardless of when the trust is created. In the case of transfers to a charitable remainder annuity trust for which the
valuation date is after April 30, 1999, if an
election is made under section 7520 and

May 23, 2022

§1.7520-2(b) to compute the present value of the charitable interest by using the
interest rate component for either of the 2
months preceding the month in which the
transfer is made, the month so elected is
the valuation date for purposes of determining the interest rate and mortality tables. For purposes of section 2055 or 2106,
the valuation date is the date of death unless the alternate valuation date is elected
in accordance with section 2032 in which
event, and within the limitations set forth
in section 2032 and the regulations in this
part under section 2032, the valuation date
is the alternate valuation date. If the decedent’s estate elects the alternate valuation
date under section 2032 and also elects,
under section 7520 and §1.7520-2(b), to
use the interest rate component for one of
the 2 months preceding the alternate valuation date, the month so elected is the valuation date for purposes of determining
the interest rate and mortality tables. The
present value of an annuity is computed
under §20.2031-7(d) of this chapter for
transfers for which the valuation date is on
or after [applicability date of the Treasury
decision adopting these regulations as final regulations], or under §20.2031-7A(a)
through (g) of this chapter, whichever is
applicable, for transfers for which the valuation date is before [applicability date of
the Treasury decision adopting these regulations as final regulations]. See, however, §1.7520‑3(b) (relating to exceptions to

the use of prescribed tables under certain
circumstances).
*****
(e) Applicability date. Paragraph (c) of
this section applies on and after [applicability date of the Treasury decision adopting these regulations as final regulations].
Par. 8. Section 1.664-4 is amended by:
1. Revising paragraphs (a)(1) and (d).
2. In paragraph (e):
i. Redesignating the paragraph heading as the heading for §1.664‑4A(g)
and paragraphs (e)(1), (2), (5), and (7)
as §1.664‑4A(g)(1), (2), (5), and (6),
respectively.
ii. Adding a new paragraph heading
and new paragraphs (e)(1), (2), and (5).
iii. Revising the heading for paragraph
(e)(6).
iv. Redesignating the text of paragraph
(e)(6) as paragraph (e)(6)(iii).
v. Adding paragraphs (e)(6)(i) and (ii).
vi. Revising the introductory text of
newly redesignated paragraph (e)(6)(iii),
preceding Table D.
vii. Adding a new paragraph (e)(7).
3. Revising paragraph (f).
The additions and revisions read as
follows:
§1.664-4 Calculation of the fair market
value of the remainder interest in a
charitable remainder unitrust.
(a) * * *

(1) Life contingencies determined as to
each life involved, from the values of lx set
forth in Table 2010CM in §20.2031-7(d)
(7)(ii) of this chapter in the case of transfers for which the valuation date is on or
after [applicability date of the Treasury decision adopting these regulations as final
regulations]; or from Table 2000CM contained in §20.2031‑7A(g)(4) of this chapter in the case of transfers for which the
valuation date is on or after May 1, 2009,
and before [applicability date of the Treasury decision adopting these regulations
as final regulations]. See §20.2031‑7A(a)
through (f) of this chapter, whichever is
applicable, for transfers for which the valuation date is before May 1, 2009;
*****
(d) Valuation. The fair market value of a remainder interest in a charitable remainder unitrust (as described in
§1.664-3) for transfers for which the valuation date is on or after [applicability
date of the Treasury decision adopting
these regulations as final regulations], is
its present value determined under paragraph (e) of this section. The fair market
value of a remainder interest in a charitable remainder unitrust (as described in
§1.664-3) for transfers for which the valuation date is before [applicability date
of the Treasury decision adopting these
regulations as final regulations], is its
present value determined under the following sections:

Table 1 to paragraph (d)
Valuation Dates
After
12-31-51
12-31-70
11-30-83
04-30-89
04-30-99
04-30-09

Applicable Regulations
Before
01-01-52
01-01-71
12-01-83
05-01-89
05-01-99
05-01-09
AD

1.664-4A(a)
1.664-4A(b)
1.664-4A(c)
1.664-4A(d)
1.664-4A(e)
1.664-4A(f)
1.664-4A(g)

AD = [applicability date of the Treasury decision adopting these regulations as final regulations].
(e) Valuation of charitable remainder
unitrusts having certain payout sequences for transfers for which the valuation
date is on or after [applicability date of

May 23, 2022

the Treasury decision adopting these
regulations as final regulations]--(1) In
general. Except as otherwise provided in
paragraph (e)(2) of this section, in the case

1114

of transfers for which the valuation date is
on or after [applicability date of the Treasury decision adopting these regulations
as final regulations], the present value

Bulletin No. 2022–21

of a remainder interest is determined under paragraphs (e)(3) through (7) of this
section, provided that, in a short taxable
year, the trustee shall prorate the unitrust
amount as provided in §1.664‑3(a)(1)(v).
See, however, §1.7520-3(b) (relating to
exceptions to the use of the prescribed tables under certain circumstances).
(2) Transitional rule for valuation of
charitable remainder unitrusts. For purposes of section 170, 2055, 2106, 2522,
or 2624, in the case of transfers to a
charitable remainder unitrust for which
the valuation date is on or after January
1, 2021, and before [applicability date of
the Treasury decision adopting these regulations as final regulations], the present
value of a remainder interest based on one
or more measuring lives is determined under this section by using the section 7520
interest rate for the month in which the
valuation date occurs (see §§1.7520-1(b)
and 1.7520-2(a)(2)) and the appropriate
actuarial factors derived from the selected mortality table, either Table 2010CM
in §20.2031-7(d)(7)(ii) of this chapter or
Table 2000CM in §20.2031-7A(g)(4) of
this chapter, at the option of the donor or
the decedent’s executor, as the case may
be. For the convenience of taxpayers, actuarial factors based on Table 2010CM
appear in the proposed version of Table
U(1), and actuarial factors based on Table
2000CM appear in the current version of
Table U(1), which will be available beginning May 5, 2022, at no charge, electronically via the IRS website at https://www.
irs.gov/retirement-plans/actuarial-tables
(or a corresponding URL as may be updated from time to time). The donor or

Bulletin No. 2022–21

decedent’s executor must consistently use
the same mortality basis with respect to
each interest (income, remainder, partial,
etc.) in the same property, and with respect
to all transfers occurring on the valuation
date. For example, gift and income tax
charitable deductions with respect to the
same transfer must be determined based
on factors with the same mortality basis,
and all assets includible in the gross estate
and/or estate tax deductions claimed must
be valued based on factors with the same
mortality basis.
*****
(5) Period is the life of one individual--(i) Factor. If the period described in
§1.664-3(a)(5) is the life of one individual, the factor that is used in determining
the present value of the remainder interest
for transfers for which the valuation date
is on or after [insert the applicability date
of the Treasury decision adopting these
regulations as final regulations] is the
factor obtained through the use of the formula in Figure 1 to this paragraph (e)(5)
(i). The prescribed mortality table is Table 2010CM as set forth in §20.2031‑7(d)
(7)(ii) of this chapter, or for periods before [applicability date of the Treasury
decision adopting these regulations as
final regulations], the appropriate table
found in §20.2031-7A of this chapter. Table 2010CM is referenced by IRS Publication 1458, “Actuarial Values Version
4B.” The mortality tables prescribed for
periods before [applicability date of the
Treasury decision adopting these regulations as final regulations] are referenced
by prior versions of IRS Publication 1458.
Alternatively, the remainder factors have

1115

been determined for the convenience of
taxpayers and appear in Table U(1) under
the appropriate adjusted payout rate. Table
U(1) will be available beginning May 5,
2022, at no charge, electronically via the
IRS website at https://www.irs.gov/retirement-plans/actuarial-tables (or a corresponding URL as may be updated from
time to time). Table U(1) is referenced and
explained by IRS Publication 1458 “Actuarial Valuations Version 4B,” which will
be available after [date of publication of
the final rule in the Federal Register]. For
purposes of the computations described in
this paragraph (e)(5), the age of an individual is the age of that individual at the
individual’s nearest birthday. If the adjusted payout rate is an amount that is between
adjusted payout rates for which factors are
provided in the appropriate table, an exact
method of obtaining the applicable factors
(such as through software using the actual adjusted payout rate and the actuarial
formula in this paragraph (e)(5)) or a linear interpolation must be used, provided
whichever method used is applied consistently. The present value of the remainder
interest is determined by multiplying the
net fair market value (as of the valuation
date as determined in §1.664‑4(e)(4)) of
the property placed in trust by the factor
determined under this paragraph (e)(5). If
the adjusted payout rate is from 0.2 to 20.0
percent, inclusive, taxpayers may see the
actuarial tables referenced and explained
by IRS Publication 1458 “Actuarial Valuations Version 4B”. Alternatively, the
Commissioner may supply a factor upon
a request for a ruling. See paragraph (b)
of this section.

May 23, 2022

explained by IRS Publication 1458 "Actuarial Valuations Version 4B". Alternatively, the
Commissioner may supply a factor upon a request for a ruling. See paragraph (b) of this section.
Figure 1 to paragraph (e)(5)(i) – Formula for determining unitrust remainder factors

Figure 1 to paragraph (e)(5)(i) – Formula for determining unitrust remainder factors

(ii) Sample factors from actuarial Table U(1). For purposes of the example in paragraph

(ii) Sample factors from actuarial Table U(1). For purposes of the example in

paragraph (e)(5)(iii) of this section, the
following factors from Table U(1) and

Table F(3.2) (see paragraph (e)(6)(ii) of
this section) will be used:

(e)(5)(iii) of this section, the following factors from Table U(1) and Table F(3.2) (see paragraph

Table
2 to paragraph
(e)(6)(ii)
of this (e)(5)(ii)
section) will be used:

Table 2 to paragraph (e)(5)(ii) Factors from Table U(1) - Based on Table 2010CM
Adjusted Payout Rate
Factors
on Table 2010CM
Age
4.8% from Table U(1) - Based
5.0%
5.2%
77
0.61491
0.60343
0.59223
Factors from Table F(3.2)
Factors for Computing Adjusted Payout Rates for Unitrusts
Interest at 3.2 Percent
# of Months from Annual Valuation to First Payout
Adjustment Factors for Payments at End of Period
At Least
But Less Than
Annual
Semiannual
6
7
0.984374
0.976683

(iii) Example of interpolation. After [applicability date of the Treasury decision adopting these regulations as final regulations], A, whose age is 76 years
and 11 months, transfers $100,000 to a charitable remainder unitrust on January 1st. The trust instrument
requires that the trust pay to A semiannually (on June

May 23, 2022

30 and December 31) 5 percent of the fair market
value of the trust assets as of January 1st during A’s
life. The section 7520 rate for January is 3.2 percent.
Under Table F(3.2), the appropriate adjustment factor is 0.976683 for semiannual payments payable
at the end of the semiannual period. The adjusted

1116

payout rate is 4.8834% (5% × 0.976683). Based on
interpolating between the remainder factors in Table
U(1), the present value of the remainder interest is
$61,012, computed as illustrated in Figure 2 to this
paragraph (e)(5)(iii).

Bulletin No. 2022–21

Figure 2 to paragraph (e)(5)(iii) – Illustration of unitrust interpolation method

(6) Actuarial
Table
D and
F (0.2)
through
F(20.0)
for transfers
for which
thefor adjusted payout
this section,
but only
have been
computed
by IRS
and appear
(6) Actuarial
Table D and
Tables
F Tables
(0.2) through F(20.0) for transfers for in Table D. Table D can be found on the rates from 4.2 to 14 percent, inclusive. For
transfers
for which the valuation date is on
websiteRemainder
at https://www.irs.gov/retirewhich
the valuation
is on
or May
after 1,IRS
valuation
date isdate
on or
after
1989--(i)
factors for charitable
remainder
May 1, 1989--(i) Remainder factors for ment-plans/actuarial-tables (or a corre- or after [applicability date of the Treasury
charitable remainder unitrusts. For trans- sponding URL as may be updated from decision adopting these regulations as fiForvaluation
transfers
foriswhich
valuation
or after May
1989,
the present
regulations],
wherevalue
the present value
time
to time). date
Table is
D on
is referenced
and 1,nal
fersunitrusts.
for which the
date
on or the
after May 1, 1989, the present value of a explained in IRS Publication 1458 “Actu- of a charitable remainder unitrust interest
of a charitable
unitrust
that is dependent
is determined
by of a life
arial Valuations
Version 4B,”upon
whicha term
will of
is years
dependent
on the termination
charitable
remainderremainder
unitrust interest
that interest
is dependent upon a term of years is de- be available after [date of publication of interest, see paragraph (e)(5) of this secfinal rule (e)(6)(i).
in the Federal
Register].
tion. See,
however, §1.7520-3(b) (relating
termined
the formula
in Figure
using by
theusing
formula
in Figure
3 to thistheparagraph
For the
convenience
of taxpayers,
(e)(5)
of thisForsection.
(relating
exceptions
useofofprescribed taThehowever,
remainder§1.7520-3(b)
factors from Table
D also to to
exceptions to
to the
the use
3 toparagraph
this paragraph
(e)(6)(i).
the con- See,
venience of taxpayers, actuarial factors can be found in paragraph (e)(6)(iii) of bles under certain circumstances).
actuarial factors have been computed by IRS and appear in Table D. Table D can be found on
prescribed tables under certain circumstances).
the IRS website at https://www.irs.gov/retirement-plans/actuarial-tables (or a corresponding

Figure
3 to 3paragraph
(e)(6)(i)
– Formula
for determining
term certain unitrust
remainder
factorsremainder factors
Figure
to paragraph
(e)(6)(i)
– Formula
for determining
term certain
unitrust

URL as may be updated from time to time). Table D is referenced and explained in IRS
Publication 1458 “Actuarial Valuations Version 4B,” which will be available after [date of
publication of the final rule in the Federal Register]. The remainder factors from Table D also
can be found in paragraph (e)(6)(iii) of this section, but only for adjusted payout rates from 4.2 to
14 percent, inclusive. For transfers for which the valuation date is on or after [applicability date
(ii) Unitrust
payout
rate adjustment
factors. as
Forfinal
transfers
for which
the valuation
is
of the Treasury
decision
adopting
these regulations
regulations],
where
the presentdate
value
Bulletin
No.May
2022–21
1117
May
on
after
1, 1989, the
unitrust
payout
rate adjustment
are determined
by usingsee
the 23, 2022
of aorcharitable
remainder
unitrust
interest
is dependent
on thefactors
termination
of a life interest,

(ii) Unitrust payout rate adjustment
factors. For transfers for which the valuation date is on or after May 1, 1989, the
unitrust payout rate adjustment factors
are determined by using the formula in
Figure 4 to this paragraph (e)(6)(ii). For
the convenience of taxpayers, actuarial factors have been computed by IRS,

for interest rates from 0.2 to 20 percent,
inclusive, and appear in Tables F(0.2)
through F(20.0). Tables F(0.2) through
F(20.0) can be found on the IRS website
at https://www.irs.gov/retirement-plans/
actuarial-tables (or a corresponding URL
as may be updated from time to time). Tables F(0.2) through F(20.0) are referenced

and explained in IRS Publication 1458
“Actuarial Valuations Version 4B,” which
will be available after [date of publication
of the final rule in the Federal Register].
The factors from Table F also can be found
in paragraph (e)(6)(iii) of this section, but
only for interest rates from 4.2 to 14 percent, inclusive.

Figure 4 to paragraph (e)(6)(ii) – Formula for determining unitrust payout rate adjustment factors

available
beginning
MayF(14.0).
5, 2022, atThe
no unitrust
i. Revising
the heading
and paragraphs
(iii) Table D and Tables
through
(iii)F(4.2)
Table
D and be
Tables
F(4.2)
through
remainder
factors
F(14.0). The unitrust remainder factors charge, electronically via the IRS website (g)(1) and (2).
Adding paragraphs (g)(3) and (4).
from Table D, for interest rates from 4.2 at https://www.irs.gov/retirement-plans/
from Table D, for interest rates from 4.2 to 14 percent, inclusive, and the ii.unitrust
payout factors
iii. Revising paragraph (g)(5).
to 14 percent, inclusive, and the unitrust actuarial-tables. These actuarial tables
iv. In paragraph (g)(6), revising the inpayout factors from Tables F(4.2) through are referenced and explained by IRS Pubfrom
Tables
F(4.2) through F(14.0)
are as
follows:
lication
1458,
“Actuarial Valuations Ver- troductory text.
F(14.0)
are as
follows:
sion 4B” (2022). This publication will be
v. Adding paragraph (g)(7).
*****
The additions and revisions read as
(7)*Actuarial
* * * * Table U(1) for transfers available after [date of publication of the
for which the valuation date is on or af- final rule in the Federal Register]. See, follows:
however,
§1.7520‑3(b)
(relating
to excep- date is on or after
ter [applicability
date of theTable
Treasury
(7) Actuarial
U(1) for
transfers
for which
the valuation
decision adopting these regulations as tions to the use of prescribed tables under §1.664-4A Valuation of charitable
remainder interests for which the
final regulations]. The present value of a certain circumstances).
[applicability
of theremainTreasury decision
adopting
regulations
as final regulations].
The
(f) Applicability
date.these
This section
ap- valuation
date is before [applicability
remainder
interest in adate
charitable
der unitrust tha

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3Af5b612ba595c8924. Public record. Not legal advice.