i](x, g) be the
annuity factor observed in week i for an x-year-old individual with a guarantee period of g years.
The monthly
annuity factor is the premium for an actuarially fair annuity that pays $1 per month for life.
Find the single life
annuity factor for a fifteen year annuity at a 1.
The gift reportable for tax purposes is fixed, given the fair market value of the gift and the applicable
annuity factor (combining term, Section 7520 rate and retained annuity).
An income factor is converted into an
annuity factor by dividing the income factor by the appropriate interest rate for the month.
1) Find the term certain
annuity factor for 20 years at a 3.
Under the fixed
annuity factor method, the annual payment is determined by dividing the account balance by an
annuity factor calculated using the mortality table in Rev.
A property valued at the end of its life cycle would be reduced to the ground value, as the
annuity factor would be reduced to zero for remaining life (RL = 0), thus eliminating the first term of the formula.
The decedent's estate contended that the IRC section 7520
annuity factor and, thereby, the interest rate applicable on the valuation date, should not be used to determine the present value of the lottery payments for estate tax purposes.
Case law (19) indicates that client success is most likely where (1) payment is computed by dividing the fair market value of the property by the appropriate
annuity factor determined from the government's own tables, (2) the trust is obligated to pay the annuity without regard to the value of the property held in the trust or the income produced by trust assets, and (3) the grantor holds no powers to manage the trust or control the trustee.
To arrive at the
annuity factor, the reciprocal of the remainder factor (the term interest factor) is divided by the discount rate.
Reference Tables Table A Retirement Age
Annuity Factor 55 13.