Revenue Administrative Bulletin 1989-44
Approved: May 5, 1989
INHERITANCE TAX -
COMPUTATION OF PRESENT CLEAR MARKET VALUE
RAB-89-44. This Bulletin provides information regarding
the calculation of the present clear market value of certain
interests for inheritance tax purposes.
Tables 1 and 2 (see pages 4 and 5 of this Bulletin) will be
used for calculating the present clear market value of remainders
preceded by a life estate, life estates, and survivor life
annuities. However, annuities payable other than annually must be
computed by the Department of Treasury. In these cases, full data
shall be sent to the Department. The Department will determine,
based upon tables provided by the Commissioner of Insurance, the
present clear market value of the several interests therein and
will then forward the results to the requesting judge. [MCL
205.211]
Computing the Value of Remainders and Reversions
Table 1 gives the present clear market value of each dollar of
remainder, at the termination of a life estate, when the life
tenant is of the age and gender indicated. The Table was prepared
at the request of the Department of Treasury, pursuant to MCL
205.211. The Table is certified for use in computing, under the
Inheritance Tax Law, the present value of reversions and
remainders. The Table is in accordance with the rule, method or
standard of mortality and value employed by the Commissioner of
Insurance in ascertaining the value of policies of life
insurance. The Table is based on a 5% per annum rate.
The value of remainders and complete reversions is computed by
multiplying the principal sum to be received upon termination of
the life estate by the amount indicated across from the age, and
under the gender classification, of the life tenant.
Example: In an estate of $ 4,000.00, where the male
life tenant is 57-years old, the present clear market value of
each $ 1.00 of remainder is $ 0.3681053. Thus:
| $4,000.00 |
Principal Sum |
| x .3681053 |
Present clear
market value of each $ 1.00 of remainder, when the
remainder succeeds the life estate of a 57-year old, male
life tenant. |
| $1,472.42 |
Present clear market value of
the remainder to a $4,000.00 estate, when the remainder
is preceded by a life estate in favor of a 57-year old
male life tenant. |
The value of the preceding life estate is computed in two
steps:
- Compute the difference between 1.0 (one) and the
present clear market value of each $ 1.00 of the
remainder which succeeds the life tenancy. (This
latter value is obtained from the table on page
4. It is the number which is found across from
the age of the life tenant, and under the gender
classification of the life tenant.)
- Multiply the principal sum by the difference
obtained in step 1. The product, of the
multiplication in step 2 is the present clear
market value of the preceding life estate.
Example: In an estate of $ 18,000.00, where the female
life tenant is 35-years old, the present clear market value of
each $ 1.00 of remainder is $ 0.1203076. Thus:
Step 1
| $1.00 |
(One) |
| - 0.1203076 |
Present clear market
value of each $ 1.00 of remainder when the remainder
succeeds the life tenancy of a 35-year old, female
life tenant. |
| 0.879692 |
Present clear market
value of each $ 1.00 of life estate when the life
tenant is a 35-year old woman. |
Step 2
| $ 18,000.00 |
Principal Sum |
| x 0.8796924 |
Present clear market
value of each $ 1.00 of life estate when the life
tenant is a 35-year old woman. |
| $ 15,834.46 |
Present clear market
value of the life estate, derived from a principal
sum of $ 18,000.00, when the life tenant is a 35-year
old woman. |
Table 1 is effective for all life estates and remainders
received due to a death occurring on or after October 1, 1978.
Computing the Value of Annuities
Table 2 is used to determine the present clear market value of
survivor life annuities. It was prepared at the request of the
Department of Treasury, pursuant to MCL 205.211. The Table is
certified for use in computing, under the Inheritance Tax Law,
the present clear market value of survivor life annuities, and it
is in accord with the rule, method or standard of mortality and
value employed by the Commissioner of Insurance in ascertaining
the value of policies of life insurance. The Table is based on a
5% per annum rate.
The value of survivor life annuities is computed by
multiplying the amount payable annually to the surviving
annuitant by the amount indicated across from the age, and under
the gender classification, of the surviving annuitant.
Example: A 57-year old male has a survivor life annuity
with an amount payable annually of $2,000.00. Thus:
| $ 2,000.00 |
Amount payable annually |
| x 12.63789 |
Present clear market value of
a survivor life annuity, having an amount payable
annually of $1.00, when the survivor life annuitant is a
57-year old male. |
| $ 25,275.78 |
Present clear market value of
a survivor life annuity, having an amount payable
annually of $2,000.00, when the survivor life annuitant
is a 57-year old male. |
Table 2 is effective for all survivor life annuities received
due to a death occurring on, or after, October 1, 1978.
TABLE 1
Present Clear Market Value of Each $1.00
of a Remainder Preceded by a Life Estate*
| Age |
Male |
Female |
Age |
Male |
Female |
Age |
Male |
Female |
| |
|
|
|
|
|
|
|
|
| 0-5 |
.0436688 |
.0314518 |
45 |
.2391466 |
.1861053 |
80 |
.6976984 |
.6650951 |
| 6 |
.0454016 |
.0327965 |
46 |
.2488377 |
.1942477 |
81 |
.7123886 |
.6824596 |
| 7 |
.0472612 |
.0342481 |
47 |
.2587358 |
.2027103 |
82 |
.7268704 |
.6994897 |
| 8 |
.0492336 |
.0358022 |
48 |
.2688369 |
.2115033 |
83 |
.7411692 |
.7161133 |
| 9 |
.0513158 |
.0374539 |
49 |
.2791236 |
.2206307 |
84 |
.7553210 |
.7322585 |
| |
|
|
|
|
|
|
|
|
| 10 |
.0535025 |
.0391984 |
50 |
.2895942 |
.2300963 |
85 |
.7693444 |
.7478346 |
| 11 |
.0558000 |
.0410307 |
51 |
.3002395 |
.2399134 |
86 |
.7832254 |
.7627317 |
| 12 |
.0582033 |
.0429445 |
52 |
.3110679 |
.2500721 |
87 |
.7969218 |
.7768196 |
| 13 |
.0607180 |
.0449350 |
53 |
.3220803 |
.2605579 |
88 |
.8103557 |
.7899616 |
| 14 |
.0633596 |
.0470152 |
54 |
.3332802 |
.2713472 |
89 |
.8234371 |
.8020400 |
| |
|
|
|
|
|
|
|
|
| 15 |
.0661246 |
.0491907 |
55 |
.3446786 |
.2824270 |
90 |
.8360666 |
.8129885 |
| 16 |
.0690200 |
.0514652 |
56 |
.3562821 |
.2937771 |
91 |
.8481523 |
.8228099 |
| 17 |
.0720516 |
.0538344 |
57 |
.3681053 |
.3053860 |
92 |
.8596069 |
.8315771 |
| 18 |
.0752188 |
.0563130 |
58 |
.3801588 |
.3172365 |
93 |
.8703484 |
.8394217 |
| 19 |
.0785335 |
.0589067 |
59 |
.3924554 |
.3293349 |
94 |
.8803149 |
.8465191 |
| |
|
|
|
|
|
|
|
|
| 20 |
.0819980 |
.0616112 |
60 |
.4050038 |
.3416881 |
95 |
.8894823 |
.8530723 |
| 21 |
.0856284 |
.0644417 |
61 |
.4178163 |
.3543258 |
96 |
.8978726 |
.8592853 |
| 22 |
.0894229 |
.0673956 |
62 |
.4309065 |
.3672936 |
97 |
.9055494 |
.8653557 |
| 23 |
.0933911 |
.0704887 |
63 |
.4442813 |
.3806518 |
98 |
.9125804 |
.8714266 |
| 24 |
.0975321 |
.0737184 |
64 |
.4579441 |
.3944570 |
99 |
.9190218 |
.8775796 |
| |
|
|
|
|
|
|
|
|
| 25 |
.101864 |
.0770917 |
65 |
.4718860 |
.4087695 |
100 |
.9249223 |
.8838487 |
| 26 |
.1063876 |
.0806157 |
66 |
.4860984 |
.4236212 |
101 |
.9303261 |
.8902339 |
| 27 |
.1111134 |
.0842984 |
67 |
.5005597 |
.4390070 |
102 |
.9352695 |
.8967163 |
| 28 |
.1160509 |
.0881480 |
68 |
.5152445 |
.4549023 |
103 |
.9397888 |
.9032597 |
| 29 |
.1212023 |
.0921728 |
69 |
.5301246 |
.4712579 |
104 |
.9439190 |
.9098251 |
| |
|
|
|
|
|
|
|
|
| 30 |
.1265796 |
.0963729 |
70 |
.5451667 |
.4880225 |
105 |
.9476920 |
.9163675 |
| 31 |
.1321854 |
.1007570 |
71 |
.5603450 |
.5051297 |
106 |
.9511370 |
.9228431 |
| 32 |
.1380323 |
.1053348 |
72 |
.5756268 |
.5225225 |
107 |
.9542803 |
.9292093 |
| 33 |
.1441233 |
.1101167 |
73 |
.5909842 |
.5401393 |
108 |
.9571464 |
.9354276 |
| 34 |
.1504724 |
.1151040 |
74 |
.6063841 |
.5579265 |
109 |
.9597587 |
.9414615 |
| |
|
|
|
|
|
|
|
|
| 35 |
.1570846 |
.1203076 |
75 |
.6217928 |
.5758240 |
110 |
.9621421 |
.9472835 |
| 36 |
.1639746 |
.1257382 |
76 |
.6371795 |
.5937829 |
111 |
.9643336 |
.9528975 |
| 37 |
.1711486 |
.1313996 |
77 |
.6524864 |
.6117483 |
112 |
.9664446 |
.9584428 |
| 38 |
.1786057 |
.1373036 |
78 |
.6677220 |
.6296653 |
113 |
.9690408 |
.9647124 |
| 39 |
.1863620 |
.1434550 |
79 |
.6828003 |
.6474705 |
114 |
.9761904 |
.9761904 |
| |
|
|
|
|
|
|
|
|
| 40 |
.1944258 |
.1498662 |
|
|
|
|
|
|
| 41 |
.2028074 |
.1565433 |
|
|
|
|
|
|
| 42 |
.2114916 |
.1635006 |
|
|
|
|
|
|
| 43 |
.2204569 |
.1707444 |
|
|
|
|
|
|
| 44 |
.2296824 |
.1782738 |
|
|
|
|
|
|
*Computations made by Insurance Bureau,
Department of Licensing and Regulation.
TABLE 2
Present Clear Market Value of a Survivor Life Annuity
(for each $1.00 of Amount Payable Annually)*
| Age |
Male |
Female |
Age |
Male |
Female |
Age |
Male |
Female |
| |
|
|
|
|
|
|
|
|
| 0-5 |
19.12662 |
19.37096 |
45 |
15.21707 |
16.27789 |
80 |
6.04603 |
6.69810 |
| 6 |
19.09197 |
19.34407 |
46 |
15.02325 |
16.11505 |
81 |
5.75223 |
6.35081 |
| 7 |
19.05478 |
19.31504 |
47 |
14.82528 |
15.94579 |
82 |
5.46259 |
6.01021 |
| 8 |
19.01533 |
19.28396 |
48 |
14.62326 |
15.76993 |
83 |
5.17662 |
5.67773 |
| 9 |
18.97368 |
19.25092 |
49 |
14.41753 |
15.58739 |
84 |
4.89358 |
5.35483 |
| |
|
|
|
|
|
|
|
|
| 10 |
18.92995 |
19.21603 |
50 |
14.20812 |
15.39807 |
85 |
4.61311 |
5.04331 |
| 11 |
18.88400 |
19.17939 |
51 |
13.99521 |
15.20173 |
86 |
4.33549 |
4.74537 |
| 12 |
18.83593 |
19.14111 |
52 |
13.77864 |
14.99856 |
87 |
4.06156 |
4.46361 |
| 13 |
18.78564 |
19.10130 |
53 |
13.55839 |
14.78884 |
88 |
3.79289 |
4.20077 |
| 14 |
18.73281 |
19.05970 |
54 |
13.33440 |
14.57306 |
89 |
3.53126 |
3.95920 |
| |
|
|
|
|
|
|
|
|
| 15 |
18.67751 |
19.01619 |
55 |
13.10643 |
14.35146 |
90 |
3.27867 |
3.74023 |
| 16 |
18.61960 |
18.97070 |
56 |
12.87436 |
14.12446 |
91 |
3.03695 |
3.54380 |
| 17 |
18.55897 |
18.92331 |
57 |
12.63789 |
13.89228 |
92 |
2.80786 |
3.36846 |
| 18 |
18.49562 |
18.87374 |
58 |
12.39682 |
13.65527 |
93 |
2.59303 |
3.21157 |
| 19 |
18.42933 |
18.82187 |
59 |
12.15089 |
13.41330 |
94 |
2.39370 |
3.06962 |
| |
|
|
|
|
|
|
|
|
| 20 |
18.36004 |
18.76778 |
60 |
11.89992 |
13.16624 |
95 |
2.21035 |
2.93855 |
| 21 |
18.28743 |
18.71117 |
61 |
11.64367 |
12.91348 |
96 |
2.04255 |
2.81429 |
| 22 |
18.21154 |
18.65209 |
62 |
11.38187 |
12.65413 |
97 |
1.88901 |
2.69289 |
| 23 |
18.13218 |
18.59023 |
63 |
11.11437 |
12.38695 |
98 |
1.74839 |
2.57147 |
| 24 |
18.04936 |
18.52563 |
64 |
10.84112 |
12.11086 |
99 |
1.61956 |
2.44841 |
| |
|
|
|
|
|
|
|
|
| 25 |
17.96272 |
18.45817 |
65 |
10.56228 |
11.82461 |
100 |
1.50153 |
2.32303 |
| 26 |
17.87225 |
18.38769 |
66 |
10.27803 |
11.52758 |
101 |
1.39348 |
2.19532 |
| 27 |
17.77773 |
18.31403 |
67 |
9.98881 |
11.21986 |
102 |
1.29461 |
2.06567 |
| 28 |
17.67898 |
18.23704 |
68 |
9.69511 |
10.90195 |
103 |
1.20422 |
1.93481 |
| 29 |
17.57595 |
18.15654 |
69 |
9.39751 |
10.57484 |
104 |
1.12162 |
1.80350 |
| |
|
|
|
|
|
|
|
|
| 30 |
17.46841 |
18.07254 |
70 |
9.09665 |
10.23955 |
105 |
1.04616 |
1.67265 |
| 31 |
17.35629 |
17.98486 |
71 |
8.79310 |
9.89741 |
106 |
.97726 |
1.54314 |
| 32 |
17.23935 |
17.89330 |
72 |
8.48746 |
9.54955 |
107 |
.91439 |
1.41581 |
| 33 |
17.11753 |
17.79767 |
73 |
8.18032 |
9.19721 |
108 |
.85707 |
1.29145 |
| 34 |
16.99055 |
17.69792 |
74 |
7.87232 |
8.84147 |
109 |
.80483 |
1.17077 |
| |
|
|
|
|
|
|
|
|
| 35 |
16.85831 |
17.59385 |
75 |
.6217928 |
8.48352 |
110 |
.75716 |
1.05433 |
| 36 |
16.72051 |
17.48524 |
76 |
.6371795 |
8.12434 |
111 |
.71333 |
.94205 |
| 37 |
16.57703 |
17.37201 |
77 |
.6524864 |
7.76503 |
112 |
.67111 |
.83114 |
| 38 |
16.42789 |
17.25393 |
78 |
.6677220 |
7.40669 |
113 |
.61918 |
.70575 |
| 39 |
16.27276 |
17.13090 |
79 |
.6828003 |
7.05059 |
114 |
.47619 |
.47619 |
| |
|
|
|
|
|
|
|
|
| 40 |
16.11148 |
17.00268 |
|
|
|
|
|
|
| 41 |
15.94385 |
16.86913 |
|
|
|
|
|
|
| 42 |
15.77017 |
16.72999 |
|
|
|
|
|
|
| 43 |
15.59086 |
16.58511 |
|
|
|
|
|
|
| 44 |
15.40635 |
16.43452 |
|
|
|
|
|
|
