The valuation rate is the major factor in determining the value of income over time. The program uses this rate in determining the tax liability generated as income received in respect of a decedent when an heir continues to receive an income asset after the death of the owner. The IRS publishes the valuation rate each month.

 

This is not a precise calculation: the value of the income is only an estimate. The present value of the future income based on the IRS rate determines the value of the income. You will not have all of the information necessary to exactly calculate the value of the income for the following reasons: 

• The amount of income is only an estimate.
• The exact conditions of the continued income for the survivor have an effect on the amount. Some of these conditions follow:
  • Frequency of income payments
  • Age and sex (life expectancy) of the receiver
  • Applicable IRS valuation rate at that time

 

All the program assumes is that a balance is paid for a certain amount of years. It makes no provisions. It is beyond the capacity of the program to ask for all of the necessary information to make this calculation. You should consult tax counsel for more information.

 

 

---

© 2006 Impact Technologies Group, Inc. All Rights Reserved.