IRS Releases New Mortality Tables

Internal Revenue Code Section 7520 requires that the Secretary of the Treasury revise the mortality assumptions underlying the IRS tables at least once every ten years to incorporate the most recently available mortality data. These tables were last updated on May 1, 1999, and new tables have now been issued effective for transactions occurring on or after May 1, 2009.

What is the effect on life expectancy under the new tables? It is interesting to look at the life expectancies and compare them under the old and the new tables.

At age 70, under the 1990 census table, the life expectancy of a 70 year old was 13.95 years and under the new table is rises to 14.27 years. Again, the increase in number of years is less dramatic than under the old tables as age come closer to biological limits.

At age 80, in comparing the 1980 and 1990 tables, the increase in life expectancy went from 7.98 years to 8.4 years. It only climbs to 8.42 years under the new table.

The tables will now impact charitable remainder trusts, qualified personal residence trusts and private annuities.

The actuarial tables and some of their uses are explained in more detail in the following IRS publications:

Publication 1457 provides examples for valuing annuities, life estates, and remainders generally.

Publication 1458 provides examples for valuing interests in unitrusts.

Publication 1459 provides examples for valuing remainder interests in depreciable property for income tax purposes.

For estate planning under the new tables, call Mitchell A. Port at (310) 559-5259.