Pennsylvania Schedule K - Life Estate, Annuity & Term Certain (Instructions)

Schedule K - Life Estate, Annuity & Term Certain (Instructions)
Instructions for REV-1514 Schedule K - Life Estate, Annuity & Term Certain
Instructions for REV-1514 Schedule K
REV-1514 EX (02-15)

GENERAL INFORMATION
PURPOSE OF SCHEDULE
Use REV-1514 Schedule K to report all
presently vested life estates, annuities
and terms certain created by the
decedent for which valuations must be
actuarially determined.

FORM INSTRUCTIONS
Estate of
Enter the complete name of the estate
as shown on REV-1500, Pennsylvania
Inheritance Tax Return.

File Number
Enter the file number of the estate
assigned by the Register of Wills as
shown on REV-1500, Pennsylvania
Inheritance Tax Return.

GENERAL INSTRUCTIONS
Life Estate Interest Calculation
The asset(s) subject to the annuity or
life estate calculation must be included
in the asset schedules (A through G) at
the full date of death value.
The description of the trust, property
interest or other arrangement to be
valued must include the name, date of
birth, and age of each beneficiary to
enable the Department of Revenue to
readily identify the property interest
to be valued with reference to the
governing instrument.

Annuity Interest Calculation
If the interest to be valued is the right
to receive the income or annuity for a
term certain rather than the life of a
person, include the number of years.
If the decedent, by testamentary

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Life Estate, Annuity & Term Certain

disposition or inter-vivos transfer did
not allow for the disposition of assets
outright at the time of death but
allowed for their limited distribution to
a beneficiary for the duration of the
beneficiary’s life or allowed for disposition over a specific term of years, it is
a taxable transfer.
Do not use this schedule if the
beneficiary has elected a 5 percent or $5,000 option or if the surviving
spouse plans to invade the principal of
the trust.
For decedents dying on or after
Dec. 13, 1982, the valuation methods
are the same as described in U.S.
Treasury Department regulations. The
actuarial tables used for dates of death
on or after May 1, 1989, can be found
in IRS Publication 1457, Actuarial
Tables.
The actuarial tables used for dates of
death on or after May 1, 2000, can be
found in IRS Publication 1457, Actuarial
Tables, Aleph and Beth Volumes. The
present value of an annuity or life
estate which is dependent on the
continuation or termination of the life
of only one person or the present value
of an annuity or income interest which
is payable for a term certain will be
determined using tables which incorporate an interest rate equal to 120 percent of the federal midterm annual rate
in effect for the month in which the
date of death occurred. For purposes of
the computation, the age of the life
tenant used is his or her age on the
birthday nearest to the date of death.
The Department of Revenue will provide
single life estate factors by telephone
free of charge.

For any other type of calculation a fee
is applied for private letter valuations
that involve an actuarial calculation.
This fee is similar to that charged by
the Internal Revenue Service for
private letter rulings which involve an
actuarial calculation, and is a result of
the increase in requests due to rate
changes in the 1995 amendments to
the PA Inheritance and Estate Tax Act.
The fee must be paid by a certified
form of payment prior to the issuance
of the valuation. Acceptable forms of
payment are a money order, bank
draft, or certified check made payable
to the PA Department of Revenue.
Personal or business account checks
will not be accepted.
The department should be contacted at
least three weeks in advance of the
date needed to request a written
valuation. The calculation and written
valuation will be mailed to the estate
representative. To speak to a Trust
Valuation Specialist call 717-787-8327.
Requests should be mailed to:
PA DEPARTMENT OF REVENUE
INHERITANCE TAX DIVISION
SPECIALTY TAX UNIT
PO BOX 280601
HARRISBURG, PA 17128-0601
The request must be accompanied by
a statement including the dates of birth
of each person, the duration of whose
life may affect the value of the interest,
and copies of the relevant instruments.
For charitable remainder unitrusts and
pooled income funds, the factor to
calculate the interest of a beneficiary is
calculated in accordance with the
methods described in U.S. Treasury
Department regulations.

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