The value of a future, contingent, or limited estate, income, or interest in property is generally the present value or worth of such estate, income, or interest at the date of the transferor's death. In this connection, the Inheritance Tax Law specifically provides that such present value or worth is to be determined in accordance with the standards of mortality and values set forth in the United States Life Tables: 1959-1961, published by the United States Department of Health, Education and Welfare, Public Health Service, and the rate of interest used in computing the present value of the estate, income or interest is 6 percent per annum compounded annually. In determining the present value or worth as of the date of the transferor's death of a future, contingent, or limited estate, income or interest, other than an annuity in a fixed amount, the yearly income, or the annual value of the use or income, of the estate, income or interest, is considered equivalent to 6 percent of the appraised value of the property upon which the estate, income or interest is based.

A single life annuity table at 6 percent showing the present value or worth of an annuity, a life estate and a remainder interest of $1 due at the end of each year during the life of a male person of a specified age and of $1 due at the death of a male person of a specified age, respectively, is set forth in Section 13953 as Table A(1). Table A(2) shows the present value or worth at 6 percent of an annuity, life estate and a remainder interest of $1 due at the end of each year during the life of a female person of a specified age and the present value or worth of $1 due at the death of a female person of a specified age, respectively. The present value or worth at 6 percent of an annuity for a term certain, and income interest for a term certain, and a remainder interest postponed for a term certain is set forth in Section13953 as Table B.

In the case of a transfer of the character above set forth made by a transferor dying on or after November 10, 1969, but prior to January 1, 1975, the present value or worth thereof is to be determined by the United States Life Tables and Actuarial Tables 1939-1941, Table 38, published by the Bureau of the Census of the United States Department of Commerce, and the rate of interest used in computing the present value of the estate, income or interest is 3 ½ percent per annum compounded annually. In such a case the yearly income or annual value of the use or income of an estate or interest is 3 ½ percent of the appraised value of the property upon which the estate or interest is based.

A single life annuity table at 3 ½ percent showing the present value or worth of an annuity, a life estate and a remainder interest of $1 due at the end of each year during the life of a person of a specified age and of $1 due at the death of a person of a specified age, respectively, is set forth in Section 13953.1 as Table C. The present value or worth at 3 ½ percent of an annuity for a term certain, and income interest for a term certain, and a remainder interest postponed for a term certain is set forth in Section 13953.1 as Table D.

In the case of a transfer of the character above set forth made by a transferor dying on or after July 1, 1945, but prior to November 10, 1969, the present value or worth thereof is to be determined by the Actuaries Combined Experience Tables of Mortality, save that the rate of interest used shall be 4 percent per annum; and, the yearly income or annual value of the use or income of an estate or interest is 4 percent of the appraised value of the property upon which the estate or interest is based.

In a case of a transfer of the character above set forth made by a transferor dying prior to July 1, 1945, the value thereof is to be determined by the Actuaries Combined Experience Tables of Mortality, save that the rate of interest used shall be 5 percent per annum; and, the yearly income or annual value of the use or income of an estate or interest is 5 percent of the appraised value of the property upon which the estate or interest is based.

It is assumed in the illustrative computations which follow that the transfer was made on or after January 1, 1975, and the 6 percent tables are therefore used.

CAUTION: Tables A(1), A(2) and B, contained in Section 13953 are to be used to value interest in property for decedents dying on or after January 1, 1975. Tables C and D, contained in Section 13953.1, are to be used to value interest in property for decedents dying on or after November 10, 1969, but prior to January 1, 1975. Care should be taken to refer to the correct table in each case.

Note: Reference: Section 13952, Revenue and Taxation Code.