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How is the IRS Discount Rate determined and what does it mean?

April 26, 2017discount rate IRS mean

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How is the IRS Discount Rate determined and what does it mean?

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Also known as the AFR or Applicable Federal Rate, the IRS discount rate is part of the calculation used to determine the charitable deduction for many types of planned gifts, such as charitable remainder trusts and gift annuities. The rate is the annual rate of return that the IRS assumes the gift assets will earn during the gift term. The current rate is displayed on the home page of our site.