Life estate tables are actuarial charts published by the IRS that split a property’s fair market value into two dollar figures: what the life tenant’s right to live there for the rest of their life is worth, and what the remainderman’s future ownership is worth. You look up the life tenant’s age, pull two decimal factors that add to 1.00, and multiply each by the property’s appraised value. Those figures drive gift tax filings, Medicaid transfer-penalty calculations, and any sale that happens while the life tenant is still alive.
What the Tables Actually Do
Each table is organized by the life tenant’s age at the date of transfer. For every age, the table gives a life estate factor and a remainder factor. The two always sum to 1.00, so the whole property value is accounted for between the two parties.
At younger ages the life estate factor is larger, because the person is statistically likely to occupy the property for many more years. As the life tenant ages, the life estate factor shrinks and the remainder factor grows. You find the correct row by looking up the life tenant’s age in the table that matches the interest rate for the month of transfer.
The Section 7520 Interest Rate
The factor you pull depends on the interest rate environment on the day of the transfer. Under federal tax law, the IRS publishes a monthly rate equal to 120 percent of the federal midterm rate, rounded to the nearest two-tenths of one percent.1Internal Revenue Service. Section 7520 Interest Rates This is the Section 7520 rate. As of April 2026, that rate stands at 4.6 percent.
Higher rates generally increase the life estate factor and decrease the remainder factor. Lower rates do the opposite. The same 70-year-old transferring the same house can see the remainder valued thousands of dollars differently depending on whether rates are at 3 percent or 5 percent.
You are not stuck with the rate for the month you sign the deed. Federal regulations let you use the Section 7520 rate from the month of transfer or from either of the two preceding months, and you can pick whichever produces the most favorable valuation.2eCFR. 26 CFR 20.7520-2 – Valuation of Charitable Interests This two-month lookback is easy to miss and can save real money on a gift tax return.
How to Calculate the Two Values
You need three inputs: the property’s fair market value (usually from a professional appraisal), the life tenant’s age at the date of transfer, and the Section 7520 rate for the month you choose.
Look up the rate on the IRS website.1Internal Revenue Service. Section 7520 Interest Rates Then open the corresponding Table S from the IRS actuarial tables page and find the life tenant’s age.3Internal Revenue Service. Actuarial Tables You will see a life estate factor and a remainder factor for that age and rate combination. Multiply the fair market value by each factor.
Say a property is worth $300,000, the life tenant is 72, and the applicable Table S shows a life estate factor of 0.45000 and a remainder factor of 0.55000 at the chosen rate. The life estate is worth $135,000 ($300,000 × 0.45000). The remainder interest is worth $165,000 ($300,000 × 0.55000). Those numbers go directly onto tax returns, deeds, and Medicaid applications.
Which Table Applies
Different agencies use different actuarial tables, and using the wrong one can invalidate a filing. For federal gift, estate, and income tax purposes, the IRS requires Table S from its actuarial tables, currently based on the 2010CM mortality data that took effect June 1, 2023.3Internal Revenue Service. Actuarial Tables Publication 1457 provides worked examples showing how to apply the factors.4Internal Revenue Service. Publication 1457 – Actuarial Valuations The IRS tables are gender-neutral, using combined mortality data for the total population.
The Social Security Administration publishes its own period life tables, but they serve a different purpose. SSA tables estimate remaining life expectancy and are broken out by sex and calendar year, which suits retirement planning but not tax valuations.5Social Security Administration. Actuarial Life Table Some state Medicaid programs use their own tables, and a few still use older gender-specific factors. Identify the agency with jurisdiction over your transaction before you pull any numbers.
When You Cannot Use the Tables
Standard tables assume the life tenant has a normal life expectancy for their age. When that assumption fails, the IRS does not let you use them. If the life tenant has an incurable illness or deteriorating condition and there is at least a 50 percent probability they will die within one year, the standard mortality component cannot be used for the valuation.6eCFR. 26 CFR 25.7520-3 – Limitation on the Application of Section 7520 An alternative valuation method is required, typically a professional actuarial analysis specific to the individual.
There is a safe harbor. If the life tenant survives 18 months or longer after the transfer, they are presumed not to have been terminally ill at the time of the gift, and the IRS can overcome that presumption only with clear and convincing evidence.6eCFR. 26 CFR 25.7520-3 – Limitation on the Application of Section 7520
Using the Numbers on a Gift Tax Return
When you deed your home to someone while keeping the right to live there for life, the IRS treats the transfer of the remainder interest as a taxable gift. You report it on Form 709, and the amount of the gift equals the remainder interest calculated from the tables.7Internal Revenue Service. Instructions for Form 709 In the example above, the reported gift is $165,000, not the full $300,000, because you retained the life estate.
That gift amount counts against your lifetime gift and estate tax exemption. For most people the exemption is high enough that no gift tax is actually owed in the year of transfer, but the amount still gets reported and reduces the exemption available later. Skipping Form 709 is a common and costly mistake; the IRS can assess penalties even when no tax is due.
Using the Numbers for Medicaid
Medicaid is the other setting where these tables drive real money. When someone applies for Medicaid coverage of nursing-home care, the state reviews all asset transfers made within the 60 months before the application.8Office of the Law Revision Counsel. 42 USC 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets If you deeded a remainder interest to a family member during that window while keeping a life estate, Medicaid treats the value of that remainder interest, calculated from the tables, as an uncompensated transfer.
The penalty is the value of the transferred remainder interest divided by the average monthly cost of nursing-home care in your state. The result is the number of months you are ineligible for coverage.8Office of the Law Revision Counsel. 42 USC 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets A remainder interest worth $165,000 in a state where nursing-home care averages $10,000 per month produces a 16.5-month penalty during which the applicant must privately fund care. States cannot round the fraction down.
Timing matters. A life estate created six or more years before a Medicaid application falls outside the look-back window entirely. One created four years before the application sits squarely inside it.
Selling Before the Life Tenant Dies
If the life tenant and remainderman agree to sell the property before the life tenant dies, the sale proceeds are divided between them using the same table factors, recalculated with the life tenant’s current age and the current Section 7520 rate. The life tenant receives the life estate share; the remainderman receives the remainder share.
Both parties generally must consent to the sale, since neither holds full title alone. A remainderman who refuses can effectively block the transaction. Allocation of closing costs, capital gains tax, and any improvements one party made can complicate the split, and getting the numbers wrong creates problems on both the tax side and, for anyone receiving public benefits, the Medicaid side.