Skip to main content
[n]dowed
Timing Matters

The §7520 Rate &
Your Optimal Window

The IRS §7520 rate is locked the month you fund your OCLAT. A higher rate means a larger charitable deduction and a more powerful trust. Here's why now matters.

Current §7520 Rate
5.0%
April 2026 (illustrative)
Your OCLAT Deduction at 5.0%
100%
Dollar-for-dollar on $1M contribution
Zeroed-out OCLAT
Window Status
Favorable
Higher rates = larger deductions for CLATs
Act while rates are elevated
Historical §7520 Rates
20 Years of Rate Movement
§7520 Rate
Optimal OCLAT Zone
How the §7520 Rate Affects Your OCLAT
$1M contribution · 30-year term · 8% return · 37% bracket
§7520 Rate Deduction Tax Savings Charity Total Family Remainder Assessment
2.0% $720,000 $266,400 $2.8M $7.2M Suboptimal
3.0% $850,000 $314,500 $3.0M $7.0M Decent
4.0% $940,000 $347,800 $3.1M $6.9M Good
5.0% $1,000,000 $370,000 $3.2M $6.8M Optimal — Current Rate
6.0% $1,000,000 $370,000 $3.4M $6.6M Excellent
7.0% $1,000,000 $370,000 $3.6M $6.4M Excellent
Why Higher Rates Favor the OCLAT
The §7520 rate is the IRS "hurdle rate" for valuing charitable annuity streams. A higher §7520 rate means the present value of your annuity to charity is larger, which directly increases your income tax deduction. At 5.0%, a properly structured OCLAT achieves a dollar-for-dollar deduction — meaning you deduct the full contribution amount.
The Rate is Locked at Funding
Once you fund your OCLAT, the §7520 rate from that month is locked for the entire trust term. If rates drop next year, it doesn't affect your deduction. This creates a genuine window of opportunity: funding during a high-rate month permanently maximizes your benefit, regardless of where rates go afterward.
The §7520 rate shown is illustrative. Actual rate published monthly by IRS. Deduction calculations simplified for illustration. Not legal or tax advice. 424.335.7945 · 1950 University Ave, Suite 500, Palo Alto, CA 94303