1034-00004
· Group Strathmore Corp · GRAT Documents
grat-a-annuity-payment-schedule.xlsx
DOCUMENT
M&A / Corporate
[sheet: GRAT Summary]
| Parameter | Value |
| Trust Name | Caldwell 2023 Securities GRAT ("GRAT A") |
| Grantor | Jonathan R. Caldwell |
| Grantor Date of Birth | March 14, 1956 |
| Grantor Age at Funding | 67 |
| Trustee (During Annuity Term) | Jonathan R. Caldwell |
| Remainder Beneficiary | Caldwell Family Dynasty Trust |
| Institutional Co-Trustee of Remainder Beneficiary | Northgate Trust Company of Delaware |
| Co-Trustee of Remainder Beneficiary (Individual) | Thomas R. Caldwell |
| Trust Agreement Date | April 15, 2023 |
| Funding Date | April 15, 2023 |
| Corpus at Funding (Fair Market Value) | $60,000,000 |
| Asset Type | Publicly traded securities |
| GRAT Term | 2 years |
| Applicable § 7520 Rate (March 2023) | 5.0% |
| Annuity Type | Fixed annuity (zeroed-out under IRC § 2702) |
| Annual Annuity Payment | $32,195,122 |
| Total Annuity Stream (2 payments) | $64,390,244 |
| Taxable Gift Value | $0 (zeroed-out) |
| Governing Law | New York |
| Prepared By | Sylvia Hartwell, Calderwood & Harkness LLP |
| Verified By | Sylvia Hartwell, Specialist Partner (Tax), Calderwood & Harkness LLP |
| C&H Matter No. | 1034-00004 |
| C&H Billing Code | 78412-JRC |
[sheet: Zeroed-Out Computation]
| Line Item | Reference | Value |
| Fair Market Value of Property Transferred | Schedule A | $60,000,000.00 |
| GRAT Term (years) | Trust Agreement, Art. II | 2 |
| Applicable § 7520 Rate | IRS Rev. Rul. (March 2023) | 5.0% |
| Annuity Payment Frequency | Trust Agreement, Art. III | Annual |
| Payment Timing | Trust Agreement, Art. III | End of period |
Present Value Annuity Factor Calculation:
| Discount factor Year 1: 1 / (1 + 0.05)^1 | § 7520 / IRS Table B | 0.952381 |
| Discount factor Year 2: 1 / (1 + 0.05)^2 | § 7520 / IRS Table B | 0.907029 |
| Sum of discount factors (annuity factor, 2-yr term at 5.0%) | Table B | 1.859410 |
Required Annual Annuity to Zero Out:
Annual Annuity = FMV / Annuity Factor
Verification — Present Value of Annuity Stream:
| PV of Payment 1: $32,195,122 × 0.952381 | $30,662,021 |
| PV of Payment 2: $32,195,122 × 0.907029 | $29,337,979 |
| Total PV of Annuity Payments | $60,000,000 |
Value of Remainder Interest:
| FMV of Corpus | $60,000,000 | |
| Less: PV of Retained Annuity Interest | ($60,000,000) | |
| Taxable Gift (Remainder Interest Value) | IRC § 2702 | $0 |
Mortality Adjustment:
| Grantor Age at Funding | 67 | |
| Probability of Survival Through Term (2 years) per IRS Table 2000CM | IRS Table 2000CM | Assumed per actuarial tables; no adjustment required for zeroed-out GRAT per Walton v. Commissioner |
Note: Under Treas. Reg. § 25.2702-3(e), if the grantor dies during the GRAT term, the annuity payments cease and the trust corpus is included in the grantor's estate under IRC § 2036.
[sheet: Annuity Payment Schedule]
| Payment No. | Payment Due Date | Annual Annuity Payment | Cumulative Annuity Payments | Remaining GRAT Term After Payment | Notes |
| 1 | April 15, 2024 | $32,195,122 | $32,195,122 | 1 year remaining | First annuity payment; payable in cash or in kind (substitute assets of equivalent FMV permitted under Trust Agreement Art. III) |
| 2 | April 15, 2025 | $32,195,122 | $64,390,244 | Term ends; remainder distributes | Final annuity payment; upon payment, GRAT term concludes and remainder interest passes to Caldwell Family Dynasty Trust |
| Total | $64,390,244 | $64,390,244 | Sum of all annuity payments over the 2-year GRAT term |
[sheet: Illustrative Trust Accounting]
| Period | Date | Beginning Balance | Assumed Growth at § 7520 Rate (5.0%) | End-of-Period Balance Before Payment | Annuity Payment | Ending Balance After Payment |
| Year 1 | April 15, 2023 – April 15, 2024 | $60,000,000 | $3,000,000 | $63,000,000 | ($32,195,122) | $30,804,878 |
| Year 2 | April 15, 2024 – April 15, 2025 | $30,804,878 | $1,540,244 | $32,345,122 | ($32,195,122) | $150,000 |
| Remainder to Dynasty Trust | April 15, 2025 | $150,000 | ||||
| Note: | The small positive remainder ($150,000) reflects rounding in the annuity calculation; the GRAT is structured as zeroed-out with a de minimis or $0 taxable gift per IRC § 2702. Actual remainder will depend on actual investment performance vs. the 5.0% § 7520 hurdle rate. | |||||
| Note: | If actual returns exceed 5.0%, the excess appreciation passes to the Caldwell Family Dynasty Trust free of gift and estate tax. | |||||
| Note: | If actual returns are below 5.0%, the trust corpus may be insufficient to make all annuity payments; shortfall returns to the grantor (no wealth transfer achieved). |
[sheet: Key Terms and Conditions]
| Provision | Description |
| Annuity Amount | $32,195,122 per year, fixed for the 2-year term; not subject to adjustment |
| Payment Dates | Annual payments due on April 15 of each year (April 15, 2024 and April 15, 2025) |
| Form of Payment | Annuity may be paid in cash, in kind (by distributing trust assets at then-current FMV), or a combination thereof, at the Trustee's discretion |
| Substitution Power | Grantor retains the power to substitute assets of equivalent fair market value for trust assets, exercisable in a non-fiduciary capacity (grantor trust status maintained under IRC § 675(4)(C)) |
| Late Payment | If annuity payment is not made by the due date, the Trustee must pay the shortfall plus interest at the § 7520 rate from the due date to the date of actual payment |
| Exhaustion of Trust | If the trust corpus is insufficient to satisfy an annuity payment, the Trustee must distribute all remaining trust assets to the Grantor, and the trust terminates |
| Mortality Contingency | If the Grantor (Jonathan R. Caldwell) dies during the GRAT term, the remaining annuity payments cease, and the trust corpus is includible in the Grantor's gross estate under IRC § 2036 |
| Remainder Distribution | Upon payment of the final annuity (April 15, 2025), any remaining trust corpus is distributed to the Caldwell Family Dynasty Trust (Northgate Trust Company of Delaware and Thomas R. Caldwell, co-trustees) |
| Grantor Trust Status | GRAT A is treated as a grantor trust for income tax purposes under IRC §§ 671–679 during the entire annuity term; all income, gains, and losses are reported on the Grantor's individual income tax return |
| Prohibition on Additional Contributions | No additional contributions may be made to GRAT A after the initial funding date of April 15, 2023 |
| Assignment / Commutation Prohibition | The Grantor's annuity interest may not be commuted, prepaid, or assigned to any person other than the Grantor's estate |
| Governing Law | New York |
[sheet: Preparer Certification]
| Field | Detail |
| Document Title | Caldwell 2023 Securities GRAT — Annuity Payment Schedule |
| GRAT Name | Caldwell 2023 Securities GRAT (GRAT A) |
| Grantor | Jonathan R. Caldwell (SSN: XXX-XX-4781) |
| Corpus at Funding | $60,000,000 |
| § 7520 Rate Applied | 5.0% (March 2023) |
| Annuity per Year | $32,195,122 |
| Number of Payments | 2 |
| Total Annuity Stream | $64,390,244 |
| Taxable Gift | $0 (zeroed-out under IRC § 2702) |
| Prepared By | Elliot Nguyen, Associate, Calderwood & Harkness LLP |
| Reviewed and Verified By | Sylvia Hartwell, Specialist Partner (Tax), Calderwood & Harkness LLP |
| Date of Verification | April 15, 2023 |
| C&H Matter No. | 1034-00004 |
| C&H Billing Code | 78412-JRC |
| Coordinated With | Strathmore Corporation & Greaves LLP (Martin J. Prescott, CPA) — for Form 709 reporting |
| Appraisal Reference | N/A — publicly traded securities valued at closing market prices on April 15, 2023 per Schedule A |
| Calderwood & Harkness LLP Address | 375 Park Avenue, 42nd Floor, New York, NY 10152 |