The IRS discount rate floats monthly. In addition, one can choose to use the discount rate for the month of a planned gift or for either of the two months prior to a planned gift to calculate the deduction available to its donor. Depending on the type of planned gift made, the discount rate may have significant, little, or no effect on the deduction calculated. Understanding the influence of the discount rate on the deduction earned by each kind of planned gift will allow you to choose the best rate in each case.

Charitable remainder annuity trusts: The discount rate affects the deduction significantly. The higher the discount rate, the higher the deduction calculated. In general, choose the highest rate available.

Charitable remainder unitrusts: The discount rate affects the deduction only slightly. The higher the discount rate, the higher the deduction calculated. In general, choose the highest rate available.

Pooled income funds: The discount rate does not affect the deduction for gifts to funds that are three or more taxable years old. For funds less than three taxable years old, the discount rate influences the annual average rate that is mandated for gifts to these funds, but is not used directly in the deduction calculation.

Gift annuities: The discount rate affects the deduction significantly. The higher the discount rate, the higher the deduction calculated, but the lower the amount of tax-free income that will be received as part of each year's annuity payments. It is best to inform the donor of this tradeoff and if she indicates a preference for the deduction, choose the highest available rate; if she indicates a preference for tax-free income, choose the lowest available rate.

Retained life estates: The discount rate affects the deduction significantly. The lower the discount rate, the higher the deduction calculated. In general, choose the lowest rate available.

Charitable lead annuity trusts: The discount rate affects the deduction significantly. The lower the discount rate, the higher the deduction calculated. In general, choose the lowest rate available.

Charitable lead unitrusts: The discount rate affects the deduction only slightly. The lower the discount rate, the higher the deduction calculated. In general, choose the lowest rate available.