Cal. Code Regs. tit. 18 § 13952.6
Where the present value of an annuity actually exceeds the amount of the property or fund out of which the annuity is to be paid the present value of the annuity is the amount of the property or fund. This regulation may be illustrated by the following example:
EXAMPLE.
A bequeaths to B, a female, a life annuity of $5,000 per year, payable out of a fund totaling $35,000. B is 65 years of age at A's death. Computed in accordance with 13952-13954(b), the present value of an annuity of $5,000 per year for the life of a female of the age of 65 is $46,503 ($5,000 x 9.3005 = $46,503). Since this exceeds the annuity fund of $35,000, the latter figure will represent the present value of B's annuity.
NOTE: Reference: Section 13952, Revenue and Taxation Code.
Cal. Code Regs. Tit. 18, § 13952.6