Twins Steve and Sally each set up $100,000 gift annuities today. They each receive a charitable deduction of $40,000, the present value of the remainder interest. Steve passes away next week, before his first annuity payment is made. The charity withdraws the residuum of $100,000 from its annuity reserve account. Sally lives to the age of 95 and the charity receives a $35,000 residuum.