April 7520 Rate Dips to 3.4%

April 7520 Rate Dips to 3.4%

News story posted in Revenue Rulings on 19 March 2008| 4 comments
audience: National Publication | last updated: 18 May 2011
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Summary

For purposes of determining the present value of an annuity, an interest for life or a term of years, or a remainder or a reversionary interest, Revenue Ruling 2008-20 indicates the applicable federal rate under section 7520 for April 2008 is 3.4%; down 0.2% from the March rate of 3.6% and down 0.8% from the February rate of 4.2%.
Rev. Rul. 2008-20; 2008-14 IRB 1

Full Text:

Mar. 18, 2008


Part I

Section 1274.--Determination of Issue Price in the Case of Certain
Debt Instruments Issued for Property

(Also Sections 42, 280G, 382, 412, 467, 468, 482, 483, 642, 807, 846,
1288, 7520, 7872.)


This revenue ruling provides various prescribed rates for federal income tax purposes for April 2008 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable federal rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code. Table 2 contains the short-term, mid-term, and long-term adjusted applicable federal rates (adjusted AFR) for the current month for purposes of section 1288(b). Table 3 sets forth the adjusted federal long-term rate and the long-term tax-exempt rate described in section 382(f). Table 4 contains the appropriate percentages for determining the low-income housing credit described in section 42(b)(2) for buildings placed in service during the current month. Finally, Table 5 contains the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520.

REV. RUL. 2008-20 TABLE 1
                Applicable Federal Rates (AFR) for April 2008
                                            Period for Compounding
                                            ______________________
                                     Annual   Semiannual   Quarterly   Monthly
                                     ______   __________   _________   _______
                                                    Short-term
                                                    __________
 AFR                                  1.85%      1.84%        1.84%     1.83%
 110% AFR                             2.03%      2.02%        2.01%     2.01%
 120% AFR                             2.22%      2.21%        2.20%     2.20%
 130% AFR                             2.40%      2.39%        2.38%     2.38%
                                                     Mid-term
                                                     ________
 AFR                                  2.87%      2.85%        2.84%     2.83%
 110% AFR                             3.16%      3.14%        3.13%     3.12%
 120% AFR                             3.45%      3.42%        3.41%     3.40%
 130% AFR                             3.74%      3.71%        3.69%     3.68%
 150% AFR                             4.33%      4.28%        4.26%     4.24%
 175% AFR                             5.05%      4.99%        4.96%     4.94%
                                                      Long-term
                                                      _________
 AFR                                  4.40%      4.35%        4.33%     4.31%
 110% AFR                             4.85%      4.79%        4.76%     4.74%
 120% AFR                             5.29%      5.22%        5.19%     5.16%
 130% AFR                             5.74%      5.66%        5.62%     5.59%
 REV. RUL. 2008-20 TABLE 2
                         Adjusted AFR for April 2008
                                              Period for Compounding
                                              ______________________
                                     Annual   Semiannual   Quarterly   Monthly
                                     ______   __________   _________   _______
 Short-term
 adjusted AFR                         1.99%       1.98%       1.98%     1.97%
 Mid-term
 adjusted AFR                         3.28%       3.25%       3.24%     3.23%
 Long-term
 adjusted AFR                         4.55%       4.50%       4.47%     4.46%
 REV. RUL. 2008-20 TABLE 3
                   Rates Under Section 382 for April 2008
 Adjusted federal long-term rate for the current month                  4.55%
 Long-term tax-exempt rate for ownership changes during the
 current month (the highest of the adjusted federal long-term
 rates for the current month and the prior two months.)                 4.55%
 REV. RUL. 2008-20  TABLE 4
        Appropriate Percentages Under Section 42(b)(2) for April 2008
 Appropriate percentage for the 70% present value low-income
 housing credit                                                         7.84%
 Appropriate percentage for the 30% present value low-income
 housing credit                                                         3.36%
                          REV. RUL. 2008-20 TABLE 5
                   Rate Under Section 7520 for April 2008
 Applicable federal rate for determining the present value of an
 annuity, an interest for life or a term of years, or a remainder or
 reversionary interest                                                  3.4%

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