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
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%
Comments
AFR drops to AFR - CRAT traps
Vaughn W. Henry
Springfield, IL 62703
217.529.1958 voice
217.529.1959 fax
(gift-estate.com)
Effect of AFR on PVR and 5% Probability Test
yes, I have
A CRAT paying the minimum five percent will fail the "probability of exhaustion test" for a donor aged 62 or younger.
Russell A. Willis III, J.D., LL.M. 5158 Waterman Blvd. (Rear) St. Louis, MO 63108 314.566.3386, rawillis3@juno.com Charitable Planned Gift Design Services https://www.charitableplanning.com
Remember the option to use previous 2 months