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 2008-4 indicates the applicable federal rate under section 7520 for January 2008 is 4.4%; down 0.6% from the December 2007 rate of 5.0% and down 0.8% from the November rate of 5.2%. In addition, the deemed rate of return for transfers during 2008 to pooled income funds that have been in existence for less than three taxable years is 4.8%.
Citations: Rev. Rul. 2008-4; 2008-3 IRB 1
Full Text:
Date: Dec. 19, 2007
Section 1274. -- Determination of Issue Price in the Case of
Certain Debt Instruments Issued for Property
This revenue ruling provides various prescribed rates for federal income tax purposes for January 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. 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. Finally, Table 6 contains the deemed rate of return for transfers made during calendar year 2008 to pooled income funds described in section 642(c)(5) that have been in existence for less than 3 taxable years immediately preceding the taxable year in which the transfer was made.
REV. RUL. 2008-4 TABLE 1
Applicable Federal Rates (AFR) for January 2008
Period for Compounding
Annual Semiannual Quarterly Monthly
Short-term
AFR 3.18% 3.16% 3.15% 3.14% 110% AFR 3.51% 3.48% 3.46% 3.46% 120% AFR 3.83% 3.79% 3.77% 3.76% 130% AFR 4.15% 4.11% 4.09% 4.08%
Mid-term
AFR 3.58% 3.55% 3.53% 3.52% 110% AFR 3.95% 3.91% 3.89% 3.88% 120% AFR 4.31% 4.26% 4.24% 4.22% 130% AFR 4.67% 4.62% 4.59% 4.58% 150% AFR 5.40% 5.33% 5.29% 5.27% 175% AFR 6.31% 6.21% 6.16% 6.13%
Long-term
AFR 4.46% 4.41% 4.39% 4.37% 110% AFR 4.91% 4.85% 4.82% 4.80% 120% AFR 5.36% 5.29% 5.26% 5.23% 130% AFR 5.81% 5.73% 5.69% 5.66%
REV. RUL. 2008-4 TABLE 2
Adjusted AFR for January 2008
Period for Compounding
Annual Semiannual Quarterly Monthly
Short-term
adjusted AFR 3.05% 3.03% 3.02% 3.01%
Mid-term adjusted AFR 3.39% 3.36% 3.35% 3.34%
Long-term adjusted AFR 4.25% 4.21% 4.19% 4.17%
REV. RUL. 2008-4 TABLE 3
Rates Under Section 382 for January 2008
Adjusted federal long-term rate for the current month 4.25%
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.) 4.34%
REV. RUL. 2008-4 TABLE 4
Appropriate Percentages Under Section 42(b)(2) for January 2008
Appropriate percentage for the 70% present value low-income housing credit 7.93%
Appropriate percentage for the 30% present value low-income housing credit 3.40%
REV. RUL. 2008-4 TABLE 5
Rate Under Section 7520 for January 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 4.4%
Rev. Rul. 2008-4 TABLE 6
Deemed Rate for Transfers to New Pooled Income Funds During 2008
Deemed rate of return for transfers during 2008 to pooled income funds that have been in existence for less than 3 taxable years 4.8%