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 2008-11 indicates the applicable federal rate under section 7520 for March 2008 is 3.6%; down 0.6% from the February rate of 4.2% and down 0.8% from the January rate of 4.4%. Note: The original announcement by IRS incorrectly stated the March 7520 rate at 4.0%

Full Text: 

Feb. 21, 2008

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 March 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.

             Applicable Federal Rates (AFR) for March 2008

                        Period for Compounding

               Annual    Semiannual         Quarterly    Monthly

Short-term

 AFR            2.25%     2.24%               2.23%       2.23%
 110% AFR       2.48%     2.46%               2.45%       2.45%
 120% AFR       2.71%     2.69%               2.68%       2.68%
 130% AFR       2.93%     2.91%               2.90%       2.89%

Mid-term

 AFR            2.97%     2.95%               2.94%       2.93%
 110% AFR       3.28%     3.25%               3.24%       3.23%
 120% AFR       3.57%     3.54%               3.52%       3.51%
 130% AFR       3.88%     3.84%               3.82%       3.81%
 150% AFR       4.48%     4.43%               4.41%       4.39%
 175% AFR       5.23%     5.16%               5.13%       5.11%

Long-term

 AFR            4.27%     4.23%               4.21%       4.19%
 110% AFR       4.70%     4.65%               4.62%       4.61%
 120% AFR       5.14%     5.08%               5.05%       5.03%
 130% AFR       5.58%     5.50%               5.46%       5.44%

 REV. RUL. 2008-11 TABLE 2

                      Adjusted AFR for March 2008

                        Period for Compounding

                Annual         Semiannual         Quarterly    Monthly

 Short-term
 adjusted AFR   2.12%          2.11%                 2.10%      2.10%

 Mid-term
 adjusted AFR   2.93%          2.91%                 2.90%      2.89%

 Long-term
 Adjusted AFR   4.11%          4.07%                 4.05%      4.04%

 REV. RUL. 2008-11 TABLE 3

                Rates Under Section 382 for March 2008

 Adjusted federal long-term rate for the current month           4.11%

 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.)          4.25%

 REV. RUL. 2008-11 TABLE 4

     Appropriate Percentages Under Section 42(b)(2) for March 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. 2008-11 TABLE 5

                Rate Under Section 7520 for March 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                               3.6%