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 2008-49 indicates the applicable federal rate under section 7520 for October 2008 is 3.8%; down 0.4% from the September and August rates of 4.2%.
Rev. Rul. 2008-49; 2008-40 IRB 1
Full Text:
September 17, 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 October 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. 2008-49 TABLE 1 Applicable Federal Rates (AFR) for October 2008 Period for Compounding Annual Semiannual Quarterly Monthly Short-term AFR 2.19% 2.18% 2.17% 2.17% 110% AFR 2.41% 2.40% 2.39% 2.39% 120% AFR 2.64% 2.62% 2.61% 2.61% 130% AFR 2.85% 2.83% 2.82% 2.81% Mid-term AFR 3.16% 3.14% 3.13% 3.12% 110% AFR 3.48% 3.45% 3.44% 3.43% 120% AFR 3.81% 3.77% 3.75% 3.74% 130% AFR 4.12% 4.08% 4.06% 4.05% 150% AFR 4.77% 4.71% 4.68% 4.66% 175% AFR 5.58% 5.50% 5.46% 5.44% Long-term AFR 4.32% 4.27% 4.25% 4.23% 110% AFR 4.76% 4.70% 4.67% 4.65% 120% AFR 5.19% 5.12% 5.09% 5.07% 130% AFR 5.63% 5.55% 5.51% 5.49% REV. RUL. 2008-49 TABLE 2 Adjusted AFR for October 2008 Period for Compounding Annual Semiannual Quarterly Monthly Short-term adjusted AFR 1.75% 1.74% 1.74% 1.73% Mid-term adjusted AFR 2.97% 2.95% 2.94% 2.93% Long-term adjusted AFR 4.45% 4.40% 4.38% 4.36% REV. RUL. 2008-49 TABLE 3 Rates Under Section 382 for October 2008 Adjusted federal long-term rate for the current month 4.45% 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.) 4.65% REV. RUL. 2008-49 TABLE 4 Appropriate Percentages Under Section 42(b)(2) for October 2008 Appropriate percentage for the 70% present value low-income housing credit 7.87% Appropriate percentage for the 30% present value low-income housing credit 3.37% REV. RUL. 2008-49 TABLE 5 Rate Under Section 7520 for October 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 3.8%
