October 7520 Rate Drops to Historic Low

Rev. Rul. 2011-22; 2011-41 I.R.B. 1

Full Text:

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 2011 (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)(1) for buildings placed in service during the current month. However, under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, and before December 31, 2013, shall not be less than 9%. 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. 2011-22 TABLE 1
            Applicable Federal Rates (AFR) for October 2011
 _____________________________________________________________________

                                   Period for Compounding
                         _____________________________________________

                         Annual    Semiannual   Quarterly   Monthly
 _____________________________________________________________________

                                    Short-term

      AFR                 .16%        .16%        .16%        .16%
      110% AFR            .18%        .18%        .18%        .18%
      120% AFR            .19%        .19%        .19%        .19%
      130% AFR            .21%        .21%        .21%        .21%

                                    Mid-term

      AFR                1.19%       1.19%       1.19%       1.19%
      110% AFR           1.31%       1.31%       1.31%       1.31%
      120% AFR           1.44%       1.43%       1.43%       1.43%
      130% AFR           1.56%       1.55%       1.55%       1.55%
      150% AFR           1.80%       1.79%       1.79%       1.78%
      175% AFR           2.09%       2.08%       2.07%       2.07%

                                    Long-term

      AFR                2.95%       2.93%       2.92%       2.91%
      110% AFR           3.25%       3.22%       3.21%       3.20%
      120% AFR           3.55%       3.52%       3.50%       3.49%
      130% AFR           3.85%       3.81%       3.79%       3.78%

                       REV. RUL. 2011-22 TABLE 2

                     Adjusted AFR for October 2011
 _____________________________________________________________________

                                    Period for Compounding
                         _____________________________________________

                         Annual    Semiannual   Quarterly    Monthly
 _____________________________________________________________________

      Short-term
      adjusted AFR        .32%        .32%        .32%        .32%

      Mid-term
      adjusted AFR       1.27%       1.27%       1.27%       1.27%

      Long-term
      adjusted AFR       3.51%       3.48%       3.46%       3.46%

                       REV. RUL. 2011-22 TABLE

               Rates Under Section 382 for October 2011
 _____________________________________________________________________

      Adjusted federal long-term rate for the current month  3.51%

      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.)                                 3.82%

                       REV. RUL. 2011-22 TABLE 4
    Appropriate Percentages Under Section 42(b)(1) for October 2011
 ______________________________________________________________________

      Note: Under Section 42(b)(2), the applicable percentage
      for non-federally subsidized new buildings placed in
      service after July  30, 2008, and before December 31,
      2013, shall not be less than 9%.

      Appropriate percentage for the 70% present value
      low-income housing credit                              7.48%

      Appropriate percentage for the 30% present value
      low-income housing credit                              3.20%

                       REV. RUL. 2011-22 TABLE 5
               Rate Under Section 7520 for October 2011
 _____________________________________________________________________

      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       1.4%