Rev. Rul. 86-85
1986-1 C.B. 299, 1986-26 I.R.B. 5.
Internal Revenue Service
Revenue Ruling
SPECIAL USE VALUE; FARMS; INTEREST RATES
Published: June 30, 1986
Section 2032A.-Valuation of Certain Farm, etc., Real Property, 26 CFR 20.2032A-
4: Method of valuing farm real property
Special use value; farms; interest rates. The 1986 interest rates to be used in computing the special use value of farm real property for which an election is made under section 2032A of the Code are listed for estates of decedents.
This revenue ruling contains a list of the average annual effective interest rates on new Federal Land Bank loans. Under section 2032A(e)(7)(A)(ii) of the Internal Revenue Code, rates on new Federal Land Bank loans are used in computing the special use value of real property used as a farm for which an election is made under section 2032A. This revenue ruling also contains a list of the states within each land bank district. The rates in this revenue ruling may be used by estates that value farmland under section 2032A as of a date in
1986.
Average annual effective interest rates, calculated in accordance with section 2032A(e)(7)(A) of the Code and section 20.2032A-4(e) of the Estate Tax Regulations, to be used under section 2032A(e)(7)(A)(ii) are as follows:
Federal Land Bank District Year of valuation
in which property is located 1986
Baltimore ..................................... 12.82
Columbia ...................................... 12.14
Texas (Formerly Houston) ...................... 11.71
Louisville .................................... 12.86
Jackson (Formerly New Orleans) ................ 12.30
Omaha ......................................... 12.99
Sacramento .................................... 12.31
St. Louis ..................................... 12.65
St. Paul ...................................... 12.46
Spokane ....................................... 12.51
Springfield ................................... 12.20
Wichita ....................................... 12.77
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Federal Land Bank District:
District States
Baltimore ........................ Delaware, District of Columbia,
Maryland, Pennsylvania, Virginia
West Virginia.
Columbia ............................. Florida, Georgia, North
Carolina, South Carolina
Texas ......................................... Texas.
Louisville ........................... Indiana, Kentucky, Ohio,
Tennessee.
Jackson .......................... Alabama, Louisiana, Mississippi.
Omaha ............................. Iowa, Nebraska, South Dakota,
Wyoming.
Sacramento ......................... Arizona, California, Hawaii,
Nevada, Utah.
St. Louis ......................... Arkansas, Illinois, Missouri.
St. Paul ........................ Michigan, Minnesota, North Dakota,
Wisconsin.
Spokane .......................... Alaska, Idaho, Montana, Oregon,
Washington.
Springfield ..................... Connecticut, Maine, Massachusetts,
New Hampshire, New Jersey, New
York, Rhode Island, Vermont
Wichita ........................... Colorado, Kansas, New Mexico,
Oklahoma.
Rev. Rul. 81-170, 1981-1 C.B. 454, which sets forth rates for several prior years, contains an illustrative computation of an average annual effective interest rate. The rates applicable in the case of valuations for 1982 are listed in Rev. Rul. 82-104, 1982-1 C.B. 129. The rates applicable in the case of valuations for 1983 are listed in Rev. Rul. 83-71, 1983-1 C.B. 227. The rates applicable in the case of valuations for 1984 are listed in Rev. Rul.
84-119, 1984-2 C.B. 193, and for valuations in 1985 in Rev. Rul. 85-92. 1985-2 C.B. 198.
Rev. Rul. 86-85, 1986-1 C.B. 299, 1986-26 I.R.B. 5.