Rev. Rul. 88-9

1988-1 C.B. 307, 1988-5 I.R.B. 1.

                       Internal Revenue Service

                                 Revenue Ruling

     FEDERAL RATES; ADJUSTED FEDERAL RATES; ADJUSTED FEDERAL LONG-TERM RATE,

                          AND THE LONG-TERM EXEMPT RATE

                          Published: February 1, 1988

Section 1274 -- Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property

(Also Sections 42, 280G, 382, 467, 468, 483, 1288, 7872.)

  Federal rates; adjusted federal rates; adjusted federal long-term rate, and the long-term exempt rate. For purposes of sections 1274, 1288, 382, and other sections of the Code, tables set forth the rates for February 1988.

  This revenue ruling provides various prescribed rates for federal income tax purposes for February 1988 (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). Finally, 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.

                 REV. RUL. 88-9 TABLE 1
    Applicable Federal Rates (AFR) for February 1988
                 Period for Compounding
               Annual    Semiannual  Quarterly  Monthly
  Short-Term
         AFR      7.61%       7.47%      7.40%     7.36%
    110% AFR      8.39%       8.22%      8.14%     8.08%
    120% AFR      9.16%       8.96%      8.86%     8.80%
    Mid-Term
         AFR      8.73%       8.55%      8.46%     8.40%
    110% AFR      9.63%       9.41%      9.30%     9.23%
    120% AFR     10.52%      10.26%     10.13%    10.05%
   Long-Term
         AFR      9.17%       8.97%      8.87%     8.81%
    110% AFR     10.11%       9.87%      9.75%     9.67%
    120% AFR     11.05%      10.76%     10.62%    10.53%
                 REV. RUL. 88-9 TABLE 2
             Adjusted AFR for February 1988
                 Period for Compounding
               Annual    Semiannual  Quarterly  Monthly
  Short-term
adjusted AFR      5.47%       5.40%      5.36%     5.34%
    Mid-term
adjusted AFR      6.20%       6.11%      6.06%     6.03%
   Long-term
adjusted AFR      7.47%       7.34%      7.27%     7.23%

                    REV. RUL. 88-9 TABLE 3
          Rates Under Section 382 for February 1988
Adjusted federal long-term rate for the current month    7.47%
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).                                 8.04%
                    REV. RUL. 88-9 TABLE 4
        Appropriate Percentages Under Section 42(b)(2)
                      for February 1988
70% present value low-income housing credit              9.12%
30% present value low-income housing credit              3.91%

Rev. Rul. 88-9, 1988-1 C.B. 307, 1988-5 I.R.B. 1.