Rev. Rul. 89-34

1989-1 C.B. 263, 1989-10 I.R.B. 7.

                       Internal Revenue Service

                                 Revenue Ruling

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

                          AND THE LONG-TERM EXEMPT RATE

                          Published: February 22, 1989

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 section 1274, 1288, 382, and other sections of the Code, tables set forth the rates for March 1989.

  The Internal Revenue Service today announced the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate, and the low- income housing credit appropriate percentages for March 1989.

  The rates are published monthly for purposes of sections 1274, 1288, 382, 42, and various other sections of the Internal Revenue Code.

  Revenue Ruling 89-34, setting forth the March rates, is attached and will be published in the Internal Revenue Bulletin No. 1989-10, dated March 6, 1989.

  This revenue ruling provides various prescribed rates for federal income tax purposes for March 1989 (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. 89-34 TABLE 1
    Applicable Federal Rates (AFR) for March 1989
                     Period for Compounding
            Annual  Semiannual    Quarterly   Monthly
Short-Term
       AFR   9.30%        9.09%        8.99%    8.92%
  110% AFR  10.25%       10.00%        9.88%    9.80%
  120% AFR  11.21%       10.91%       10.77%   10.67%
  Mid-Term
       AFR   9.31%        9.10%        9.00%    8.93%
  110% AFR  10.26%       10.01%        9.89%    9.81%
  120% AFR  11.22%       10.92%       10.77%   10.68%
Long-Term
       AFR   9.14%        8.94%        8.84%    8.78%
  110% AFR  10.07%        9.83%        9.71%    9.63%
  120% AFR  11.02%       10.73%       10.59%   10.50%

                REV. RUL. 89-34 TABLE 2
              Adjusted AFR for March 1989
                       Period for Compounding
              Annual  Semiannual    Quarterly   Monthly
  Short-term
adjusted AFR   6.07%        5.98%        5.94%    5.91%
    Mid-term
adjusted AFR   6.43%        6.33%        6.28%    6.25%
   Long-term
adjusted AFR   7.03%        6.91%        6.85%    6.81%

                  REV. RUL. 89-34 TABLE 3
           Rates Under Section 382 for March 1989
Adjusted federal long-term rate for the current month  7.03%
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).                                     7.29%

                    REV. RUL. 89-34 TABLE 4
Appropriate Percentages Under Section 42(b)(2) for March 1989
Appropriate percentage for the 70% present
value low-income housing credit                           9.19%
Appropriate percentage for the 30% present
value low-income housing credit                           3.94%

Rev. Rul. 89-34, 1989-1 C.B. 263, 1989-10 I.R.B. 7.