Rev. Rul. 89-58
1989-1 C.B. 275, 1989-17 I.R.B. 6.
Internal Revenue Service
Revenue Ruling
SPECIAL USE VALUE; FARMS: INTEREST RATES
Published: April 24, 1989
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 1989 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 Farm Credit Bank loans. Prior to 1988, the Farm Credit Banks were known as Federal Land Banks. As a result of the Agriculture Credit Act of 1987, Pub. L. No. 100-233, each Federal Land Bank merged into a newly created Farm Credit Bank.
Under section 2032A(e)(7)(A)(ii) of the Internal Revenue Code, rates on new Farm Credit 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 Farm Credit Bank District. The rates in this revenue ruling may be used by estates that value farmland under section 2032A as of a date in 1989.
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 set forth in the accompanying Table of Interest Rates. The states within each Farm Credit Bank District are set forth in the accompanying Table of Farm Credit Bank Districts.
Rev. Rul. 81-170, 1981-1 C.B. 454, contains an illustrative computation of an average annual effective interest rate. The rates applicable for valuation in 1988 are in Rev. Rul. 88-59, 1988-28 I.R.B. 22. For rate information for years prior to 1988, see the citations in Rev. Rul. 88-59.
DRAFTING INFORMATION
The principal author of this revenue ruling is Lane Damazo of the Office of the Assistant Chief Counsel (Passthroughs and Special Industries). For further information regarding this revenue ruling contact Lane Damazo on (202) 535- 9509 (not a toll-free call).
REV. RUL. 89-58 TABLE 1
TABLE OF INTEREST RATES
(Year of Valuation 1989)
Farm Credit Bank District in which property is located
Baltimore 11.44
Columbia 11.76
Jackson 11.60
Louisville 12.28
Omaha 12.07
Sacramento 12.03
St. Louis 11.50
St. Paul 11.87
Spokane 11.79
Springfield 11.66
Texas 11.09
Wichita 11.74
REV. RUL. 89-58 TABLE 2
TABLE OF FARM CREDIT BANK DISTRICTS
District States
________ ______
Baltimore Delaware, District of Columbia, Maryland,
Pennsylvania, Virginia, West Virginia.
Columbia Florida, Georgia, North Carolina, South Carolina.
Jackson Alabama, Louisiana, Mississippi.
Louisville Indiana, Kentucky, Ohio, Tennessee.
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.
Texas Texas.
Wichita Colorado, Kansas, New Mexico, Oklahoma.
Rev. Rul. 89-58, 1989-1 C.B. 275, 1989-17 I.R.B. 6.