Rev. Rul. 96-23
1996-1 C.B. 198, 1996-15 I.R.B. 10

INTERNAL REVENUE SERVICE
Revenue Ruling

SPECIAL USE VALUE; FARMS; INTEREST RATES

Published: April 8, 1996

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 1996 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 loans under the Farm Credit Bank system. This revenue ruling also contains a list of the states within each Farm Credit Bank District.

Under § 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 § 2032A. The rates in this revenue ruling may be used by estates that value farmland under § 2032A as of a date in 1996.

Average annual effective interest rates, calculated in accordance with § 2032A(e)(7)(A) and § 20.2032A-4(e) of the Estate Tax Regulations, to be used under § 2032A(e)(7)(A)(ii), are set forth in the accompanying Table of Interest Rates (Table 1). The states within each Farm Credit Bank District are set forth in the accompanying Table of Farm Credit Bank Districts (Table 2).

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 1995 are in Rev. Rul. 95-38, 1995-1 C.B. 184. For rate information for years prior to 1995, see Rev. Rul. 94-33, 1994-1 C.B. 235, and other revenue rulings that are cited therein.

DRAFTING INFORMATION

The principal author of this revenue ruling is Lane Damazo of the Office of Assistant Chief Counsel (Passthroughs and Special Industries). For further information regarding this revenue ruling, contact Lane Damazo on (202) 622- 3090 (not a toll-free call).

REV. RUL. 96-23 TABLE 1
TABLE OF INTEREST RATES
(Year of Valuation 1996)

Farm Credit Bank District in which property is located Interest rate
Baltimore 8.98
Columbia 8.98
Omaha 8.38
Sacramento 9.28
St. Paul 8.73
Spokane 8.48
Springfield 8.59
Texas 8.86
Wichita 8.44

REV. RUL. 96-23 TABLE 2
TABLE OF FARM CREDIT BANK DISTRICTS

Bank Districts States
Columbia Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, Pennsylvania, South Carolina, Virginia, West Virginia.
Omaha Iowa, Nebraska, South Dakota, Wyoming.
Sacramento Arizona, California, Hawaii, Nevada, Utah.
St. Paul Arkansas, Illinois, Indiana, Kentucky, Michigan, Minnesota, Missouri, North Dakota, Ohio, Tennessee, Wisconsin.
Spokane Alaska, Idaho, Montana, Oregon, Washington.
Springfield Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont.
Texas Alabama, Louisiana, Mississippi, Texas.
Wichita Colorado, Kansas, New Mexico, Oklahoma.

Rev. Rul. 96-23, 1996-1 C.B. 198, 1996-15 I.R.B. 10