REVENUE RULE 96-6
1996-1 C.B. 181, 1996-2 I.R.B. 8
Internal Revenue Service
Revenue Rule
FEDERAL RATES; ADJUSTED FEDERAL RATES; ADJUSTED FEDERAL LONG-TERM RATE, AND THE LONG TERM EXEMPT RATE
Released: December 20, 1995
Published: January 8, 1996
See Also,
Section 42.--Low-Income Housing Credit
Section 280G.--Golden Parachute Payments
Section 382.--Limitation on Net Operating Loss Carryforwards and Certain Built- In Losses
Following Ownership Change
Section 412.--Minimum Funding Standards
Section 467.--Certain Payments for the Use of Property or Services
Section 468.--Special Rules for Mining and Solid Waste Reclamation and Closing Costs
Section 483.--Interest on Certain Deferred Payments
Section 807.--Rules for Certain Reserves.
Section 846.--Discounted Unpaid Losses Defined
Section 1274.--Determination of Issue Price in the Case of Certain Debt Instruments Issued
for Property
Section 1288.--Treatment of Original Issue Discount on Tax-Exempt Obligations
Section 7520.--Valuation Tables
Section 7872.--Treatment of Loans with Below-Market Interest Rates
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 January 1996.
This revenue ruling provides various prescribed rates for federal income tax purposes for January 1996 (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). 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. Finally, Table 5 contains the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520.
Rev. Rul. 95-79, 1995-49 I.R.B. 4, which set forth the applicable federal rates and various other rates for December 1995, incorrectly provided in Table 1 that the Long-Term 120% Applicable Federal Rate based on annual compounding was 7.01%. The correct percentage is 7.65%. This correction was made to Rev. Rul. 95-79,in 1995-2 C.B. 134.
Rev. Rul. 96-6 TABLE 1
Applicable Federal Rates (AFR) for January 1996
Period for Compounding
Short-Term
| Annual | Semiannual | Quarterly | Monthly | ||
| AFR | 5.50% | 5.43% | 5.39% | 5.37% | |
| 110% | AFR | 6.06% | 5.97% | 5.93% | 5.90% |
| 120% | AFR | 6.63% | 6.52% | 6.47% | 6.43% |
Mid-Term
| Annual | Semiannual | Quarterly | Monthly | ||
| AFR | 5.73% | 5.65% | 5.61% | 5.58% | |
| 110% | AFR | 6.32% | 6.22% | 6.17% | 6.14% |
| 120% | AFR | 6.89% | 6.78% | 6.72% | 6.69% |
| 150% | AFR | 8.66% | 8.48% | 8.39% | 8.33% |
| 175% | AFR | 10.13% | 9.89% | 9.77% | 9.69% |
Long-Term
| Annual | Semiannual | Quarterly | Monthly | ||
| AFR | 6.19% | 6.10% | 6.05% | 6.02% | |
| 110% | AFR | 6.82% | 6.71% | 6.65% | 6.62% |
| 120% | AFR | 7.45% | 7.32% | 7.25% | 7.21% |
Rev. Rul. 96-6 TABLE 2
Adjusted AFR for January 1996
Period for Compounding
Short-term
| Annual | Semiannual | Quarterly | Monthly | ||
| Adjusted | AFR | 3.68% | 3.65% | 3.63% | 3.62% |
Mid-term adjusted
| Annual | Semiannual | Quarterly | Monthly | ||
| Adjusted | AFR | 4.37% | 4.32% | 4.30% | 4.28% |
Long-term
| Annual | Semiannual | Quarterly | Monthly | ||
| Adjusted | AFR | 5.31% | 5.24% | 5.21% | 5.18% |
Rev. Rul. 95-79 TABLE 3
Rates Under Section 382 for January 1996
Adjusted federal long-term rate for the current month 5.31%
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).
5.65%
Rev. Rul. 95-79 TABLE 4
Appropriate Percentages Under Section 42(b)(2) for January 1996
Appropriate percentage for the 70% present value low-income housing credit 8.40%
Appropriate percentage for the 30% present value low-income housing credut 3.60%
Rev. Rul. 96-6 TABLE 5
Rate Under Section 7520 for January 1996
Applicable federal rate for determining the present value of an annuity 6.8% an interest
for life or a term of years, or a remainder or reversionary interest 6.8%
Rev. Rul. 96-6, 1996-1 C.B. 181, 1996-2 I.R.B. 8