January 19, 2011
Citations: Rev. Rul. 2012-7; 2012-6 IRB 1
The IRS has announced (Rev. Rul. 2012-7) the applicable federal interest rates for February 2012.
Section 1274. — Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property (Also Sections 42, 280G, 382, 412, 467, 468, 482, 483, 642, 807, 846, 1288, 7520, 7872.)
This revenue ruling provides various prescribed rates for federal income tax purposes for February 2012 (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)(1) for buildings placed in service during the current month. However, under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, and before December 31, 2013, shall not be less than 9%. 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. 2012-7 TABLE 1 Applicable Federal Rates (AFR) for February 2012
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Period for Compounding
Annual Semiannual Quarterly Monthly
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Short-term
AFR .19% .19% .19% .19%
110% AFR .21% .21% .21% .21%
120% AFR .23% .23% .23% .23%
130% AFR .25% .25% .25% .25%
Mid-term
AFR 1.12% 1.12% 1.12% 1.12%
110% AFR 1.23% 1.23% 1.23% 1.23%
120% AFR 1.34% 1.34% 1.34% 1.34%
130% AFR 1.47% 1.46% 1.46% 1.46%
150% AFR 1.69% 1.68% 1.68% 1.67%
175% AFR 1.97% 1.96% 1.96% 1.95%
Long-term
AFR 2.58% 2.56% 2.55% 2.55%
110% AFR 2.84% 2.82% 2.81% 2.80%
120% AFR 3.09% 3.07% 3.06% 3.05%
130% AFR 3.36% 3.33% 3.32% 3.31%
REV. RUL. 2012-7 TABLE 2
Adjusted AFR for February 2012
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Period for Compounding
Annual Semiannual Quarterly Monthly
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Short-term
adjusted AFR .35% .35% .35% .35%
Mid-term
adjusted AFR 1.24% 1.24% 1.24% 1.24%
Long-term
adjusted AFR 3.26% 3.23% 3.22% 3.21%
REV. RUL. 2012-7 TABLE 3
Rates Under Section 382 for February 2012
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Adjusted federal long-term rate for the current
month 3.26%
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.) 3.55%
REV. RUL. 2012-7 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for February 2012
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Note: Under Section 42(b)(2), the applicable
percentage for non-federally subsidized new buildings
placed in service after July 30, 2008, and before
December 31, 2013, shall not be less than 9%.
Appropriate percentage for the 70% present value
low-income housing credit 7.42%
Appropriate percentage for the 30% present value
low-income housing credit 3.18%
REV. RUL. 2012-7 TABLE 5
Rate Under Section 7520 for February 2012
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Applicable federal rate for determining the
present value of an annuity, an interest for life
or a term of years, or a remainder or
reversionary interest 1.4%