December 7520 Rate Increases to 1.6%

Rev. Rul. 2011-31

Full Text:

Part I

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 December 2011 (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%. 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. Finally, Table 6 contains contains the 2012 interest rate for sections 846 and 807.

                       REV. RUL. 2011-31 TABLE 1
           Applicable Federal Rates (AFR) for December 2011
 _____________________________________________________________________

                                     Period for Compounding
                         _____________________________________________

                         Annual    Semiannual  Quarterly     Monthly
 _____________________________________________________________________

                              Short-term

      AFR                 .20%        .20%        .20%        .20%
      110% AFR            .22%        .22%        .22%        .22%
      120% AFR            .24%        .24%        .24%        .24%
      130% AFR            .26%        .26%        .26%        .26%

                               Mid-term

      AFR                1.27%       1.27%       1.27%       1.27%
      110% AFR           1.40%       1.40%       1.40%       1.40%
      120% AFR           1.53%       1.52%       1.52%       1.52%
      130% AFR           1.66%       1.65%       1.65%       1.64%
      150% AFR           1.92%       1.91%       1.91%       1.90%
      175% AFR           2.23%       2.22%       2.21%       2.21%

                               Long-term

      AFR                2.80%       2.78%       2.77%       2.76%
      110% AFR           3.08%       3.06%       3.05%       3.04%
      120% AFR           3.37%       3.34%       3.33%       3.32%
      130% AFR           3.64%       3.61%       3.59%       3.58%

                       REV. RUL. 2011-31 TABLE 2
                    Adjusted AFR for December 2011
 _____________________________________________________________________

                                     Period for Compounding
                         _____________________________________________

                         Annual    Semiannual  Quarterly     Monthly
 _____________________________________________________________________

      Short-term
      adjusted AFR        .45%        .45%        .45%        .45%

      Mid-term
      adjusted AFR       1.69%       1.68%       1.68%       1.67%

      Long-term
      adjusted AFR       3.55%       3.52%       3.50%       3.49%

                       REV. RUL. 2011-31 TABLE 3
               Rates Under Section 382 for December 2011
 _____________________________________________________________________

      Adjusted federal long-term rate for the current        3.55%
      month

      Long-term tax-exempt rate for ownership changes        3.55%
      during the current month (the highest of the
      adjusted federal long-term rates for the current
      month and the prior two months.)

                       REV. RUL. 2011-31 TABLE 4
   Appropriate Percentages Under Section 42(b)(1) for December 2011
 _____________________________________________________________________

      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       7.47%
      low-income housing credit

      Appropriate percentage for the 30% present value       3.20%
      low-income housing credit

                       REV. RUL. 2011-31 TABLE 5
               Rate Under Section 7520 for December 2011
 _____________________________________________________________________

      Applicable federal rate for determining the            1.6%
      present value of an annuity, an interest for life
      or a term of years, or a remainder or reversionary
      interest

                       REV. RUL. 2011-31 TABLE 6
                   Rates Under Sections 846 and 807
 _____________________________________________________________________

      Applicable rate of interest for 2012 for purposes      2.89%
      of sections 846 and 807