rr-04-2.pdf

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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.)

Rev. Rul. 2004-2

This revenue ruling provides various prescribed rates for
federal income tax purposes for January 2004 (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. Table 5 contains the federal rate for
determining the present value of 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 the
deemed rate of return for transfers made during calendar year
2004 to pooled income funds described in § 642(c)(5) that have
been in existence for less than 3 taxable years immediately
preceding the taxable year in which the transfer was made.

2
REV. RUL. 2004-2 TABLE 1

Applicable Federal Rates (AFR) for January 2004

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-Term

AFR 1.71% 1.70% 1.70% 1.69%
110% AFR 1.88% 1.87% 1.87% 1.86%
120% AFR 2.05% 2.04% 2.03% 2.03%
130% AFR 2.22% 2.21% 2.20% 2.20%

Mid-Term

AFR 3.52% 3.49% 3.47% 3.46%
110% AFR 3.88% 3.84% 3.82% 3.81%
120% AFR 4.23% 4.19% 4.17% 4.15%
130% AFR 4.59% 4.54% 4.51% 4.50%
150% AFR 5.31% 5.24% 5.21% 5.18%
175% AFR 6.20% 6.11% 6.06% 6.03%

Long-Term

AFR 5.01% 4.95% 4.92% 4.90%
110% AFR 5.52% 5.45% 5.41% 5.39%
120% AFR 6.03% 5.94% 5.90% 5.87%
130% AFR 6.54% 6.44% 6.39% 6.36%

REV. RUL. 2004-2 TABLE 2

Adjusted AFR for January 2004

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-term
adjusted AFR 1.44% 1.43% 1.43% 1.43%

Mid-term
adjusted AFR 2.67% 2.65% 2.64% 2.64%

Long-term
adjusted AFR 4.40% 4.35% 4.33% 4.31%

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REV. RUL. 2004-2 TABLE 3

Rates Under Section 382 for January 2004

Adjusted federal long-term rate for the current month 4.40%

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.) 4.58%

REV. RUL. 2004-2 TABLE 4

Appropriate Percentages Under Section 42(b)(2)
for January 2004

Appropriate percentage for the 70% present
value low-income housing credit 7.99%

Appropriate percentage for the 30% present
value low-income housing credit 3.42%

REV. RUL. 2004-2 TABLE 5

Rate Under Section 7520 for January 2004

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 4.2%

REV. RUL. 2004-2 TABLE 6

Deemed Rate for Transfers to New Pooled Income Funds During 2004

Deemed rate of return for transfers during 2004 to pooled
income funds that have been in existence for less than 3
taxable years 4.8%