rr-05-77.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. 2005-77

This revenue ruling provides various prescribed rates for federal income tax
purposes for December 2005 (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 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 2006 interest rate for
sections 846 and 807.

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# REV. RUL. 2005-77 TABLE 1 Applicable Federal Rates (AFR) for December 2005

Period for Compounding

Annual

Semiannual

Quarterly

Monthly

Short-term

AFR

4.34%

4.29%

4.27%

4.25%

110% AFR

4.78%

4.72%

4.69%

4.67%

120% AFR

5.22%

5.15%

5.12%

5.10%

130% AFR

5.66%

5.58%

5.54%

5.52%

Mid-term

AFR

4.52%

4.47%

4.45%

4.43%

110% AFR

4.98%

4.92%

4.89%

4.87%

120% AFR

5.43%

5.36%

5.32%

5.30%

130% AFR

5.89%

5.81%

5.77%

5.74%

150% AFR

6.82%

6.71%

6.65%

6.62%

175% AFR

7.97%

7.82%

7.75%

7.70%

Long-term

AFR

4.79%

4.73%

4.70%

4.68%

110% AFR

5.27%

5.20%

5.17%

5.14%

120% AFR

5.76%

5.68%

5.64%

5.61%

130% AFR

6.24%

6.15%

6.10%

6.07%

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REV. RUL. 2005-77 TABLE 2 Adjusted AFR for December 2005

Period for Compounding

Monthly

Annual

Semiannual

Quarterly

Short-term adjusted AFR

2.98%

2.96%

2.95%

2.94%

Mid-term adjusted AFR

3.51%

3.48%

3.46%

3.46%

Long-term adjusted AFR

4.40%

4.35%

4.33%

4.31%

REV. RUL. 2005-77 TABLE 3
Rates Under Section 382 for December 2005

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.)
4.40%

REV. RUL. 2005-77 TABLE 4

Appropriate Percentages Under Section 42(b)(2) for December 2005

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

8.08%

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

3.46%

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# REV. RUL. 2005-77 TABLE 5 Rate Under Section 7520 for December 2005

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
5.4%

## REV. RUL. 2005-77 TABLE 6

Applicable rate of interest for 2006 for purposes of section
846 and 807
3.98%