rr-20-26.pdf

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Section 1274.--Determination of Issue Price in the Case of Certain Debt Instruments
Issued for Property

(Also Sections 42, 280G, 382, 467, 468, 482, 483, 1288, 7520, 7872.)

Rev. Rul. 2020-26

This revenue ruling provides various prescribed rates for federal income tax
purposes for December 2020 (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
sect ion 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, 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. 2020-26 TABLE 1

2
Applicable Federal Rates (AFR) for December 2020

Period for Compounding
Annual Semiannual Quarterly Monthly

Short-term

AFR 0.15% 0.15% 0.15% 0.15%
110% AFR 0.17% 0.17% 0.17% 0.17%
120% AFR 0.18% 0.18% 0.18% 0.18%
130% AFR 0.20% 0.20% 0.20% 0.20%

Mid-term

AFR 0.48% 0.48% 0.48% 0.48%
110% AFR 0.53% 0.53% 0.53% 0.53%
120% AFR 0.58% 0.58% 0.58% 0.58%
130% AFR 0.62% 0.62% 0.62% 0.62%
150% AFR 0.72% 0.72% 0.72% 0.72%
175% AFR 0.84% 0.84% 0.84% 0.84%

Long-term

AFR 1.31% 1.31% 1.31% 1.31%
110% AFR 1.45% 1.44% 1.44% 1.44%
120% AFR 1.58% 1.57% 1.57% 1.56%
130% AFR 1.71% 1.70% 1.70% 1.69%

REV. RUL. 2020-26 TABLE 2

Adjusted AFR for December 2020

3

Period for Compounding
Annual Semiannual Quarterly Monthly
Short-term
adjusted AFR 0.11% 0.11% 0.11% 0.11%

Mid-term
adjusted AFR 0.36% 0.36% 0.36% 0.36%

Long-term
adjusted AFR 0.99% 0.99% 0.99% 0.99%

REV. RUL. 2020-26 TABLE 3

Rates Under Section 382 for December 2020

Adjusted federal long-term rate for the current month .99%

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.) .99%

REV. RUL. 2020-26 TABLE 4

Appropriate Percentages Under Section 42(b)(1) for December 2020
Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized
new buildings placed in service after July 30, 2008, shall not be less than 9%.

Appropriate percentage for the 70% present value low-income
housing credit 7.20%

Appropriate percentage for the 30% present value low-income
housing credit 3.09%

REV. RUL. 2020-26 TABLE 5

Rate Under Section 7520 for December 2020

4
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 . 6%