rr-16-27.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, 412, 467, 468, 482, 483, 642, 807, 846, 1288, 7520,
7872.)

Rev. Rul. 2016-27

This revenue ruling provides various prescribed rates for federal
income tax purposes for December 2016 (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). The rates in Table 2 have been determined
in accordance with § 1.1288-1. See T.D. 9763, 81 FR 24482 (April 26,
2016). 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%. 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 the 2017 interest rate
for purposes of sections 846 and 807.

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REV. RUL. 2016-27 TABLE 1

Applicable Federal Rates (AFR) for December 2016

Period for Compounding
Annual Semiannual Quarterly Monthly

Short-term

AFR . 74% . 74% . 74% . 74%
110% AFR . 81% . 81% . 81% .81%
120% AFR . 89% .89% . 89% .89%
130% AFR . 96% . 96% . 96% .96%

Mid-term

AFR 1.47% 1.46% 1.46% 1.46%
110% AFR 1.62% 1.61% 1.61% 1.60%
120% AFR 1.76% 1.75% 1.75% 1.74%
130% AFR 1.91% 1.90% 1.90% 1.89%
150% AFR 2.20% 2.19% 2.18% 2.18%
175% AFR 2.58% 2.56% 2.55% 2.55%

Long-term

AFR 2.26% 2.25% 2.24% 2.24%
110% AFR 2.50% 2.48% 2.47% 2.47%
120% AFR 2.72% 2.70% 2.69% 2.68%
130% AFR 2.95% 2.93% 2.92% 2.91%

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REV. RUL. 2016-27 TABLE 2

Adjusted AFR for December 2016

Period for Compounding
Annual Semiannual Quarterly Monthly
Short-term
adjusted AFR .55% .55% .55% . 55%

Mid-term
adjusted AFR 1.09% 1.09% 1.09% 1.09%

Long-term
adjusted AFR 1.68% 1.67% 1.67% 1.66%

REV. RUL. 2016-27 TABLE 3

Rates Under Section 382 for December 2016

Adjusted federal long-term rate for the current month 1.68%

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.) 1.68%

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REV. RUL. 2016-27 TABLE 4

Appropriate Percentages Under Section 42(b)(1) for December 2016
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 7.43%

Appropriate percentage for the 30% present value low-income
housing credit 3.18%

REV. RUL. 2016-27 TABLE 5

Rate Under Section 7520 for December 2016

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 1.8%

REV. RUL. 2016-27 TABLE 6

Rates Under Sections 846 and 807

Applicable rate of interest for 2017 for purposes of sections 846
and 807 1.46%