rr-20-03.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. 2020-3

This revenue ruling provides various prescribed rates for federal income tax
purposes for February 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
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, 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. 2020-3 TABLE 1

2
Applicable Federal Rates (AFR) for February 2020

Period for Compounding
Annual Semiannual Quarterly Monthly

Short-term

AFR 1.59% 1.58% 1.58% 1.57%
110% AFR 1.75% 1.74% 1.74% 1.73%
120% AFR 1.91% 1.90% 1.90% 1.89%
130% AFR 2.06% 2.05% 2.04% 2.04%

Mid-term

AFR 1.75% 1.74% 1.74% 1.73%
110% AFR 1.92% 1.91% 1.91% 1.90%
120% AFR 2.10% 2.09% 2.08% 2.08%
130% AFR 2.27% 2.26% 2.25% 2.25%
150% AFR 2.63% 2.61% 2.60% 2.60%
175% AFR 3.07% 3.05% 3.04% 3.03%

Long-term

AFR 2.15% 2.14% 2.13% 2.13%
110% AFR 2.36% 2.35% 2.34% 2.34%
120% AFR 2.59% 2.57% 2.56% 2.56%
130% AFR 2.80% 2.78% 2.77% 2.76%

REV. RUL. 2020-3 TABLE 2

Adjusted AFR for February 2020

3

Period for Compounding
Annual Semiannual Quarterly Monthly
Short-term
adjusted AFR 1.20% 1.20% 1.20% 1.20%

Mid-term
adjusted AFR 1.32% 1.32% 1.32% 1.32%

Long-term
adjusted AFR 1.63% 1.62% 1.62% 1.61%

REV. RUL. 2020-3 TABLE 3

Rates Under Section 382 for February 2020

Adjusted federal long-term rate for the current month 1.63%

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.) 1.63%

REV. RUL. 2020-3 TABLE 4

Appropriate Percentages Under Section 42(b)(1) for February 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 7.45%

Appropriate percentage for the 30% present value low-income
housing credit 3.19%

REV. RUL. 2020-3 TABLE 5

Rate Under Section 7520 for February 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 2.2%