rr-03-05.pdf

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing.

This collection currently includes the publisher’s available advance-release directory. Historical bulletin renditions are discovered separately; an advance-release record alone does not certify the collection archive complete.

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. 2003-5

This revenue ruling provides various prescribed rates for
federal income tax purposes for January 2003 (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 2003 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.

REV. RUL. 2003-5 TABLE 1

Applicable Federal Rates (AFR) for January 2003

Period for Compounding

Annual Semiannual Quarterly Monthly
Short-Term

AFR 1.81% 1.80% 1.80% 1.79%
110% AFR 1.99% 1.98% 1.98% 1.97%
120% AFR 2.17% 2.16% 2.15% 2.15%
130% AFR 2.35% 2.34% 2.33% 2.33%

Mid-Term
AFR 3.43% 3.40% 3.39% 3.38%
110% AFR 3.77% 3.74% 3.72% 3.71%
120% AFR 4.12% 4.08% 4.06% 4.05%
130% AFR 4.47% 4.42% 4.40% 4.38%
150% AFR 5.17% 5.10% 5.07% 5.05%
175% AFR 6.04% 5.95% 5.91% 5.88%

Long-Term

AFR 4.90% 4.84% 4.81% 4.79%
110% AFR 5.39% 5.32% 5.29% 5.26%
120% AFR 5.89% 5.81% 5.77% 5.74%
30% AFR 6.39% 6.29% 6.24% 6.21% 1

REV. RUL. 2003-5 TABLE 2

Adjusted AFR for January 2003

Period for Compounding

Annual
Semiannual Quarterly Monthly

Short-term
adjusted AFR 1.69% 1.68% 1.68% 1.67%

Mid-term
adjusted AFR 3.07% 3.05% 3.04% 3.03%

Long-term
adjusted AFR 4.61% 4.56% 4.53% 4.52%

REV. RUL. 2003-5 TABLE 3

Rates Under Section 382 for January 2003
Adjusted federal long-term rate for the current month 4.61%

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.) 4.65%

REV. RUL. 2003-5 TABLE 4

Appropriate Percentages Under Section 42(b)(2)
for January 2003

Appropriate percentage for the 70% present
value low-income housing credit 7.97%

Appropriate percentage for the 30% present
value low-income housing credit 3.41%

REV. RUL. 2003-5 TABLE 5

Rate Under Section 7520 for January 2003

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. 2003-5 TABLE 6

Deemed Rate for Transfers to New Pooled Income Funds During 2003

Deemed rate of return for transfers during 2003 to pooled income
funds that have been in existence for less than 3 taxable years 6.6%