rr-03-122.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. 2003-122

This revenue ruling provides various prescribed rates for
federal income tax purposes for December 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
2004 interest rate for sections 846 and 807.

2
REV. RUL. 2003-122 TABLE 1

Applicable Federal Rates (AFR) for December 2003

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-Term

AFR 1.68% 1.67% 1.67% 1.66%
110% AFR 1.85% 1.84% 1.84% 1.83%
120% AFR 2.01% 2.00% 2.00% 1.99%
130% AFR 2.18% 2.17% 2.16% 2.16%

Mid-Term

AFR 3.55% 3.52% 3.50% 3.49%
110% AFR 3.91% 3.87% 3.85% 3.84%
120% AFR 4.26% 4.22% 4.20% 4.18%
130% AFR 4.63% 4.58% 4.55% 4.54%
150% AFR 5.35% 5.28% 5.25% 5.22%
175% AFR 6.25% 6.16% 6.11% 6.08%

Long-Term

AFR 5.12% 5.06% 5.03% 5.01%
110% AFR 5.65% 5.57% 5.53% 5.51%
120% AFR 6.16% 6.07% 6.02% 5.99%
130% AFR 6.69% 6.58% 6.53% 6.49%

REV. RUL. 2003-122 TABLE 2

Adjusted AFR for December 2003

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-term
adjusted AFR 1.37% 1.37% 1.37% 1.37%

Mid-term
adjusted AFR 2.75% 2.73% 2.72% 2.71%

Long-term
adjusted AFR 4.58% 4.53% 4.50% 4.49%

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REV. RUL. 2003-122 TABLE 3

Rates Under Section 382 for December 2003

Adjusted federal long-term rate for the current month 4.58%

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.) 4.74%

REV. RUL. 2003-122 TABLE 4

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

Appropriate percentage for the 70% present
value low-income housing credit 8.01%

Appropriate percentage for the 30% present
value low-income housing credit 3.43%

REV. RUL. 2003-122 TABLE 5

Rate Under Section 7520 for December 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%

4

REV. RUL. 2003-122 TABLE 6

Applicable rate of interest for 2004
for purposes of section 846 and 807 4.82%