Treasury Regulations (26 C.F.R.)
26 CFR § 1.1288-1
Adjustment of applicable Federal rate for tax-exempt obligations.
# (a) In general.
In applying section 483 or section 1274 to a tax-exempt obligation, the applicable Federal rate is adjusted to take into account the tax exemption for interest on the obligation. For each applicable Federal rate determined under section 1274(d), the Secretary computes a corresponding adjusted applicable Federal rate by multiplying the applicable Federal rate by the adjustment factor described in paragraph (b) of this section. The Internal Revenue Service publishes the applicable Federal rates and the adjusted applicable Federal rates for each month in the Internal Revenue Bulletin (see § 601.601(d)(2)(ii) of this chapter).
# (b) Adjustment factor.
The adjustment factor is a percentage equal to—
(1) The excess of 100 percent, over
(2) The product of—
(i) 59 percent, and
(ii) The sum of the maximum rate in effect under section 1 applicable to individuals and the maximum rate in effect under section 1411 applicable to individuals for the month to which the adjusted applicable Federal rate applies.
# (c) Effective/applicability date.
The rules of this section apply to the determination of adjusted applicable Federal rates beginning with the rates determined during August 2016 that apply during September 2016.
[T.D. 9763, 81 FR 24484, Apr. 26, 2016]
Source: view the official text
In this part (40 sections)
- 1.1272-2 · Treatment of debt instruments purchased at a premium.
- 1.1272-3 · Election by a holder to treat all interest on a debt…
- 1.1273-1 · Definition of OID.
- 1.1273-2 · Determination of issue price and issue date.
- 1.1274-1 · Debt instruments to which section 1274 applies.
- 1.1274-2 · Issue price of debt instruments to which section 1274…
- 1.1274-3 · Potentially abusive situations defined.
- 1.1274-4 · Test rate.
- 1.1274-5 · Assumptions.
- 1.1274A-1 · Special rules for certain transactions where stated…
- 1.1275-1 · Definitions.
- 1.1275-2 · Special rules relating to debt instruments.
- 1.1275-3 · OID information reporting requirements.
- 1.1275-4 · Contingent payment debt instruments.
- 1.1275-5 · Variable rate debt instruments.
- 1.1275-6 · Integration of qualifying debt instruments.
- 1.1275-7 · Inflation-indexed debt instruments.
- 1.1286-1 · Tax treatment of certain stripped bonds and stripped coupons.
- 1.1286-2 · Stripped inflation-protected debt instruments.
- 1.1287-1 · Denial of capital gains treatment for gains on…
- 1.1288-1 · Adjustment of applicable Federal rate for tax-exempt…
- 1.1291-0 · Treatment of shareholders of certain passive foreign…
- 1.1291-1 · Taxation of U.S. persons that are shareholders of section…
- 1.1291-9 · Deemed dividend election.
- 1.1291-10 · Deemed sale election.
- 1.1293-0 · Table of contents.
- 1.1293-1 · Current taxation of income from qualified electing funds.
- 1.1294-0 · Table of contents.
- 1.1294-1T · Election to extend the time for payment of tax on…
- 1.1295-0 · Table of contents.
- 1.1295-1 · Qualified electing funds.
- 1.1295-3 · Retroactive elections.
- 1.1296-1 · Mark to market election for marketable stock.
- 1.1296-2 · Definition of marketable stock.
- 1.1297-0 · Table of contents.
- 1.1297-1 · Definition of passive foreign investment company.
- 1.1297-2 · Special rules regarding look-through subsidiaries and…
- 1.1297-3 · Deemed sale or deemed dividend election by a U.S. person…
- 1.1297-4 · Qualifying insurance corporation.
- 1.1297-5 · [Reserved]