Internal Revenue Bulletin — Rulings & Guidance
Rev. Rul. 2020-26 — This revenue ruling provides various prescribed rates for federal income tax purposes for December 2020 (the current month).
This revenue ruling provides various prescribed rates for federal income tax purposes for December 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. 2020-26 TABLE 1 Applicable Federal Rates (AFR) for December 2020 Period for Compounding
| Annual | Semiannual | Quarterly | Monthly | |
|---|---|---|---|---|
| Short-term | ||||
| AFR | 0.15% | 0.15% | 0.15% | 0.15% |
| 110% AFR | 0.17% | 0.17% | 0.17% | 0.17% |
| 120% AFR | 0.18% | 0.18% | 0.18% | 0.18% |
| 130% AFR | 0.20% | 0.20% | 0.20% | 0.20% |
| Mid-term | ||||
| AFR | 0.48% | 0.48% | 0.48% | 0.48% |
| 110% AFR | 0.53% | 0.53% | 0.53% | 0.53% |
| 120% AFR | 0.58% | 0.58% | 0.58% | 0.58% |
| 130% AFR | 0.62% | 0.62% | 0.62% | 0.62% |
| 150% AFR | 0.72% | 0.72% | 0.72% | 0.72% |
| 175% AFR | 0.84% | 0.84% | 0.84% | 0.84% |
| Long-term | ||||
| AFR | 1.31% | 1.31% | 1.31% | 1.31% |
| 110% AFR | 1.45% | 1.44% | 1.44% | 1.44% |
| 120% AFR | 1.58% | 1.57% | 1.57% | 1.56% |
| 130% AFR | 1.71% | 1.70% | 1.70% | 1.69% |
REV. RUL. 2020-26 TABLE 2 Adjusted AFR for December 2020 Period for Compounding
| Annual | Semiannual | Quarterly | Monthly | |
|---|---|---|---|---|
| Short-term adjusted AFR | 0.11% | 0.11% | 0.11% | 0.11% |
| Mid-term adjusted AFR | 0.36% | 0.36% | 0.36% | 0.36% |
| Long-term adjusted AFR | 0.99% | 0.99% | 0.99% | 0.99% |
REV. RUL. 2020-26 TABLE 3 Rates Under Section 382 for December 2020
| Adjusted federal long-term rate for the current month | .99% |
| 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.) | .99% |
REV. RUL. 2020-26 TABLE 4 Appropriate Percentages Under Section 42(b)(1) for December 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 | 7.20% |
| Appropriate percentage for the 30% present value low-income housing credit | 3.09% |
Section 42.—Low-Income Housing Credit
The applicable federal short-term, mid-term, and long-term rates are set forth for the month of December 2020. See Rev. Rul. 2020-26, page 1550.
Section 280G.—Golden Parachute Payments
The applicable federal short-term, mid-term, and long-term rates are set forth for the month of December 2020. See Rev. Rul. 2020-26, page 1550.
Section 382.—Limitation on Net Operating Loss Carryforwards and Certain Built-In Losses Following Ownership Change
The adjusted applicable federal long-term rate is set forth for the month of December 2020. See Rev. Rul. 2020-26, page 1550.
Section 467.—Certain Payments for the Use of Property or Services
The applicable federal short-term, mid-term, and long-term rates are set forth for the month of December 2020. See Rev. Rul. 2020-26, page 1550.
Section 468.—Special Rules for Mining and Solid Waste Reclamation and Closing Costs
The applicable federal short-term rates are set forth for the month of December 2020. See Rev. Rul. 2020-26, page 1550.
Section 482.—Allocation of Income and Deductions Among Taxpayers
The applicable federal short-term, mid-term, and long-term rates are set forth for the month of December 2020. See Rev. Rul. 2020-26, page 1550.
Section 483.—Interest on Certain Deferred Payments
The applicable federal short-term, mid-term, and long-term rates are set forth for the month of December 2020. See Rev. Rul. 2020-26, page 1550.
Section 1288.—Treatment of Original Issue Discount on Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of December 2020. See Rev. Rul. 2020-26, page 1550.
Section 7520.—Valuation Tables
The applicable federal mid-term rates are set forth for the month of December 2020. See Rev. Rul. 2020-26, page 1550.
Section 7872.—Treatment of Loans With Below-Market Interest Rates
The applicable federal short-term, mid-term, and long-term rates are set forth for the month of December 2020. See Rev. Rul. 2020-26, page 1550.
Source: official text