Community Development & Affordable Housing Update

    View Authors November 2009

    The US Treasury (Internal Revenue Service) issues a revenue ruling each month with interest rates. The current revenue ruling is Rev. Rul. 2009-38. Highlighted below are the various applicable federal rates and housing tax credit applicable percentages for December 2009 for your reference and use. We hope you will find this a useful reference.

    This revenue ruling provides various prescribed rates for federal income tax purposes for December 2009 (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, and before December 31, 2013, shall not be less than 9 percent. 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. 2009-38 TABLE 1
    Applicable Federal Rates (AFR) for December 2009

    Period for Compounding

     

    Annual

    Semiannual

    Quarterly

    Monthly

    Short-term

    AFR

    .69%

    .69%

    .69%

    .69%

    110% AFR

    .76%

    .76%

    .76%

    .76%

    120% AFR

    .83%

    .83%

    .83%

    .83%

    130% AFR

    .90%

    .90%

    .90%

    .90%

    Mid-term

    AFR

    2.64%

    2.62%

    2.61%

    2.61%

    110% AFR

    2.90%

    2.88%

    2.87%

    2.86%

    120% AFR

    3.16%

    3.14%

    3.13%

    3.12%

    130% AFR

    3.44%

    3.41%

    3.40%

    3.39%

    150% AFR

    3.97%

    3.93%

    3.91%

    3.90%

    175% AFR

    4.64%

    4.59%

    4.56%

    4.55%

    Long-term

    AFR

    4.17%

    4.13%

    4.11%

    4.09%

    110% AFR

    4.59%

    4.54%

    4.51%

    4.50%

    120% AFR

    5.02%

    4.96%

    4.93%

    4.91%

    130% AFR

    5.44%

    5.37%

    5.33%

    5.31%

    Rev. Rul. 2009-38 TABLE 2
    Adjusted AFR for December 2009

    Period for Compounding

     

    Annual

    Semiannual

    Quarterly

    Monthly

    Short-term adjusted AFR

    .86%

    .86%

    .86%

    .86%

    Mid-term adjusted AFR

    2.25%

    2.24%

    2.23%

    2.23%

    Long-term adjusted AFR

    4.14%

    4.10%

    4.08%

    4.07%

    Rev. Rul. 2009-38 TABLE 3
    Rates Under Section 382 for December 2009

     

    Adjusted federal long-term rate for the current month

    4.14%

    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).

    4.16%

    Rev. Rul. 2009-38 TABLE 4
    Appropriate Percentages Under Section 42(b)(1) for December 2009
    Note: Under Section 42(b)(2), the applicable percentage for nonfederally subsidized new buildings placed in service after July 30, 2008 and before December 31, 2013 shall not be less than 9 percent.

     

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

    7.79%

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

    3.34%

    Rev. Rul. 2009-38 TABLE 5
    Rate Under Section 7520 for December 2009

     

    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

    3.2%

    Rev. Rul. 2009-38 TABLE 6
    Rates Under Sections 846 and 807

     

    Applicable rate of interest for 2010 for purposes of sections 846 and 807

    3.81%