rr-06-35.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. 2006-35

This revenue ruling provides various prescribed rates for federal income tax
purposes for July 2006 (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 an 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 blended annual rate for 2006
for purposes of section 7872.

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# REV. RUL. 2006-35 TABLE 1 Applicable Federal Rates (AFR) for July 2006

Period for Compounding

Annual

Semiannual

Quarterly

Monthly

Short-term

AFR

5.05%

4.99%

4.96%

4.94%

110% AFR

5.57%

5.49%

5.45%

5.43%

120% AFR

6.08%

5.99%

5.95%

5.92%

130% AFR

6.60%

6.49%

6.44%

6.40%

Mid-term

AFR

5.05%

4.99%

4.96%

4.94%

110% AFR

5.57%

5.49%

5.45%

5.43%

120% AFR

6.08%

5.99%

5.95%

5.92%

130% AFR

6.60%

6.49%

6.44%

6.40%

150% AFR

7.63%

7.49%

7.42%

7.38%

175% AFR

8.92%

8.73%

8.64%

8.58%

Long-term

AFR

5.29%

5.22%

5.19%

5.16%

110% AFR

5.82%

5.74%

5.70%

5.67%

120% AFR

6.36%

6.26%

6.21%

6.18%

130% AFR

6.91%

6.79%

6.73%

6.70%

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REV. RUL. 2006-35 TABLE 2 Adjusted AFR for July 2006

Period for Compounding Annual Semiannual Quarterly Monthly

Short-term adjusted AFR

3.60%

3.57%

3.55%

3.54%

Mid-term adjusted AFR

3.81%

3.77%

3.75%

3.74%

Long-term adjusted AFR

4.43%

4.38%

4.36%

4.34%

REV. RUL. 2006-35 TABLE 3
Rates Under Section 382 for July 2006

Adjusted federal long-term rate for the current month
4.43%

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.)
4.45%

REV. RUL. 2006-35 TABLE 4

Appropriate Percentages Under Section 42(b)(2) for July 2006

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

8.21%

Appropriate percentage for the 30% present value low-income

housing credit

3.52%

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# REV. RUL. 2006-35 TABLE 5 Rate Under Section 7520 for July 2006

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
6.0%

REV. RUL. 2006-35 TABLE 6
Blended Annual Rate for 2006

Section 7872(e)(2) blended annual rate for 2006
4.71%