rr-18-05.pdf

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Section 1274.--Determination of Issue Price in the Case of Certain Debt Instruments
Issued for Property

(Also Sections 42, 280G, 382, 467, 468, 482, 483, 1288, 7520.)

Rev. Rul. 2018-5

This revenue ruling provides various prescribed rates for federal
income tax purposes for February 2018 (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.

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REV. RUL. 2018-5 TABLE 1

Applicable Federal Rates (AFR) for February 2018

Period for Compounding
Annual Semiannual Quarterly Monthly

Short-term

AFR 1.81% 1.80% 1.80% 1.79%
110% AFR 1.99% 1.98% 1.98% 1.97%
120% AFR 2.17% 2.16% 2.15% 2.15%
130% AFR 2.35% 2.34% 2.33% 2.33%

Mid-term

AFR 2.31% 2.30% 2.29% 2.29%
110% AFR 2.55% 2.53% 2.52% 2.52%
120% AFR 2.78% 2.76% 2.75% 2.74%
130% AFR 3.01% 2.99% 2.98% 2.97%
150% AFR 3.48% 3.45% 3.44% 3.43%
175% AFR 4.07% 4.03% 4.01% 4.00%

Long-term

AFR 2.66% 2.64% 2.63% 2.63%
110% AFR 2.92% 2.90% 2.89% 2.88%
120% AFR 3.20% 3.17% 3.16% 3.15%
130% AFR 3.46% 3.43% 3.42% 3.41%

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REV. RUL. 2018-5 TABLE 2

Adjusted AFR for February 2018

Period for Compounding
Annual Semiannual Quarterly Monthly
Short-term
adjusted AFR 1.34% 1.34% 1.34% 1.34%

Mid-term
adjusted AFR 1.72% 1.71% 1.71% 1.70%

Long-term
adjusted AFR 1.97% 1.96% 1.96% 1.95%

REV. RUL. 2018-5 TABLE 3

Rates Under Section 382 for February 2018

Adjusted federal long-term rate for the current month 1.97%

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.) 1.97%

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REV. RUL. 2018-5 TABLE 4

Appropriate Percentages Under Section 42(b)(1) for February 2018
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 7.57%

Appropriate percentage for the 30% present value low-income
housing credit 3.25%

REV. RUL. 2018-5 TABLE 5

Rate Under Section 7520 for February 2018

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 2.8%