rr-20-16.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, 7872.)

Rev. Rul. 2020-16

This revenue ruling provides various prescribed rates for federal income tax
purposes for September 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.

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REV. RUL. 2020-16 TABLE 1

Applicable Federal Rates (AFR) for September 2020

Period for Compounding
Annual Semiannual Quarterly Monthly

Short-term

AFR 0.14% 0.14% 0.14% 0.14%
110% AFR 0.15% 0.15% 0.15% 0.15%
120% AFR 0.17% 0.17% 0.17% 0.17%
130% AFR 0.18% 0.18% 0.18% 0.18%

Mid-term

AFR 0.35% 0.35% 0.35% 0.35%
110% AFR 0.39% 0.39% 0.39% 0.39%
120% AFR 0.42% 0.42% 0.42% 0.42%
130% AFR 0.46% 0.46% 0.46% 0.46%
150% AFR 0.53% 0.53% 0.53% 0.53%
175% AFR 0.61% 0.61% 0.61% 0.61%

Long-term

AFR 1.00% 1.00% 1.00% 1.00%
110% AFR 1.10% 1.10% 1.10% 1.10%
120% AFR 1.20% 1.20% 1.20% 1.20%
130% AFR 1.30% 1.30% 1.30% 1.30%

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REV. RUL. 2020-16 TABLE 2

Adjusted AFR for September 2020

Period for Compounding
Annual Semiannual Quarterly Monthly
Short-term
adjusted AFR 0.11% 0.11% 0.11% 0.11%

Mid-term
adjusted AFR 0.27% 0.27% 0.27% 0.27%

Long-term
adjusted AFR 0.76% 0.76% 0.76% 0.76%

REV. RUL. 2020-16 TABLE 3

Rates Under Section 382 for September 2020

Adjusted federal long-term rate for the current month .76%

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.) .89%

REV. RUL. 2020-16 TABLE 4

Appropriate Percentages Under Section 42(b)(1) for September 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 7.15%

Appropriate percentage for the 30% present value low-income
housing credit 3.07%

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REV. RUL. 2020-16 TABLE 5

Rate Under Section 7520 for September 2020

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 .4%