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Rev. Rul. 2016–18


Table of Contents

This revenue ruling provides various prescribed rates for federal income tax purposes for August 2016 (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. 2016–18 TABLE 1
Applicable Federal Rates (AFR) for August 2016
Period for Compounding
  Annual Semiannual Quarterly Monthly
Short-term
AFR .56% .56% .56% .56%
110% AFR .62% .62% .62% .62%
120% AFR .67% .67% .67% .67%
130% AFR .73% .73% .73% .73%
Mid-term
AFR 1.18% 1.18% 1.18% 1.18%
110% AFR 1.30% 1.30% 1.30% 1.30%
120% AFR 1.43% 1.42% 1.42% 1.42%
130% AFR 1.54% 1.53% 1.53% 1.53%
150% AFR 1.78% 1.77% 1.77% 1.76%
175% AFR 2.08% 2.07% 2.06% 2.06%
Long-term
AFR 1.90% 1.89% 1.89% 1.88%
110% AFR 2.09% 2.08% 2.07% 2.07%
120% AFR 2.28% 2.27% 2.26% 2.26%
130% AFR 2.48% 2.46% 2.45% 2.45%
REV. RUL. 2016–18 TABLE 2
Adjusted AFR for August 2016
Period for Compounding
  Annual Semiannual Quarterly Monthly
Short-term
adjusted AFR .56% .56% .56% .56%
Mid-term
adjusted AFR 1.03% 1.03% 1.03% 1.03%
Long-term
adjusted AFR 1.82% 1.81% 1.81% 1.80%
REV. RUL. 2016–18 TABLE 3
Rates Under Section 382 for August 2016
Adjusted federal long-term rate for the current month 1.82%
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.) 2.15%
REV. RUL. 2016–18 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for August 2016
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 7.35%
Appropriate percentage for the 30% present value low-income housing credit 3.15%
REV. RUL. 2016–18 TABLE 5
Rate Under Section 7520 for August 2016
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 1.4%