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January 2003
Applicable Federal Rates

Rev. Rul. 2003-05

This revenue ruling provides various prescribed rates for federal income tax purposes for January 2003 (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 deemed rate of return for transfers made during calendar year 2002 to pooled income funds described in 642(c)(5) that have been in existence for less than 3 taxable years immediately preceding the taxable year in which the transfer is made.

TABLE 1
Applicable Federal Rates

Period for Compounding

Annual

Semiannual

Quarterly

Monthly

 Short-Term AFR

   

   

   

   

(Term 3 Years or Less)

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

   

   

   

   

(Term More Than 3 Years and 9 Years or Less)

3.43%

3.40%

3.39%

3.38%

110% AFR

3.77%

3.74%

3.72%

3.71%

120% AFR 

4.12%

4.08%

4.06%

4.05%

130% AFR 

4.47%

4.42%

4.40%

4.38%

150% AFR 

5.17%

5.10%

5.07%

5.05%

175% AFR 

6.04%

5.95%

5.91%

5.88%
         

Long-Term AFR 

Annual

Semiannual

Quarterly

Monthly

(Term More Than 9 Years)

4.90%

4.84%

4.81%

4.79%

110% AFR

5.39%

5.32%

5.29%

5.26%

120% AFR 

5.89%

5.81%

5.77%

5.74%

130% AFR 

6.39%

6.29%

6.24%

6.21%

 

   

TABLE 2
Adjusted AFR 

Period for Compounding

Annual

Semiannual

Quarterly

Monthly

 

   

   

   

   

Short-Term adjusted AFR

1.69%

1.68%

1.68%

1.67%

Mid-Term adjusted AFR

3.07%

3.05%

3.04%

3.03%

Long-Term adjusted AFR

4.61%

4.56%

4.53%

4.52%

   

TABLE 3
Rates Under Section 382 

Adjusted federal long-term rate for the current month

4.61%

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.)

4.65%

   

TABLE 4
Appropriate Percentages Under Section 42(b)(2) 

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

7.97%

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

3.41%

TABLE 5
Rate Under Section 7520 

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

4.20%

   

   

TABLE 6

Deemed rate of return for transfers during 2003 to pooled income funds that have been in existence for less than 3 taxable years

6.60%

   

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