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January 2006
Applicable Federal Rates

Rev. Rul. 2006-4

Applicable Federal Rates for January

This revenue ruling provides various prescribed rates for federal income tax purposes for January 2006 (the current month). Table 1 contains the short-term, midterm, 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, midterm, 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 longterm 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 2006 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 was made.


Table I
January 2006
 

Period for Compounding

Applicable Federal Rate (AFR)

Annual

Semi-annual

Quarterly

Monthly

Short-Term

        

AFR

4.38%

4.33%

4.31%

4.29%

110% AFR

4.82%

4.76%

4.73%

4.71%

120% AFR

5.27%

5.20%

5.17%

5.14%

130% AFR

5.71%

5.63%

5.59%

5.57%
Mid-Term
        

AFR

4.48%

4.43%

4.41%

4.39%

110% AFR

4.93%

4.87%

4.84%

4.82%

120% AFR

5.39%

5.32%

5.29%

5.26%

130% AFR

5.84%

5.76%

5.72%

5.69%

150% AFR

6.76%

6.65%

6.60%

6.56%

175% AFR

7.90%

7.75%

7.68%

7.63%
Long-Term
        

AFR

4.73%

4.68%

4.65%

4.64%

110% AFR

5.22%

5.15%

5.12%

5.10%

120% AFR

5.70%

5.62%

5.58%

5.56%

130% AFR

6.17%

6.08%

6.03%

6.00%
 
Table II
Adjusted AFR for January 2006
 

Period for Compounding
 

Annual

Semi-annual

Quarterly

Monthly

Short-term adjusted AFR

3.17%

3.15%

3.14%

3.13%

Mid-term adjusted AFR

3.56%

3.53%

3.51%

3.50%

Long-term adjusted AFR

4.36%

4.31%

4.29%

4.27%
 
Table III
Rates Under Section 382 for January 2006

Adjusted federal long-term rate for the current month

4.36%

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.)

4.40%
 
Table IV
Appropriate Percentages Under Section 42(b)(2) for January 2006

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

8.07%

Appropriate Percentage for the 30% present value low-income housing credit
3.46%
 
Table V
Rate Under Section 7520 for January 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

5.4%
 
Table VI
Deemed Rate for Transfers to New Pooled Income Funds During 2006

Deemed rate of return for transfers during 2006 to pooled income funds that have been in existence for less than 3 taxable years.

3.8%

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