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December 2004
Applicable Federal Rates

Rev. Rul. 2004-106

Applicable Federal Rates for December

This revenue ruling provides various prescribed rates for federal income tax purposes for December 2004 (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 contains the 2005 interest rate for sections 846 and 807.

Table I

Applicable Federal Rate (AFR)

Annual

Semi-annual

Quarterly

Monthly
December 2004
 

Period for Compounding

Short-Term

        

AFR

2.48%

2.46%

2.45%

2.45%

110% AFR

2.73%

2.71%

2.70%

2.69%

120% AFR

2.97%

2.95%

2.94%

2.93%

130% AFR

3.23%

3.20%

3.19%

3.18%
Mid-Term
        

AFR

3.56%

3.53%

3.51%

3.50%

110% AFR

3.92%

3.88%

3.86%

3.85%

120% AFR

4.28%

4.24%

4.22%

4.20%

130% AFR

4.64%

4.59%

4.56%

4.55%

150% AFR

5.37%

5.30%

5.27%

5.24%

175% AFR

6.28%

6.18%

6.13%

6.10%
Long-Term
        

AFR

4.68%

4.63%

4.60%

4.59%

110% AFR

5.15%

5.09%

5.06%

5.04%

120% AFR

5.64%

5.56%

5.52%

5.50%

130% AFR

6.11%

6.02%

5.98%

5.95%
 
Table II

Adjusted AFR for December 2004
 

Period for Compounding
 

Annual

Semi-annual

Quarterly

Monthly

Short-term adjusted AFR

1.88%

1.87%

1.87%

1.86%

Mid-term adjusted AFR

2.84%

2.82%

2.81%

2.80%

Long-term adjusted AFR

4.19%

4.15%

4.13%

4.11%
 
Table III

Rates Under Section 382 for December 2004

Adjusted federal long-term rate for the current month

4.19%

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).

4.27%
 
Table IV

Appropriate Percentages Under Section 42(b)(2) for December 2004

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

7.96%

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

3.41%
 
Table V

Rate Under Section 7520 for December 2004

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 VI

Applicable Rate of Interest for 2005

Applicable rate of interest for purposes of section 846 and 807

4.44%

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