The Internal Revenue Service has announced federal rates for the month of November under §§ 1274 and 7520 of the Internal Revenue Code (“IRC”), one of which will be the lowest rate since the IRS began publishing federal interest rates in 1984.
- The federal short-term rate under §1274, which would apply to (among other things) an intra-family loan under §7872 with a term of not more than three years, will be 0.13%, which is lower than the 0.14% which applied in September and October.
- The November mid-term and long-term rates of 0.39% and 1.17% will be somewhat higher that the rates of 0.35% and 1.00% that applied in September.
- The §7520 rate, which is used to value life estate, annuities, and remainders, will remain at 0.4%, which is the record low first set in August.
For information on estate planning techniques to take advantage of these low rates, see “Low-Interest Estate Planning Strategies” (subscription required), which contains links to the Webcalculators overviews of long-term GRATs and interest-only term notes (no subscription required for those overviews) and sample calculations from Webcalculators.