Promissory Note Interest Rates

 Hello All…I’m lending, interest rates are as important as principal balances.  Every month, the IRS issues it’s adjusted interest rate sheets.  The subject matter “matters”!

Wenston DeSue

Section 1274.--Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property

(Also Sections 42, 280G, 382, 467, 468, 482, 483, 1288, 7520, 7872.)

Rev. Rul. 2022-10

This revenue ruling provides various prescribed rates for federal income tax purposes for June 2022 (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.

   

     AFR

110% AFR 120% AFR 130% AFR

AFR

110% AFR 120% AFR 130% AFR 150% AFR 175% AFR

AFR

110% AFR 120% AFR 130% AFR

Annual

2.21% 2.43% 2.66% 2.88%

2.93% 3.23% 3.52% 3.82% 4.42% 5.15%

Period for Compounding Semiannual Quarterly

Short-term

2.20% 2.19% 2.42% 2.41% 2.64% 2.63% 2.86% 2.85%

Mid-term

2.91% 2.90% 3.20% 3.19% 3.49% 3.47% 3.78% 3.76% 4.37% 4.35% 5.09% 5.06%

Long-term

Monthly

2.19% 2.41% 2.63% 2.84%

2.89% 3.18% 3.46% 3.75% 4.33% 5.04%

3.07% 3.38% 3.68% 3.99%

2

REV. RUL. 2022-10 TABLE 1 Applicable Federal Rates (AFR) for June 2022

   3.11% 3.09% 3.43% 3.40% 3.74% 3.71% 4.06% 4.02%

3.08% 3.39% 3.69% 4.00%

   

Annual 1.68%

2.22% 2.36%

Period for Compounding

3

REV. RUL. 2022-10 TABLE 2 Adjusted AFR for June 2022

 Short-term adjusted AFR

Mid-term adjusted AFR

Long-term adjusted AFR

Semiannual 1.67%

2.21% 2.35%

Quarterly 1.67%

2.20% 2.34%

Monthly 1.66%

2.20% 2.34%

       REV. RUL. 2022-10 TABLE 3 Rates Under Section 382 for June 2022

Adjusted federal long-term rate for the current month

2.36% 2.36%

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.)

REV. RUL. 2022-10 TABLE 4

   Appropriate Percentages Under Section 42(b)(1) for June 2022

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 7.70%

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

REV. RUL. 2022-10 TABLE 5

3.30%

   

4

Rate Under Section 7520 for June 2022

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 3.60%

Real Estate

Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker.  Real estate is the business of exchange and affects every person on the planet.  Real estate on all levels represents resources, access and ultimately, power.  Knowledge is power…