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IRS ANNOUNCES AVERAGE EFFECTIVE INTEREST RATES ON NEW FLB LOANS APPLIED IN COMPUTING SEC. 2032A SPECIAL USE VALUATION FOR FARM LAND.

DEC. 28, 1987

Rev. Rul. 87-142; 1987-2 C.B. 223

DATED DEC. 28, 1987
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Citations: Rev. Rul. 87-142; 1987-2 C.B. 223

Rev. Rul. 87-142

This revenue ruling contains a list of the average annual effective interest rates on new Federal Land Bank loans. Under section 2032A(e)(7)(A)(ii) of the Internal Revenue Code, rates on new Federal Land Bank loans are used in computing the special use value of real property used as a farm for which an election is made under section 2032A. This revenue ruling also contains a list of the states within each land bank district. The rates in this revenue ruling may be used by estates that value farmland under section 2032A as a date in 1987.

Average annual effective interest rates, calculated in accordance with section 2032A(e)(7)(A) of the code and section 20.2032A-4(e) of the Estate Tax Regulations, to be used under section 2032A(e)(7)(A)(ii) are as follows:

 Federal Land Bank District                   Year of valuation

 

 in which property is located                        1987

 

 ____________________________                 _________________

 

 Baltimore                                           12.60

 

 Columbia                                            12.37

 

 Jackson (Formerly New Orleans)                      12.54

 

 Louisville                                          13.19

 

 Omaha                                               13.22

 

 Sacramento                                          12.50

 

 St. Louis                                           12.69

 

 St. Paul                                            12.70

 

 Spokane                                             12.62

 

 Springfield                                         12.44

 

 Texas (Formerly Houston)                            11.85

 

 Wichita                                             12.86

 

 

 Federal Land Bank District:

 

 

 District                             States

 

 ________                             ______

 

 Baltimore      Delaware, District of Columbia, Maryland,

 

                Pennsylvania, Virginia, West Virginia.

 

 

 Columbia       Florida, Georgia, North Carolina, South Carolina.

 

 

 Jackson        Alabama, Louisiana, Mississippi.

 

 

 Louisville     Indiana, Kentucky, Ohio, Tennessee.

 

 

 Omaha          Iowa, Nebraska, South Dakota, Wyoming.

 

 

 Sacramento     Arizona, California, Hawaii, Nevada, Utah.

 

 

 St. Louis      Arkansas, Illinois, Missouri.

 

 

 St. Paul       Michigan, Minnesota, North Dakota, Wisconsin.

 

 

 Spokane        Alaska, Idaho, Montana, Oregon, Washington.

 

 

 Springfield    Connecticut, Maine, Massachusetts, New Hampshire, New

 

                Jersey, New York, Rhode Island, Vermont.

 

 

 Texas          Texas.

 

 

 Wichita        Colorado, Kansas, New Mexico, Oklahoma.

 

 

Rev. Rul. 81-170, 1981-1 C.B. 454, which sets forth rates for several prior years, contains an illustrative computation of an average annual effective interest rate. The rates applicable for valuations in subsequent years are listed in Rev. Rul. 82-104, 1982-1 C.B. 129 (for 1982); Rev. Rul. 83-71, 1983-1 C.B. 227 (for 1983); Rev. Rul. 84-119, 1984-2 C.B. 193 (for 1984); Rev. Rul. 85-92, 1985-2 C.B. 198 (for 1985); and in Rev. Rul. 86-85, 1986-1 C.B. 299 (for 1986).

DRAFTING INFORMATION

The principal author of this revenue ruling is Howard J. Garber of the Individual Tax Division. For further information regarding this revenue ruling contact Mr. Garber on (202) 566-4475 (not a toll- free call).

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