Rev. Rul. 81-170
Rev. Rul. 81-170; 1981-1 C.B. 454
- Cross-Reference26 CFR 20.2032A-4: Method of valuing farm real property.
- Code Sections
- LanguageEnglish
- Tax Analysts Electronic Citationnot available
Rev. Rul. 81-170
This revenue ruling contains a cumulative list of the average annual effective interest rates on new Federal Land Bank loans to be utilized under section 2032A(e)(7)(A)(ii) of the Internal Revenue Code in computing the special use value of real property used as a farm for which an election is made under the provisions of section 2032A. The interest rates listed are those applicable for the estates of decedents dying in 1977, 1978, 1979, 1980, and 1981. The rates applicable in the case of decedents dying in 1977, 1978, 1979, and 1980 were previously listed in Rev. Rul. 80-179, 1980-2 C.B. 253.
This revenue ruling also contains a list of the states within each land bank district and an illustrative computation of an average annual effective interest rate.
Average annual effective interest rate, calculated in accordance with section 20.2032A-4(e) of the Estate Tax Regulations and section 2032A(e)(7)(A) of the Code, to be utilized under section 2032A(e)(7)(A)(ii):
Federal Land Bank District in
which property is located Year of Death
1977 1978 1979 1980 1981
Baltimore ----------------------- 8.65% 8.86% 9.04% 9.24% 9.66%
Columbia ------------------------ 8.58% 8.79% 8.96% 9.17% 9.40%
Houston ------------------------- 8.29% 8.48% 8.60% 8.76% 9.09%
Louisville ---------------------- 8.64% 8.80% 8.88% 9.21% 9.53%
New Orleans --------------------- 8.26% 8.48% 8.72% 8.96% 9.33%
Omaha --------------------------- 8.70% 8.92% 9.05% 9.25% 9.59%
Sacramento ---------------------- 8.67% 8.82% 9.04% 9.35% 9.63%
St. Louis ----------------------- 8.50% 8.71% 8.93% 9.20% 9.77%
St. Paul ------------------------ 8.21% 8.47% 8.69% 8.95% 9.30%
Spokane ------------------------- 8.63% 8.88% 9.10% 9.31% 9.60%
Springfield --------------------- 8.42% 8.55% 8.65% 8.81% 9.10%
Wichita ------------------------- 8.52% 8.72% 8.88% 9.08% 9.56%
Example: The interest rate of 9.66% for the Baltimore District for decedents dying in 1981 is computed as follows:
1. Billed interest rates for 1980, based on monthly interest
rates received from Federal Land Bank:
(Jan.-Feb.) 9.85%
(Mar.-Apr.) 10.75%
(May-Jun.) 12.00%
(Jul.-Nov.) 11.00%
(Dec.) 12.00%
------
Average Billing Rate for 1980 (weighted average based on
number of months each rate is in effect) 11.02%
======
2. Adjustment to reflect 5% stock purchase requirement:
11.60%
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3. Average annual effective interest rate, calculated for each
year in same manner as 1 and 2 above:
1976 -- 9.08%
1977 -- 8.95%
1978 -- 8.95%
1979 -- 9.73%
1980 -- 11.60%
------
48.31% / 5 = 9.66%
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See section 20.2032A-4(e) of the Estate Tax Regulations for the explanation of calculations 1 and 2.
See section 2032A(e)(7)(A) of the Code for the explanation of calculation 3.
Federal Land Bank Districts:
District States
Baltimore ------------------- Delaware, District of Columbia,
Maryland, Pennsylvania, Virginia, West
Virginia.
Columbia -------------------- Florida, Georgia, North Carolina, South
Carolina.
Houston --------------------- Texas.
Louisville ------------------ Indiana, Kentucky, Ohio, Tennessee.
New Orleans ----------------- Alabama, Louisiana, Mississippi.
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.
Wichita --------------------- Colorado, Kansas, New Mexico, Oklahoma.
EFFECT ON OTHER REVENUE RULINGS
Rev. Rul. 80-179 is superseded.
- Cross-Reference26 CFR 20.2032A-4: Method of valuing farm real property.
- Code Sections
- LanguageEnglish
- Tax Analysts Electronic Citationnot available
