IRS Revenue Ruling
1998-4

Code Secs. 1274, 42, 280G, 382, 412, 467 ....

<<FULL TEXT>>

(Also Sections 42, 280G, 382, 412, 467, 468, 482, 483, 642, 807, 846,
1288, 7520, 7872.)

FEDERAL RATES; ADJUSTED FEDERAL RATES; ADJUSTED FEDERAL LONG-TERM RATE,
AND THE LONG-TERM EXEMPT RATE. For purposes of sections 1274, 1288, 382,
and other sections of the Code, tables set forth the rates for January
1998.


REV. RUL. 98-4

This revenue ruling provides various prescribed rates for federal
income tax purposes for January 1998 (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)(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 the deemed rate of return for
transfers made during calendar year 1998 to pooled income funds described
in section 642(c)(5) that have been in existence for less than 3 taxable
years immediately preceding the taxable year in which the transfer is
made.


REV. RUL. 98-4 TABLE 1

Applicable Federal Rates (AFR) for January 1998

Period for Compounding
-------------------------------------------
Annual Semiannual Quarterly Monthly
------ ---------- --------- -------
Short-Term
AFR 5.70% 5.62% 5.58% 5.56%
110% AFR 6.28% 6.18% 6.13% 6.10%
120% AFR 6.85% 6.74% 6.68% 6.65%
130% AFR 7.44% 7.31% 7.24% 7.20%

Mid-Term
AFR 5.93% 5.84% 5.80% 5.77%
110% AFR 6.52% 6.42% 6.37% 6.34%
120% AFR 7.13% 7.01% 6.95% 6.91%
130% AFR 7.73% 7.59% 7.52% 7.47%
150% AFR 8.95% 8.76% 8.67% 8.60%
175% AFR 10.48% 10.22% 10.09% 10.01%

Long-Term
AFR 6.13% 6.04% 6.00% 5.97%
110% AFR 6.75% 6.64% 6.59% 6.55%
120% AFR 7.38% 7.25% 7.19% 7.14%
130% AFR 8.00% 7.85% 7.77% 7.72%


REV. RUL. 98-4 TABLE 2

Adjusted AFR for January 1998

Period for Compounding
-------------------------------------------
Annual Semiannual Quarterly Monthly
------ ---------- --------- -------
Short-term
adjusted AFR 3.86% 3.82% 3.80% 3.79%

Mid-term
adjusted AFR 4.30% 4.25% 4.23% 4.21%

Long-term
adjusted AFR 5.10% 5.04% 5.01% 4.99%


REV. RUL. 98-4 TABLE 3

Rates Under Section 382 for January 1998

Adjusted federal long-term rate for the current month 5.10%

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.) 5.23%


REV. RUL. 98-4 TABLE 4

Appropriate Percentages Under Section 42(b)(2) for January 1998

Appropriate percentage for the 70% present value
low-income housing credit 8.41%
Appropriate percentage for the 30% present value
low-income housing credit 3.61%


REV. RUL. 98-4 TABLE 5

Rate Under Section 7520 for January 1998

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 7.2%


REV. RUL. 98-4 TABLE 6

Deemed Rate for Transfers to New Pooled Income Funds

Deemed rate of return for transfers during 1998 to
pooled income funds that have been in existence
for less than 3 taxable years 7.2%

<<END RULING>>

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