IRS Revenue Ruling
1998-22

Code Sec. 2032A

<<FULL TEXT>>

26 CFR 20.2032A-4; Method of valuing farm real property.

Special use value; farms; interest rates. The 1998 interest rates to be
used in computing the special use value of farm real property for which an
election is made under section 2032A of the Code are listed for estates of
decedents.


REV. RUL. 98-22

This revenue ruling contains a list of the average annual effective
interest rates on new loans under the Farm Credit Bank system. This
revenue ruling also contains a list of the states within each Farm Credit
Bank District.

Under section 2032A(e)(7)(A)(ii) of the Internal Revenue Code, rates on
new Farm Credit 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. The rates in this revenue ruling may be used by estates that value
farmland under section 2032A as of a date in 1998.

Average annual effective interest rates, calculated in accordance with
section 2032A(e)(7)(A) and section 20.2032A-4(e) of the Estate Tax
Regulations, to be used under section 2032A(e)(7)(A)(ii), are set forth in
the accompanying Table of Interest Rates (Table 1). The states within each
Farm Credit Bank District are set forth in the accompanying Table of Farm
Credit Bank Districts (Table 2).

Rev. Rul. 81-170, 1981-1 C.B. 454, contains an illustrative computation
of an average annual effective interest rate. The rates applicable for
valuation in 1997 are in Rev. Rul. 97-13, 1997-16 I.R.B. 4. For rate
information for years prior to 1997, see Rev. Rul. 96-23, 1996-1 C.B. 198,
and other revenue rulings that are referenced therein.


DRAFTING INFORMATION

The principal author of this revenue ruling is Lane Damazo of the
Office of Assistant Chief Counsel (Passthroughs and Special Industries).
For further information regarding this revenue ruling, contact Lane Damazo
on (202) 622-3090 (not a toll-free call).


REV. RUL. 98-22 TABLE 1

TABLE OF INTEREST RATES
(Year of Valuation 1998)

Farm Credit Bank District in Interest
Which Property Is Located Rate
---------------------------- --------
Columbia 9.32
Omaha 8.17
Sacramento 8.38
St. Paul 8.28
Spokane 8.22
Springfield 8.74
Texas 8.19
Wichita 8.27


REV. RUL. 98-22 TABLE 2

TABLE OF FARM CREDIT BANK DISTRICTS

District States
-------- ------
Columbia Delaware, District of Columbia, Florida, Georgia,
Maryland, North Carolina, Pennsylvania, South
Carolina, Virginia, West Virginia.
Omaha Iowa, Nebraska, South Dakota, Wyoming.
Sacramento Arizona, California, Hawaii, Nevada, Utah.
St. Paul Arkansas, illinois, Indiana, Kentucky, Michigan,
Minnesota, Missouri, North Dakota, Ohio, Tennessee,
Wisconsin.
Spokane Alaska, Idaho, Montana, Oregon, Washington.
Springfield Connecticut, Maine, Massachusetts, New Hampshire, New
Jersey, New York, Rhode Island, Vermont.
Texas Alabama, Louisiana, Mississippi, Texas.
Wichita Colorado, Kansas, New Mexico, Oklahoma.

<<END RULING>>
 

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