IRS Publishes 2014 Interest Rates for Special Use Value of Farms

Section 2032A. -- Valuation of Certain Farm, Etc., Real Property

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

ISSUE

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

Under 2032A(e)(7)(A)(ii) of the Internal Revenue Code, rates on new Farm Credit System Bank loans are used in computing the special use value of real property used as a farm for which an election is made under 2032A. The rates in Table 1 of this revenue ruling may be used by estates that value farmland under 2032A as of a date in 2014.

Average annual effective interest rates, calculated in accordance with 2032A(e)(7)(A) and 20.2032A-4(e) of the Estate Tax Regulations, to be used under 2032A(e)(7)(A)(ii), are set forth in the accompanying Table of Interest Rates (Table 1). The states within each Farm Credit System Bank Territory are set forth in the accompanying Table of Farm Credit System Bank Territories (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 2013 are in Rev. Rul. 2013-19, 2013-39 I.R.B. 240. For rate information for years prior to 2013, see Rev. Rul. 2012-26, 2012-39 I.R.B. 358, and other revenue rulings that are referenced therein.

DRAFTING INFORMATION

The principal author of this revenue ruling is Lane Damazo of the Office of the Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this revenue ruling, contact Lane Damazo at (202) 317-6859 (not a toll-free number).

                       REV. RUL. 2014-21 TABLE 1