Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

Section 42.—Low-Income Housing Credit

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of November 1997. See Rev. Rul. 97–44, page 5.

Section 55.—Alternative Minimum Tax Imposed

How does § 1(h), as amended by the Taxpayer Relief Act of 1997, coordinate with the alternative minimum tax provisions. See Notice 97–59, page 7.

Section 280G.—Golden Parachute Payments

Federal short-term, mid-term, and long-term rates are set forth for the month of November 1997. See Rev. Rul. 97–44, page 5.

Section 382.—Limitation on Net Operating Loss Carryforwards and Certain Built-In Losses Following Ownership Change

The adjusted federal long-term rate is set forth for the month of November 1997. See Rev. Rul. 97–44, page 5.

Section 412.—Minimum Funding Standards

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of November 1997. See Rev. Rul. 97–44, page 5.

Section 446.—General Rule for Methods of Accounting

26 CFR 1.446–1: General rule for methods of accounting.

What procedures should taxpayers follow to obtain automatic consent to change their method of accounting for costs paid or incurred to convert or replace computer software to recognize dates beginning in the year 2000. See Rev. Proc. 97–50, page 8.

Section 467.—Certain Payments for the Use of Property or Services

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of November 1997. See Rev. Rul. 97–44, page 5.

Section 468.—Special Rules for Mining and Solid Waste Reclamation and Closing Costs

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of November 1997. See Rev. Rul. 97–44, page 5.

Section 481.—Adjustments Required by Changes in Method of Accounting

26 CFR 1.481–1: Adjustments in general.

26 CFR 1.481–4: Adjustments taken into account with consent.

What procedures should taxpayers follow to obtain automatic consent to change their method of accounting for costs paid or incurred to convert or replace computer software to recognize dates beginning in the year 2000. See Rev. Proc. 97–50, page 8.

Section 482.—Allocation of Income and Deductions Among Taxpayers

Federal short-term, mid-term, and long-term rates are set forth for the month of November 1997. See Rev. Rul. 97–44, page 5.

Section 483.—Interest on Certain Deferred Payments

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of November 1997. See Rev. Rul. 97–44, page 5.

Section 642.—Special Rules for Credits and Deductions

Federal short-term, mid-term, and long-term rates are set forth for the month of November 1997. See Rev. Rul. 97–44, page 5.

Section 807.—Rules for Certain Reserves

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of November 1997. See Rev. Rul. 97–44, page 5.

Section 846.—Discounted Unpaid Losses Defined

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of November 1997. See Rev. Rul. 97–44, page 5.

Section 911.—Citizens or Residents of the United States Living Abroad

26 CFR 1.911–1: Partial exclusion for earned income from sources within a foreign country and foreign housing costs.

Guidance is provided to individuals who fail to meet the eligibility requirements of section 911(d)(1) of the Internal Revenue Code because adverse conditions in a foreign country preclude the individual from meeting those requirements. A current list of countries and the dates those countries are subject to the section 911(d)(4) waiver is provided. See Rev. Proc. 97–51, page 9.

Section 1222.—Other Terms Relating to Capital Gains and Losses

What are the rules for netting gains and losses under § 1(h), as amended by the Taxpayer Relief Act of 1997. See Notice 97–59, page 7.

Section 1223.—Holding Period of Property

How does § 1(h), as amended by the Taxpayer Relief Act of 1997, coordinate with the rules for determining the holding period of property under § 1223. See Notice 97–59, page 7.

Section 1231.—Property Used in the Trade or Business and Involuntary Conversions

What are the rules for netting gains and losses under § 1(h), as amended by the Taxpayer Relief Act of 1997. See Notice 97–59, page 7.

Section 1235.—Sale or Exchange of Patents

How does § 1(h), as amended by the Taxpayer Relief Act of 1997, coordinate with the rules for the sale or exchange of patents under § 1235. See Notice 97–59, page 7.

Section 1250.—Gains From Dispositions of Certain Depreciable Realty

What are the rules for netting gains and losses under § 1(h), as amended by the Taxpayer Relief Act of 1997. See Notice 97–59, page 7.

November 10, 1997 4 1997–45 I.R.B.

Section 1256.—Section 1256 Contracts Marked to Market

How does § 1(h), as amended by the Taxpayer Relief Act of 1997, coordinate with the rules for gain or loss from section 1256 contracts. See Notice 97–59, page 7.

Section 1274.—Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property

(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 November 1997.

Rev. Rul. 97–44

This revenue ruling provides various prescribed rates for federal income tax purposes for November 1997 (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

REV. RUL. 97–44 TABLE 1

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. Finally, 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.

Applicable Federal Rates (AFR) for November 1997

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-Term

AFR 5.69% 5.61% 5.57% 5.55% 110% AFR 6.27% 6.17% 6.12% 6.09% 120% AFR 6.84% 6.73% 6.67% 6.64% 130% AFR 7.42% 7.29% 7.22% 7.18%

Mid-Term

AFR 6.10% 6.01% 5.97% 5.94% 110% AFR 6.72% 6.61% 6.56% 6.52% 120% AFR 7.34% 7.21% 7.15% 7.10% 130% AFR 7.96% 7.81% 7.74% 7.69% 150% AFR 9.22% 9.02% 8.92% 8.86% 175% AFR 10.80% 10.52% 10.39% 10.30%

Long-Term

AFR 6.42% 6.32% 6.27% 6.24% 110% AFR 7.07% 6.95% 6.89% 6.85% 120% AFR 7.72% 7.58% 7.51% 7.46% 130% AFR 8.39% 8.22% 8.14% 8.08%

1997–45 I.R.B. 5 November 10, 1997

REV. RUL. 97–44 TABLE 2

Adjusted AFR for November 1997

Period for Compounding

Annual Semiannual Quarterly Monthly Short-term adjusted AFR 3.92% 3.88% 3.86% 3.85%

Mid-term adjusted AFR 4.35% 4.30% 4.28% 4.26%

Long-term adjusted AFR 5.15% 5.09% 5.06% 5.04%

REV. RUL. 97–44 TABLE 3

Rates Under Section 382 for November 1997

Adjusted federal long-term rate for the current month 5.15%

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.) 5.27%

REV. RUL. 97–44 TABLE 4

Appropriate Percentages Under Section 42(b)(2) for November 1997

Appropriate percentage for the 70% present value low-income housing credit 8.47%

Appropriate percentage for the 30% present value low-income housing credit 3.63%

REV. RUL. 97–44 TABLE 5

Rate Under Section 7520 for November 1997

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 7.4%

Section 1288.—Treatment of Original Issue Discount on Tax-Exempt Obligations

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of November 1997. See Rev. Rul. 97–44, page 5.

Section 7520.—Valuation Tables

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of November 1997. See Rev. Rul. 97–44, page 5

Section 7872.—Treatment of Loans with Below-Market Interest Rates

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of November 1997. See Rev. Rul. 97–44, page 5.

November 10, 1997 6 1997–45 I.R.B.