Section 846.—Discounted Unpaid Losses Defined

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of January 2004. See Rev. Rul. 2004-2, page 265.

26 CFR 1.846-1: Application of discount factors.

The loss payment patterns and discount factors are set forth for the 2003 accident year. These factors will

2004-2 I.R.B. 265 January 12, 2004

income funds described in § 642(c)(5) that have been in existence for less than 3 taxable years immediately preceding the taxable year in which the transfer was made.

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 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 2004 to pooled

REV. RUL. 2004–2 TABLE 1

Applicable Federal Rates (AFR) for January 2004

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-Term

AFR 1.71% 1.70% 1.70% 1.69% 110% AFR 1.88% 1.87% 1.87% 1.86% 120% AFR 2.05% 2.04% 2.03% 2.03% 130% AFR 2.22% 2.21% 2.20% 2.20%

Mid-Term

AFR 3.52% 3.49% 3.47% 3.46% 110% AFR 3.88% 3.84% 3.82% 3.81% 120% AFR 4.23% 4.19% 4.17% 4.15% 130% AFR 4.59% 4.54% 4.51% 4.50% 150% AFR 5.31% 5.24% 5.21% 5.18% 175% AFR 6.20% 6.11% 6.06% 6.03%

Long-Term

AFR 5.01% 4.95% 4.92% 4.90% 110% AFR 5.52% 5.45% 5.41% 5.39% 120% AFR 6.03% 5.94% 5.90% 5.87% 130% AFR 6.54% 6.44% 6.39% 6.36%

REV. RUL. 2004–2 TABLE 2

Adjusted AFR for January 2004

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-term adjusted AFR

1.44% 1.43% 1.43% 1.43%

Mid-term adjusted AFR 2.67% 2.65% 2.64% 2.64%

Long-term adjusted AFR

4.40% 4.35% 4.33% 4.31%

REV. RUL. 2004–2 TABLE 3

Rates Under Section 382 for January 2004

Adjusted federal long-term rate for the current month 4.40%

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.) 4.58%

January 12, 2004 266 2004-2 I.R.B.

REV. RUL. 2004–2 TABLE 4

Appropriate Percentages Under Section 42(b)(2) for January 2004

Appropriate percentage for the 70% present value low-income housing credit 7.99%

Appropriate percentage for the 30% present value low-income housing credit 3.42%

REV. RUL. 2004–2 TABLE 5

Rate Under Section 7520 for January 2004

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 4.2%

REV. RUL. 2004–2 TABLE 6

Deemed Rate for Transfers to New Pooled Income Funds During 2004

Deemed rate of return for transfers during 2004 to pooled income funds that have been in existence for less than 3 taxable years 4.8%