Tax Update Blog

IRS Issues Applicable Federal Rates (AFR) for April 2021

March 16, 2021 | Blog

The IRS has released (Rev. Rul. 2021-7) the Applicable Federal Rates under Sec. 1274(d) of the Internal Revenue Code for April 2021. These rates are used for various tax purposes, including minimum rates for loans.

There are rates for "short-term," "mid-term," and "long-term" instruments. Short-term covers demand loans and instruments extending up to three years. Mid-term covers loans cover loans and instruments of over three years up to nine years. Long-term covers loans and instruments with maturities longer than nine years.


 AFR tables 1 and 4 from Rev Rul 2021-7


The Section 382 long-term tax-exempt rate used to compute the loss carryforward limits for corporation ownership changes during April 2021 is 1.51%

The Section 7520 rate is used for valuing annuities and other planning techniques for estate and gift tax purposes. The current historically-low rates provide beneficial estate planning opportunities. Ava Archibald's Insight, Estate and Gift Tax—Are You Prepared for Changes?, is a great place to learn more.

Related: Eide Bailly Mergers & Acquisition services.

Historical AFRs are available here

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