The section 7520 rate is used to discount the value of annuities, life estates, and remainders to present value, and is revised monthly. It is equal to 120% of the applicable federal mid-term rate under section 1274(d), but rounded to the nearest two-tenths of a percent.
Normally, the section 7520 rate for the month in which the gift or death occurs is used to calculated the gift or estate tax value of the annuity, life estate, or remainder. However, the income, gift, or estate tax value of a charitable life estate or remainder can be determined using the rate for the month in which the gift or death occurs or a rate for either of the two preceding months.
The section 7520 rate for a calendar month is usually announced by the Internal Revenue Service in the form of a Revenue Ruling that is released around the 18th of the preceding month. The following is a chart of the rates that have been announced by the IRS:
| Jan. | Feb. | Mar. | Apr. | May | Jun. | Jul. | Aug. | Sep. | Oct. | Nov. | Dec. | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1989 | NA | NA | 11.2%* | 11.6%* | 11.6% | 11.2% | 10.6% | 10.0% | 9.6% | 10.2% | 10.0% | 9.8% |
| 1990 | 9.6% | 9.8% | 10.2% | 10.6% | 10.6% | 11.0% | 10.6% | 10.4% | 10.2% | 10.6% | 10.6% | 10.2% |
| 1991 | 9.8% | 9.6% | 9.4% | 9.6% | 9.6% | 9.6% | 9.6% | 9.8% | 9.6% | 9.0% | 8.6% | 8.4% |
| 1992 | 8.2% | 7.6% | 8.0% | 8.4% | 8.6% | 8.4% | 8.2% | 7.8% | 7.2% | 7.0% | 6.8% | 7.4% |
| 1993 | 7.6% | 7.6% | 7.0% | 6.6% | 6.6% | 6.4% | 6.6% | 6.4% | 6.4% | 6.0% | 6.0% | 6.2% |
| 1994 | 6.4% | 6.4% | 6.4% | 7.0% | 7.8% | 8.4% | 8.2% | 8.4% | 8.4% | 8.6% | 9.0% | 9.4% |
| 1995 | 9.6% | 9.6% | 9.4% | 8.8% | 8.6% | 8.2% | 7.6% | 7.2% | 7.6% | 7.6% | 7.4% | 7.2% |
| 1996 | 6.8% | 6.8% | 6.6% | 7.0% | 7.6% | 8.0% | 8.2% | 8.2% | 8.0% | 8.0% | 8.0% | 7.6% |
| 1997 | 7.4% | 7.6% | 7.8% | 7.8% | 8.2% | 8.2% | 8.0% | 7.6% | 7.6% | 7.6% | 7.4% | 7.2% |
| 1998 | 7.2% | 6.8% | 6.8% | 6.8% | 6.8% | 7.0% | 6.8% | 6.8% | 6.6% | 6.2% | 5.4% | 5.4% |
| 1999 | 5.6% | 5.6% | 5.8% | 6.4% | 6.2% | 6.4% | 7.0% | 7.2% | 7.2% | 7.2% | 7.4% | 7.4% |
| 2000 | 7.4% | 8.0% | 8.2% | 8.0% | 7.8% | 8.0% | 8.0% | 7.6% | 7.6% | 7.4% | 7.2% | 7.0% |
| 2001 | 6.8% | 6.2% | 6.2% | 6.0% | 5.8% | 6.0% | 6.2% | 6.0% | 5.8% | 5.6% | 5.0% | 4.8% |
| 2002 | 5.4% | 5.6% | 5.4% | 5.6% | 6.0% | 5.8% | 5.6% | 5.2% | 4.6% | 4.2% | 3.6% | 4.0% |
| 2003 | 4.2% | 4.0% | 3.8% | 3.6% | 3.8% | 3.6% | 3.0% | 3.2% | 4.2% | 4.4% | 4.0% | 4.2% |
| 2004 | 4.2% | 4.2% | 4.0% | 3.8% | 3.8% | 4.6% | 5.0% | 4.8% | 4.6% | 4.4% | 4.2% | 4.2% |
| 2005 | 4.6% | 4.6% | 4.6% | 5.0% | 5.2% | 4.8% | 4.6% | 4.8% | 5.0% | 5.0% | 5.0% | 5.4% |
| 2006 | 5.4% | 5.2% | 5.4% | 5.6% | 5.8% | 6.0% | 6.0% | 6.2% | 6.0% | 5.8% | 5.6% | 5.8% |
| 2007 | 5.6% | 5.6% | 5.8% | 5.6% | 5.6% | 5.6% | 6.0% | 6.2% | 5.8% | 5.2% | 5.2% | 5.0% |
| 2008 | 4.4% | 4.2% | 3.6% | 3.4% | 3.2% | 3.8% | 4.2% | 4.2% | 4.2% | 3.8% | 3.6% | 3.4% |
| 2009 | 2.4% | 2.0% | 2.4% | 2.6% | 2.4% | 2.8% | 3.4% | 3.4% | 3.4% | 3.2% | 3.2% | 3.2% |
| 2010 | 3.0% | 3.4% | 3.2% | 3.2% | 3.4% | 3.2% | 2.8% | 2.6% | 2.4% | 2.0% | 2.0% | 1.8% |
| 2011 | 2.4% | 2.8% | 3.0% | 3.0% | 3.0% | 2.8% | 2.4% | 2.2% | 2.0% | 1.4% | 1.4% | 1.6% |
| 2012 | 1.4% | 1.4% | 1.4% | 1.4% | 1.6% | 1.2% | 1.2% | 1.0% | 1.0% | 1.2% | 1.0% | 1.2% |
| 2013 | 1.0% | 1.2% | 1.4% | 1.4% | 1.2% | 1.2% | 1.4% | 2.0% | 2.0% | 2.4% | 2.0% | 2.0% |
| 2014 | 2.2% | 2.4% | 2.2% | 2.2% | 2.4% | 2.2% |
* The rates shown for March and April of 1989 exist only for charitable transfers in May or June of 1989 because the donor may elect to apply a rate from one of the preceding two months. See Notice 89-60, 1989-1 C.B. 700, for details. Transfers actually made in March or April of 1989 are not valued using the rates shown above but using the 10% discount rate that applied before the effective date of section 7520. See Treas. Reg. section 20.2031-7A(d).
Before 1989, life estates, remainders, and annuities were valued as follows: