Final regulations: Adjusted federal rate methodologies | KPMG | GLOBAL

Final regulations: Adjusted federal rate methodologies, sections 382 and 1288

U.S. adjusted federal rate methodologies

The Treasury Department and IRS today released for publication in the Federal Register final regulations (T.D 9763) concerning the methods used to determine the adjusted applicable federal rates (adjusted AFRs) under section 1288 and the adjusted federal long-term rate under section 382.


Related content

For tax-exempt obligations, the regulations affect the determination of original issue discount under section 1273 and of total unstated interest under section 483. 

The regulations also affect the determination of the limitations under sections 382 and 383 on the use of certain operating loss carryforwards, tax credits, and other attributes of corporations following ownership changes.

Today’s final regulations [PDF 202 KB] adopt “without substantive change” regulations that were proposed in early 2015. As noted in the preamble to the final regulations, no comments were received with respect to the 2015 proposed regulations. 

Effective date

The final regulations apply to determine the adjusted AFRs, adjusted federal long-term, rate, and long-term tax-exempt rate beginning with the rates determined during August 2016 that apply during September 2016.

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