Tax Planning

Key Tax Planning Charges for February 2022

The Estate Planning & Probate Litigation Blog

The Section 7520 rate for February 2022 is 1.6% which is the same as the January rate. The applicable federal rates (“AFRs”) for February 2022 are as follows:

The short-term AFRs are used for loans with a term of three years or less, the mid-term AFRs are used for loans with a term of four to nine years and the long-term AFRs are used for loans with a term of longer than nine years. The AFRs are used in planning transactions such as sales to a defective grantor trust and intrafamily loans lead trusts, qualified personal residence trusts and grantor retained annuity trusts. Generally, the Section 7520 rate for the month in which the transfer occurs is used to calculate the value of the annuity, life estate or remainder. However, the rate for the month in which the transfer occurs or the rate for either of the two preceding months can be used to determine the value of a charitable life estate or remainder.

Related Articles