The Internal Revenue Service has released the Applicable Federal Rates (AFRs) for February 2022. AFRs are published monthly and represent the minimum interest rates that should be charged for family loans to avoid tax complications.
Here are the rates for February 2022:
| Annual | Semiannual | Quarterly | Monthly | |
| Short-term | 0.59% | 0.59% | 0.59% | 0.59% |
| Mid-term | 1.40% | 1.40% | 1.40% | 1.40% |
| Long-term | 1.92% | 1.91% | 1.91% | 1.90% |
The Section 7520 interest rate for February 2022 is 1.6 percent.
The Section 7520 interest rate is the interest rate used in a
common estate tax planning technique called a "grantor
retained annuity trust" or "GRAT." In general, the
lower the interest rate, the more effective the transaction is for
reducing estate taxes.
Find the full revenue ruling for February 2022 here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.