Interest rates for April 2026 remain elevated across all maturities, increasing the cost of related-party loans and reducing the tax efficiency of several estate planning techniques.
Summary of IRS Guidance
The IRS released monthly prescribed rates for April 2026.
These rates apply across a wide range of tax calculations, including:
Below-market loans under §7872
Imputed interest on seller-financed transactions under §1274
Valuation of annuities and remainder interests under §7520
Limitation calculations for net operating losses under §382
Low-income housing tax credit calculations under §42
Key Rates
Applicable Federal Rates (AFR)
Short-term (up to 3 years): 3.59%
Mid-term (3 to 9 years): 3.82%
Long-term (over 9 years): 4.62%
These rates increase based on compounding frequency and statutory multipliers, including 110%, 120%, and 130% of the AFR.
Adjusted AFR (for §1288 and other purposes)
Short-term: 2.72%
Mid-term: 2.89%
Long-term: 3.50%
§382 Limitation Rates
Adjusted long-term rate: 3.50%
Long-term tax…
