IRS publishes June 2026 AFRs and valuation rates

Rev. Rul. 2026-11, §1274 AFR tables and prescribed federal rates.

The IRS raised several important federal rates for June 2026. The §7520 rate is now 5.0%, which affects estate-planning valuations, intra-family loans, deferred-payment deals, and tax-credit calculations.

Overview

The IRS issued Revenue Ruling 2026-11, setting the federal rates for June 2026. This ruling updates the following:

• Applicable Federal Rates (AFRs) under §1274

• Adjusted AFRs under §1288

• §382 long-term tax-exempt rates

• Low-income housing credit percentages under §42

• The §7520 valuation rate used in estate and gift tax planning

These monthly rate rulings are routine, but they have a real impact. They directly affect pricing assumptions, valuation discounts, financing structures, and tax modeling in many areas. Each month, a single update can change estate freezes, installment sales, and distressed M&A modeling across the industry.

Key June 2026 Rates

Applicable Federal Rates (AFRs)

IRS published the following annual AFRs for June 2026:

• Short-term AFR: 3.85%

• Mid-term AFR: 4.13%

• Long-term AFR: 4.87%

The long-term AFR with monthly compounding is 4.76%.

These rates apply to:

• Related-party loans

• Installment sales

• Below-market loan calculations

• Certain deferred compensation arrangements

• Imputed interest computations

Adjusted AFRs

IRS also published adjusted AFRs under §1288:

• Short-term adjusted AFR: 2.91%

• Mid-term adjusted AFR: 3.13%

• Long-term adjusted AFR: 3.68%

§382 Limitation Rates

The adjusted federal long-term rate for June 2026 is 3.68%.

That rate affects:

• §382 limitation calculations after ownership changes

• NOL utilization modeling in acquisitions

• Distressed company tax attribute valuations

The long-term tax-exempt rate also remains 3.68%.

Low-Income Housing Credit Percentages

IRS published the June 2026 applicable percentages for the low-income housing credit under §42:

• 70% present value credit: 8.05%

• 30% present value credit: 3.45%

The ruling also reiterates the statutory floor, which provides that the applicable percentage for certain non-federally subsidized new buildings cannot fall below 9%.

§7520 Rate Increases to 5.0%

The June 2026 §7520 rate is 5.0%.

This rate is especially important for:

• Grantor retained annuity trusts (GRATs)

• Charitable remainder trusts

• Split-interest transfers

• Life estate and remainder valuations

• Intra-family wealth transfer planning

Higher §7520 rates generally:

• Favor GRAT structures

• Reduce the present value of retained interests

• Affect actuarial valuation assumptions

• Change the economics of estate freeze techniques

Why It Matters

• This is a routine monthly release, not a policy shift.

• The 5.0% §7520 rate continues the higher-rate environment, which materially changes estate-planning assumptions compared to the near-zero-rate years.

• Tax practitioners modeling installment transactions or related-party lending must update June transactions to use the new AFRs.

• §382 practitioners and M&A advisors should update NOL limitation calculations using the new 3.68% long-term rate.

The Takeaway

June 2026 continues a period of higher interest rates, which affects estate planning, tax attribute valuations, and related-party financing across the market.