IRS updates AFR, §382, §42, and §7520 rates for March 2026

IRS Rev. Rul. 2026-6

IRS released monthly prescribed interest rates for March 2026 in Rev. Rul. 2026-6.

The ruling provides:

• Applicable federal rates under §1274(d)

• Adjusted AFR under §1288(b)

• §382 long-term rates

• §42 low-income housing credit percentages

• §7520 valuation rate

This is routine monthly guidance. It updates rate tables only.

Key Rates for March 2026

Applicable Federal Rates under §1274(d)

Annual compounding AFR:

• Short-term: 3.59%

• Mid-term: 3.93%

• Long-term: 4.72%

Long-term AFR with monthly compounding: 4.63%.

These rates apply to debt instruments, below-market loans, installment sales, and other transactions requiring imputed interest.

Adjusted AFR under §1288(b)

Annual compounding adjusted AFR:

• Short-term: 2.72%

• Mid-term: 2.97%

• Long-term: 3.58%

Used primarily for original issue discount accrual on certain debt instruments.

§382 Rates

• Adjusted federal long-term rate: 3.58%

• Long-term tax-exempt rate: 3.58%

These rates limit the annual use of net operating losses after an ownership change.

§42 Low-Income Housing Credit Percentages

• 70% present value credit: 8.00%

• 30% present value credit: 3.43%

The 9% floor for non-federally subsidized new buildings placed in service after July 30, 2008, continues to apply.

§7520 Rate

• 4.8%

Used to value annuities, life estates, terms of years, remainders, and reversions.

Why It Matters

• The §1274 AFR directly affects installment sales, seller financing, private loans, and related-party debt pricing for March transactions.

• The §382 rate determines how much pre-change NOL can be used annually after an ownership change. This is material in M&A.

• The §7520 rate affects estate planning valuations, including GRATs and charitable remainder trusts.

• The §42 percentages determine pricing and underwriting assumptions for LIHTC projects placed in service this month.

This is a routine rate update. No policy shift. No interpretive change.

Statutory Framework

• §1274 requires the use of AFR to determine the issue price of certain debt issued for property.

• §382 limits post-change NOL usage based on the value of the loss corporation multiplied by the long-term tax-exempt rate.

• §42 sets present value credit percentages for low-income housing projects.

• §7520 prescribes a monthly interest rate equal to 120% of the mid-term AFR for valuation purposes.

Result

Rates apply to transactions and valuations occurring in March 2026.

Reader Takeaway

If you close a financing, structure a related-party loan, value a split-interest transfer, or test §382 limitations in March 2026, use these updated rates.

The Takeaway

This ruling is mechanical but operationally important. March closings, estate freezes, and ownership change analyses must reflect the new AFR and §7520 figures. Timing matters.