7520 Rate

By: Martin M. Shenkman, CPA, MBA, JD

Section 7520 of the Internal Revenue Code provides for specified interest rates which the Internal Revenue Service publishes monthly. A host of different tax planning techniques and results are required to be calculated using the mandated interest rates under Code Section 7520. These include the periodic annuity payment to be made to the grantor of a grantor retained annuity trusts (GRATs), the current (present) value of your interest in a house that you transfer to a qualified personal residence trust (QPRT), the value of certain annuities and life estates, etc. For many tax planning techniques, if the value of the assets involved appreciate at a rate greater then the 7520 you will have achieved some tax planning benefit from the plan.

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