Applicable Federal Rate of 4.2% For December 2004

In Rev. Rul. 2004-106; 2004-49 IRB 1 (17 Nov 2004), the IRS has announced the Applicable Federal Rate for December of 2004. The AFR under Section 7520 for the month of December will be 4.2%. The rates for November of 4.2% or October of 4.4% may also be used. The highest AFR is beneficial for charitable deductions of remainder interests. The lowest AFR is best for lead trusts and life estate reserved agreements. With a gift annuity, if the annuitant desires greater tax-free payments, the lowest AFR is preferable. During 2004, pooled income funds in existence less than three tax years must use a 4.8% deemed rate of return. Federal rates are available at the IRS Web Site