US November tax rates rise for financing and ownership-change calculations

November's annual-compounding applicable federal rates are 4.67% for short-term debt, 5.08% for mid-term debt and 5.52% for long-term debt. They rise from October's 4.25%, 4.61% and 5.22%, increases of 0.42, 0.47 and 0.30 percentage points. Separate columns apply to semiannual, quarterly and monthly compounding.^[2][3]

Section 1274 of the Internal Revenue Code uses these rates in determining the issue price of qualifying debt issued for property. Its term bands are not over three years, over three but not over nine years, and over nine years. The statute also retains its lowest-three-month-rate rule for a relevant written sale contract; November's rate is not automatically the applicable rate for every transaction.^[5]

The financing relevance extends to certain bona fide US-dollar loans between controlled entities. Treasury Regulation 1.482-2 provides a safe-haven range of 100% to 130% of the applicable federal rate, subject to its conditions. It excludes loans whose principal or interest is expressed in another currency and lenders regularly making loans to unrelated parties. The general arm's-length test considers comparable independent transactions, duration, security and the borrower's credit standing. The regulation also prescribes semiannual compounding for specified adjustments and a 110% lower limit for covered sale-leasebacks.^[7]

For qualifying term loans, the regulation generally refers to the rate when the loan is made; demand loans use the applicable short-term rate while amounts remain outstanding. Groups should therefore distinguish new November financing from existing fixed-term loans rather than reprice all balances automatically.^[7]

The ruling separately sets November's section 382 long-term tax-exempt rate at 4.18%, compared with 3.95% for October. The basic annual limitation on pre-change losses is the value of the old loss corporation multiplied by that rate, subject to the section's adjustments and exceptions. The ownership-change rate is the highest adjusted federal long-term rate for the month of change and the two preceding months, not the headline long-term AFR.^[2][3][4][6]

This is a monthly rate-setting development under existing law, not a new interest deduction or loss-relief regime. Its practical significance is the changed numerical input for the relevant financing or ownership-change calculation; the underlying qualification, timing and valuation rules still govern.^{[2][4][5][6][7]}