Interest rates have been at historic lows for so long they have become the “new normal.” This includes the Applicable Federal Rate published each month by the Internal Revenue Service for use in computing assigned interest charges. Since the AFR also happens to be integral to many complex estate planning techniques, low rates can spell big estate planning returns.
Chart A illustrates the difference between the prevailing AFRs for term loans originated in August 2014 and a benchmark comparison to the comparable, average rate over the last 20 years.
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