Disclaimer: General educational research only — not legal, tax or financial advice. Valuations depend on the exact date, terms and ages involved. Confirm figures with the IRS and an estate planning attorney or tax professional before acting.
Estate Planning Data & Research → Section 7520 rate history
When you give away part of an asset and keep part of it, the IRS has to put a value on each piece. That happens when you leave a house to your children but keep the right to live there, set up a charitable remainder trust, or put assets in a grantor retained annuity trust (GRAT). The interest rate used for that math is the Section 7520 rate, which the IRS publishes every month. For November 2026 it is 6.2%, the highest since August 2007. This page lists every monthly Section 7520 rate from January 2016 through November 2026, along with the applicable federal rates (AFRs) used for family loans, and shows in dollars how the rate changes the outcome of common estate plans.
If you’re still deciding between a will and a living trust before getting into advanced techniques, start with our plain-English guide to trust vs. will. It covers costs, probate and when a trust is worth it for your family.
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Key findings
- 6.2% for November 2026. The rate jumped 0.6 points from 5.6% in October. It is the highest Section 7520 rate since August 2007, which was also 6.2% (Rev. Rul. 2026-21; Rev. Rul. 2007-50).
- From 0.4% to 6.2% in six years. The rate sat at its 2016–2026 low of 0.4% from August through November 2020. It has been at 4.2% or higher every month since January 2023.
- Up 1.6 points in 2026 alone. The rate started the year at 4.6% and has risen or held steady every month since April, reaching 6.2% in November.
- A gift of a home is worth less at high rates. If a 75-year-old gives a $500,000 home to her children but keeps the right to live there for life, the taxable gift of the future interest is about $261,700 at 6.2%. At 2.0% it would be about $397,200, and at 0.4% about $476,700.
- GRATs get harder. A two-year GRAT only passes value to the family if the assets grow faster than the Section 7520 rate. With assets growing 7% a year, a $1 million zeroed-out GRAT would pass about $103,700 at a 0.4% rate but only about $12,700 at 6.2%.
- Family loans cost more interest. For a nine-year loan made in November 2026, the mid-term AFR is 5.08%, so a $300,000 family loan needs about $15,240 of interest a year to avoid gift tax issues. A loan made in January 2021 needed only $1,560 a year at 0.52%.
- December’s rate is pending. The IRS normally publishes the next month’s rates in the second half of the prior month. We’ll add December 2026 when the IRS releases that ruling.
Section 7520 rate by month, 2016–2026
The Section 7520 rate for each valuation month, from the IRS’s monthly revenue rulings. The rate is 120% of the federal mid-term rate, rounded to the nearest 0.2%.
| Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026 | 4.6% | 4.6% | 4.8% | 4.6% | 5.0% | 5.0% | 5.2% | 5.2% | 5.4% | 5.6% | 6.2% | pending |
| 2025 | 5.2% | 5.4% | 5.4% | 5.0% | 5.0% | 5.0% | 5.0% | 4.8% | 4.8% | 4.6% | 4.6% | 4.6% |
| 2024 | 5.2% | 4.8% | 5.0% | 5.2% | 5.4% | 5.6% | 5.4% | 5.2% | 4.8% | 4.4% | 4.4% | 5.0% |
| 2023 | 4.6% | 4.6% | 4.4% | 5.0% | 4.4% | 4.2% | 4.6% | 5.0% | 5.0% | 5.4% | 5.6% | 5.8% |
| 2022 | 1.6% | 1.6% | 2.0% | 2.2% | 3.0% | 3.6% | 3.6% | 3.8% | 3.6% | 4.0% | 4.8% | 5.2% |
| 2021 | 0.6% | 0.6% | 0.8% | 1.0% | 1.2% | 1.2% | 1.2% | 1.2% | 1.0% | 1.0% | 1.4% | 1.6% |
| 2020 | 2.0% | 2.2% | 1.8% | 1.2% | 0.8% | 0.6% | 0.6% | 0.4% | 0.4% | 0.4% | 0.4% | 0.6% |
| 2019 | 3.4% | 3.2% | 3.2% | 3.0% | 2.8% | 2.8% | 2.6% | 2.2% | 2.2% | 1.8% | 2.0% | 2.0% |
| 2018 | 2.6% | 2.8% | 3.0% | 3.2% | 3.2% | 3.4% | 3.4% | 3.4% | 3.4% | 3.4% | 3.6% | 3.6% |
| 2017 | 2.4% | 2.6% | 2.4% | 2.6% | 2.4% | 2.4% | 2.2% | 2.4% | 2.4% | 2.2% | 2.4% | 2.6% |
| 2016 | 2.2% | 2.2% | 1.8% | 1.8% | 1.8% | 1.8% | 1.8% | 1.4% | 1.4% | 1.6% | 1.6% | 1.8% |
The CSV download has every month with the unrounded 120% mid-term figure, the short-, mid- and long-term AFRs and the revenue ruling number.
Yearly averages: Section 7520 rate and AFRs
Simple averages of the monthly figures. AFRs are the annual-compounding rates from Table 1 of each revenue ruling. Short-term is for loans of 3 years or less, mid-term for over 3 and up to 9 years, and long-term for over 9 years.
| Year | Section 7520 low | Section 7520 high | Section 7520 average | Short-term AFR average | Mid-term AFR average | Long-term AFR average |
|---|---|---|---|---|---|---|
| 2026 (Jan–Nov) | 4.6% | 6.2% | 5.11% | 3.93% | 4.23% | 4.92% |
| 2025 | 4.6% | 5.4% | 4.95% | 4.04% | 4.12% | 4.72% |
| 2024 | 4.4% | 5.6% | 5.03% | 4.71% | 4.19% | 4.43% |
| 2023 | 4.2% | 5.8% | 4.88% | 4.82% | 4.06% | 4.12% |
| 2022 | 1.6% | 5.2% | 3.25% | 2.31% | 2.70% | 2.94% |
| 2021 | 0.6% | 1.6% | 1.07% | 0.16% | 0.90% | 1.82% |
| 2020 | 0.4% | 2.2% | 0.95% | 0.58% | 0.79% | 1.39% |
| 2019 | 1.8% | 3.4% | 2.60% | 2.17% | 2.16% | 2.52% |
| 2018 | 2.6% | 3.6% | 3.25% | 2.28% | 2.73% | 2.98% |
| 2017 | 2.2% | 2.6% | 2.42% | 1.20% | 2.00% | 2.68% |
| 2016 | 1.4% | 2.2% | 1.77% | 0.68% | 1.44% | 2.22% |
What the Section 7520 rate does
Section 7520 of the Internal Revenue Code says that the value of any annuity, life interest, term of years, remainder or reversionary interest is figured with IRS tables and an interest rate equal to 120% of the federal mid-term rate for the month of the valuation, rounded to the nearest 0.2%. In plain terms, the rate is the IRS’s assumption about how much the property will earn while someone holds the current interest.
A higher rate means the IRS assumes the current holder gets more value. That makes the present interest (an income stream, an annuity, a right to live in a house) worth more, and the future interest (what the children or a charity receive later) worth less. A lower rate does the opposite. That single see-saw drives most of the planning effects below.
The rate applies to gifts made during life and to estates at death, so it matters both when you set up a plan and when a family settles an estate that includes a life estate, an annuity or a trust interest.
How the rate changes common family plans
Keeping the right to live in your home
Some parents deed a home to their children but keep a life estate, or put it in a qualified personal residence trust (QPRT) for a set number of years. The gift is only the children’s future interest. IRS valuation tables (Table 2010CM mortality with the Section 7520 rate) put that value lower when rates are high.
| Age of the person keeping the life estate | Gift of future interest at 0.4% | at 2.0% | at 4.6% | at 6.2% |
|---|---|---|---|---|
| 65 | 92.7% of value | 69.6% | 45.9% | 36.5% |
| 75 | 95.3% | 79.4% | 60.8% | 52.3% |
| 85 | 97.4% | 88.2% | 76.1% | 69.9% |
For a $500,000 home and a 75-year-old parent, the gift of the remainder is about $476,700 at 0.4%, $397,200 at 2.0%, $303,800 at 4.6% (January 2026) and $261,700 at 6.2% (November 2026). The same tables value a surviving spouse’s life estate when an estate is settled. Gift value isn’t the only thing that matters. With a plain retained life estate, the home is still included in your taxable estate at death under section 2036, so the deed mainly changes who owns the home and how much of your gift exemption is used; it doesn’t remove the home from your estate. A QPRT removes the home from your estate only if you outlive the trust term, and then the children take your original tax basis instead of the stepped-up basis they’d usually get by inheriting. For many families that basis cost outweighs the estate-tax benefit, which is why QPRTs are used mainly by people with estates large enough to face federal or state estate tax.
Grantor retained annuity trusts (GRATs)
In a GRAT you put assets in a trust and take back fixed annual payments for a set term. What’s left at the end goes to your children. The IRS values your retained payments with the Section 7520 rate, so a “zeroed-out” GRAT is set up so the payments equal the full value going in, and the taxable gift is close to zero. The family only gets something if the assets grow faster than the Section 7520 rate.
| Section 7520 rate | Annual payment on a $1,000,000 two-year zeroed-out GRAT | Left for the family if assets grow 7% a year |
|---|---|---|
| 0.4% (Aug–Nov 2020) | $503,002 | $103,686 |
| 2.0% (Jan 2020) | $515,050 | $78,748 |
| 4.6% (Jan 2026) | $534,759 | $37,950 |
| 6.2% (Nov 2026) | $546,966 | $12,680 |
These figures assume payments at the end of each year and use the term-certain annuity factor. They ignore trustee fees and the chance that the person who set up the GRAT dies during the term, in which case the assets are generally pulled back into the estate.
Charitable trusts
Rising rates cut both ways for charitable gifts. A charitable remainder annuity trust (CRAT), which pays you or your family an annuity and leaves the rest to charity, gets a bigger charitable deduction when the rate is high, and it more easily passes the IRS test that the charity’s share is worth at least 10% of the gift. A charitable lead annuity trust (CLAT), which pays a charity first and leaves the remainder to your children, works best when the rate is low. When a charitable deduction is involved, the law lets you choose the rate for the month of the gift or either of the two months before it. For a gift in November 2026, that means 5.4% (September), 5.6% (October) or 6.2% (November).
Loans to children and grandchildren
Family loans use the applicable federal rates rather than the Section 7520 rate. A loan that charges less than the AFR is treated as a “below-market” gift loan under section 7872, and the forgone interest can be treated as a gift and as income to the lender. A term loan generally uses the AFR for the month it’s made for its whole life, so a nine-year loan made in January 2021 at the 0.52% mid-term rate kept that rate. On $300,000, that’s about $1,560 a year of interest, compared with $11,430 at the January 2026 mid-term rate (3.81%) and $15,240 at November 2026’s 5.08%.
Section 7872 has two important exceptions for loans directly between individuals. Gift loans of $10,000 or less in total are generally exempt, unless the money is used to buy income-producing assets. For gift loans of up to $100,000 in total, the interest the lender must report is limited to the borrower’s net investment income, and it’s treated as zero if that income is $1,000 or less, as long as tax avoidance isn’t a principal purpose.
What this means if you’re planning
- Know which side of the rate your plan sits on. High rates favor plans where you keep the current interest and pass a future interest: QPRTs, retained life estates and charitable remainder annuity trusts. Low rates favor GRATs, charitable lead trusts and family loans.
- Timing within a month can matter. The rate is fixed for each calendar month and is announced in the second half of the prior month. Families making a large gift can see the next month’s rate before deciding when to sign.
- The rate is only one input. Ages, the term of years, payment timing and the asset’s real growth matter as much. A plan that looks good on paper at today’s rate may not make sense once income tax basis, estate inclusion and family goals are weighed.
- Most families never need this math. With the federal basic exclusion at $15 million per person for 2026, these techniques mostly matter for larger estates, for people in states with their own estate or inheritance tax, and for charitable planning. For most households, the first decisions are simpler: a will or a living trust, beneficiary designations, and powers of attorney.
- Existing plans keep their rate. A GRAT, QPRT or loan set up when rates were low generally keeps the valuation it was given at the start. Rising rates don’t undo it, but they do change what a new plan would look like.
Related research: life expectancy and actuarial tables matter in court too. In a 2026 Tax Court gift tax case, the court used the standard actuarial tables rather than an expert’s adjusted life expectancy. See estate and gift tax cases in U.S. Tax Court for 301 estate and gift tax rulings since 2000.
Methodology
- Monthly Section 7520 rates and AFRs come from the IRS monthly revenue rulings on applicable federal rates: Table 1 (short-, mid- and long-term AFRs, annual compounding, and the 120% mid-term rate) and Table 5 (the Section 7520 rate). We downloaded all 131 rulings from January 2016 (Rev. Rul. 2016-1) through November 2026 (Rev. Rul. 2026-21) and parsed each one.
- Each month was cross-checked against the IRS’s Section 7520 web tables. Every rate matched except one display error on the IRS’s prior-years page: April 2020 shows the 120% mid-term figure as 1.9, while Rev. Rul. 2020-09 shows 1.19% (the Section 7520 rate of 1.2% matches). We use the ruling.
- “Highest since August 2007” compares November 2026 with every month back to 2000 on the IRS’s Section 7520 web tables; the August 2007 rate of 6.2% was confirmed in Rev. Rul. 2007-50.
- Life-estate and remainder percentages were computed with the formula and Table 2010CM in Treasury Regulation section 20.2031-7(d), which applies to valuation dates on or after June 1, 2023. Our calculation reproduces the regulation’s own worked examples exactly (for example, a remainder factor of 0.69903 for age 75 at 3.2%). Results are rounded.
- GRAT figures use the term-certain annuity factor with end-of-year payments and an assumed 7% annual growth. They are illustrations, not quotes. Real GRATs often use increasing payments, different terms and different payment timing.
- Loan interest figures are simple first-year interest at the annual-compounding mid-term AFR. Section 7872 tests term gift loans against the AFR compounded semiannually (5.02% mid-term for November 2026), so the exact minimum depends on how the note compounds interest.
- This is national data. The Section 7520 rate and AFRs are the same in every state, so a state table doesn’t apply. States with their own estate or gift taxes generally follow federal valuation rules, but check your state.
Frequently asked questions
What is the Section 7520 rate for November 2026?
It is 6.2%, from Rev. Rul. 2026-21. That’s 120% of the November 2026 federal mid-term rate (6.11%), rounded to the nearest 0.2%. It is up from 5.6% in October 2026 and is the highest rate since August 2007.
What is the Section 7520 rate used for?
It values annuities, life estates, terms of years and remainder interests for federal gift, estate and income tax purposes. Common uses are retained life estates in a home, QPRTs, GRATs, charitable remainder and charitable lead trusts, and valuing a surviving spouse’s or other beneficiary’s interest in an estate.
Is the Section 7520 rate the same as the AFR?
No. The applicable federal rates are the base rates the Treasury sets each month for loans of different lengths. The Section 7520 rate is derived from one of them: it is 120% of the mid-term AFR, rounded to the nearest 0.2%. Family loans use the AFR itself, not the Section 7520 rate.
Does a higher Section 7520 rate make gifts cheaper?
It depends on the type of gift. When you give a future interest and keep the current one, such as a home with a retained life estate or a QPRT, a higher rate lowers the value of the gift. When you keep a fixed annuity and give what’s left, as in a GRAT or a charitable lead annuity trust, a higher rate makes it harder to pass value to the family.
When will the December 2026 rate be published?
The IRS normally issues the next month’s revenue ruling around the third week of the current month, so the December 2026 rate is expected in mid-to-late November. This page will be updated when it’s released.
What interest rate should I charge on a loan to my child?
To avoid below-market loan rules, a family term loan generally needs to charge at least the AFR for its length in the month it’s made. In November 2026 that’s 4.67% for loans of 3 years or less, 5.08% for over 3 to 9 years and 5.52% for over 9 years (annual compounding). Small loans of $10,000 or less in total generally fall outside the rules. Have the loan put in writing with a signed note and a payment schedule.
Sources
Data
- IRS, Section 7520 interest rates (current year): https://www.irs.gov/businesses/small-businesses-self-employed/section-7520-interest-rates
- IRS, Section 7520 interest rates for prior years: https://www.irs.gov/businesses/small-businesses-self-employed/section-7520-interest-rates-for-prior-years
- IRS, Applicable federal rates (index of monthly revenue rulings): https://www.irs.gov/applicable-federal-rates
- IRS, Rev. Rul. 2026-21 (November 2026 rates): https://www.irs.gov/pub/irs-drop/rr-26-21.pdf
- IRS, Rev. Rul. 2026-19 (October 2026 rates): https://www.irs.gov/pub/irs-drop/rr-26-19.pdf
- IRS, Rev. Rul. 2026-2 (January 2026 rates): https://www.irs.gov/pub/irs-drop/rr-26-02.pdf
- IRS, Rev. Rul. 2021-1 (January 2021 rates): https://www.irs.gov/pub/irs-drop/rr-21-01.pdf
- IRS, Rev. Rul. 2020-09 (April 2020 rates): https://www.irs.gov/pub/irs-drop/rr-20-09.pdf
- IRS, Rev. Rul. 2007-50 (August 2007 rates): https://www.irs.gov/pub/irs-drop/rr-07-50.pdf
- All 131 monthly rulings, January 2016 (Rev. Rul. 2016-1) through November 2026 (Rev. Rul. 2026-21), are listed by number in the CSV download.
Law and rules
- 26 U.S.C. 7520 (valuation tables and rate): https://www.law.cornell.edu/uscode/text/26/7520
- 26 U.S.C. 7872 (below-market and gift loans): https://www.law.cornell.edu/uscode/text/26/7872
- 26 U.S.C. 1274(d) (applicable federal rates), 2036 (retained life estate), 2702 (GRATs and QPRTs), 664 (charitable remainder trusts)
- Treasury Regulation 20.2031-7(d), Table 2010CM and remainder formula (valuation dates on or after June 1, 2023): https://www.ecfr.gov/current/title-26/section-20.2031-7
- IRS, Actuarial tables: https://www.irs.gov/retirement-plans/actuarial-tables
Cite this data
Family Estate Guide. “Section 7520 Rate History, 2016–2026.” November 2026. https://familyestateguide.com/estate-planning-data/section-7520-rate-history/ (data: IRS monthly revenue rulings on applicable federal rates, Rev. Rul. 2016-1 through 2026-21; 26 U.S.C. 7520; Treas. Reg. 20.2031-7).
Published November 1, 2026 by Family Estate Guide. Data vintage: IRS Rev. Rul. 2026-21 (November 2026) and prior monthly rulings back to January 2016. Editorial standards.