Updated November 5, 2026. Quick answer: The section 7520 rate for January 2026 is 4.6%, from Rev. Rul. 2026-2, Table 5. It is unchanged from 4.6% in December 2025 (Rev. Rul. 2025-24). The IRS table lists the 120% mid-term figure as 4.57 (the mid-term AFR is 3.81%), and the rate rounds that figure to the nearest two-tenths of one percent. The IRS’s file of the ruling shows a last-modified date of December 15, 2025.
Applicable federal rates for the same month: the January 2026 AFR rates.
The January 2026 rate
| Step | January 2026 |
|---|---|
| Mid-term AFR, annual compounding | 3.81% |
| 120% of the mid-term AFR (IRS table) | 4.57 |
| Section 7520 rate (rounded) | 4.6% |
The ruling’s table is headed “Rate Under Section 7520 for January 2026”, and the IRS’s own table repeats the figure: 4.57 for the 120% mid-term AFR and 4.6 for the section 7520 interest rate.
What the section 7520 rate is used for
Table 5 of the ruling labels the rate as the “Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years, or a remainder or reversionary interest”. The statute is the source of that use: “the value of any annuity, any interest for life or a term of years, or any remainder or reversionary interest shall be determined” under the IRS tables and the rate for the month of the valuation date. This page gives the January 2026 rate; the valuation factors themselves come from the IRS tables, not from this page.
How 4.57 becomes 4.6%
The statute sets the rate as “an interest rate (rounded to the nearest 2/10ths of 1 percent) equal to 120 percent of the Federal midterm rate in effect under section 1274(d)(1) for the month in which the valuation date falls”. The IRS table puts the same rule this way: “the interest rate for a particular month is the rate that is 120 percent of the applicable federal midterm rate (compounded annually) for the month in which the valuation date falls”.
For January 2026 the ruling prints a mid-term AFR of 3.81% (annual compounding) and a 120% mid-term figure of 4.57. The two-tenths values on either side of it are 4.4 and 4.6. 4.57 is 0.17 points above 4.4 and 0.03 points below 4.6, so the rounded rate is 4.6%, the figure in Rev. Rul. 2026-2 Table 5 (computed).
The rates up to January 2026
| Valuation month | Mid-term AFR, annual | 120% of the mid-term AFR (IRS) | Section 7520 rate | Revenue ruling |
|---|---|---|---|---|
| November 2025 | 3.83% | 4.60 | 4.6% | Rev. Rul. 2025-21 |
| December 2025 | 3.79% | 4.55 | 4.6% | Rev. Rul. 2025-24 |
| January 2026 | 3.81% | 4.57 | 4.6% | Rev. Rul. 2026-2 |
Do not recompute the rate from the printed mid-term AFR
For January 2026 the printed mid-term AFR is 3.81%, and 3.81 times 1.2 is 4.572, which rounds to 4.6%, the same as the ruling’s rate, so the shortcut happens to agree this month. It does not always: for May 2026 the printed mid-term AFR is 4.08%, 4.08 times 1.2 rounds to 4.8, and the IRS rate is 5.0% (computed from both tables). Take the rate from Table 5 of the ruling or from the IRS table, never from the printed AFR.
Which month’s rate a valuation uses
The rule keys on the valuation date: “for the month in which the valuation date falls”. For a charitable gift the statute adds a choice: “If an income, estate, or gift tax charitable contribution is allowable for any part of the property transferred, the taxpayer may elect to use such Federal midterm rate for either of the 2 months preceding the month in which the valuation date falls”. So a January 2026 valuation date can use these rates:
| Month whose rate can be used | Section 7520 rate | Source |
|---|---|---|
| January 2026 | 4.6% | Rev. Rul. 2026-2, Table 5 |
| December 2025 | 4.6% | Rev. Rul. 2025-24, Table 5 |
| November 2025 | 4.6% | Rev. Rul. 2025-21, Table 5 |
Only the first row applies when no charitable contribution is allowable for any part of the property. Which choice is better for a given gift is a calculation for the gift’s own numbers; this page lists the rates, not the answer.
When the January 2026 ruling appeared
Rev. Rul. 2026-2 is the prescribed-rates revenue ruling for January 2026. The IRS’s file of the ruling shows a last-modified date of December 15, 2025 (the server’s date, read November 5, 2026; the ruling itself prints no date). The rate applies to valuation dates in January 2026. The newest published month is on the November 2026 section 7520 rate.
Common mistakes
- Using the rate for the month the ruling was posted in. The rate belongs to the valuation month named in the ruling, not the month the file went up.
- Recomputing the rate from the printed mid-term AFR. For May 2026 that gives 4.8%, while the IRS rate is 5.0%.
- Reading the mid-term AFR as the section 7520 rate. The rate is 120 percent of the mid-term AFR, rounded to the nearest two-tenths of one percent.
Related: the February 2026 section 7520 rate, the 2026 AFR rates, the section 7520 rate for every month, and the charitable remainder trust retest.
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Answer againSources
- Internal Revenue Service, Rev. Rul. 2026-2 (prescribed rates for January 2026, Table 5 the rate under section 7520): www.irs.gov
- Internal Revenue Service, Section 7520 interest rates (monthly table, with the 120% mid-term figure and the rounded rate): www.irs.gov
- 26 U.S.C. 7520, Valuation tables (U.S. Code, 2024 edition, U.S. Government Publishing Office): www.govinfo.gov
- Internal Revenue Service, Rev. Rul. 2025-21 (prescribed rates for November 2025, Table 5 the rate under section 7520): www.irs.gov
- Internal Revenue Service, Rev. Rul. 2025-24 (prescribed rates for December 2025, Table 5 the rate under section 7520): www.irs.gov
- Internal Revenue Service, Rev. Rul. 2026-9 (prescribed rates for May 2026, Table 5 the rate under section 7520): www.irs.gov
Read from the primary documents linked above on November 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the IRS itself is the right place to confirm anything consequential.