All Time Low Interest Rates!

The IRS just issued Revenue Ruling 2012-2 which lists the Applicable Federal Rates for January, 2012.  These are the minimum interest rates that you must charge on related party loans such as a loan from a parent to a child or a shareholder to their corporation.

For short-term loans, this interest rate is only .19%.  For mid-term loans it is only 1.17% and for long-term loans, it is about 2.60%.  These rates are at an all time low and if you are thinking about making some inter-family loans, this is a great time to make the loan.

It allows you to transfer the use of income producing property from you to your child and they are only required to pay you interest are these very low rates.

Also, if you have loans from your corporation or vice versus, this is a great time to lock in these low rates.

One last thing, due to Emancipation Day, the due date for your tax return this year is April 17, 2012.