The §7520 Rate — July 2026.

For July 2026, Revenue Ruling 2026-12 sets the §7520 rate — the rate used to value annuities, life and term interests, and remainder and reversionary interests — at 5.20%.

The applicable federal rates (AFRs), on an annual compounding basis, are 4.00% short-term (loans up to three years), 4.35% mid-term (over three years and up to nine), and 4.98% long-term (over nine years). The §382 adjusted federal long-term rate for the month is 3.77%, and the §7872 blended annual rate for 2026 is 3.82%.

These are not abstractions. The §7520 rate is the discount rate the law assumes when it values a stream of payments or a future interest, and it quietly decides which planning techniques are in season. A higher §7520 rate — and 5.20% is, by the standards of the last decade, a useful one — favors the strategies that improve as the assumed return rises: qualified personal residence trusts (QPRTs), charitable remainder trusts, and, in the right posture, charitable lead annuity trusts. A lower rate favors the opposite camp — grantor retained annuity trusts (GRATs), intra-family loans, and installment sales to grantor trusts, each of which works best when the hurdle the assets must clear is low.

The AFRs do quieter work, but work no less real: they set the minimum interest a family member may charge on a loan to another without the difference being treated as a gift. A nine-year note priced at July’s mid-term AFR of 4.35% is a loan; the same note at no interest is a transfer the IRS can recharacterize. For a client weighing an intra-family loan, a GRAT, or a sale to a defective grantor trust this month, these are the numbers that decide whether the structure does what it is meant to do. As always, the right technique turns on the client’s facts; the rate only tells you which way the wind is blowing.