Every month the IRS posts a listing of the required interest rates that parties must put into loan contracts to prevent imputing of interest. For several months, these rates have been dropping lower and lower. For the month of August, short-term notes (less than 3 years) now require an interest rate of .25%. Mid-term loans (3 to 9 years) require a rate of .88% and long-term notes (over 10 years) a rate of 2.23%.
I believe these are the lowest rates ever and provide farmers the ability to loan money to children and their corporations at very low rates. The benefit is to transfer the use of funds from them to their children at a very low cost to the child. With the lifetime gift exclusion being $5.12 million this year only (reverting back to $1 million on January 1), now is the time to consider using these low interest rates in your succession planning.