5.2%. That is the IRS Section 7520 rate for August 2026, set by Revenue Ruling 2026-13, and it is the single number sitting underneath every GRAT, CRT, and QPRT valuation you sign off on this month.
Practitioners check this rate constantly because it does not sit still and it changes what a trust is worth. A client who funds a GRAT in August gets a different hurdle than one who funds it in March, and the difference compounds over the trust's entire term.
This guide gives you the current rate with its citation, a 12-month history so you can see where the number has been, and a plain explanation of which planning vehicles want it high and which want it low.
The rate is published monthly inside the same Revenue Ruling that sets the Applicable Federal Rates, and the IRS Section 7520 interest rates page carries the current table. For August 2026, that ruling is Revenue Ruling 2026-13, and the rate it sets is 5.2%, the same as July.
Under IRC section 7520(a), the rate is 120% of the annual mid-term applicable federal rate (the section 1274(d) mid-term rate), rounded to the nearest two-tenths of one percent; Treas. Reg. section 1.7520-1 restates this calculation. For August 2026, 120% of the mid-term rate works out to 5.23%, which rounds down to 5.2%. That rounding step matters more than it looks. A computed rate of 4.57% rounds down to 4.6%, while 4.72% rounds up to 4.8%, and that two-tenths swing can move a remainder interest on a large trust by tens of thousands of dollars.
The ruling is typically released in the latter half of the preceding month, which is why you can often plan a transfer around next month's number before it is technically in effect. Under IRC section 7520(a), a taxpayer claiming an income, estate, or gift tax charitable deduction may elect the rate for the month of the transfer or either of the two preceding months, so a client transferring in August could use the June, July, or August rate, whichever produces the better result. Parallel regulations restate this rule by tax type: Treas. Reg. section 1.7520-2 (income), section 20.7520-2 (estate), and section 25.7520-2 (gift).
The table below tracks the published rate for each of the last 12 months, with its governing Revenue Ruling.
The rate held close to a 4.6% floor through most of late 2025 and early 2026, then, after a brief uptick to 4.8% in March that reverted to 4.6% in April, it stepped up to 5.0% in May and 5.2% in July. That climb happened even though the Federal Reserve cut its short-term target range to 3.50% to 3.75% in December 2025 and held it there. The Section 7520 rate follows mid-term Treasury yields, not the Fed's overnight rate, so the two can move in different directions; the mid-term AFR is derived from average market yields on 3-to-9-year U.S. government obligations.
For context, these readings sit in normal historical range. The rate peaked at 11.6% in the spring of 1989, the first month section 7520 took effect, and bottomed out at 0.4%, a low that held for four straight months from August through November 2020. Today's 5.2% is neither extreme nor unusual by the standard the IRS has published since 1989.
The Section 7520 rate feeds the IRS actuarial tables that value annuities, life estates, remainders, and reversions, including Table S for single-life factors and Publication 1458 for unitrust remainder factors. Whether a rising or falling rate helps your client depends entirely on which vehicle they are using.
For a Grantor Retained Annuity Trust, the Section 7520 rate is the hurdle. The grantor keeps a fixed annuity for the trust's term, and only appreciation above that hurdle passes to the remainder beneficiaries free of gift and estate tax. A lower rate is an easier bar to clear, and it also lowers the present value of the retained annuity in a zeroed-out structure, shrinking the initial taxable gift. Charitable Lead Annuity Trusts work the same way in reverse: charity gets the annuity, family gets the remainder, and a low rate raises the present value of the charitable interest, shrinking what family owes gift tax on.
Once a GRAT or CLAT is funded, the rate is locked for the life of the trust. A later increase in the published rate does not touch a trust that already exists, so the rate only matters at the moment of funding.
Charitable Remainder Trusts run the opposite direction. The donor takes an upfront income tax deduction equal to the present value of what charity eventually receives, and a higher rate discounts the future payouts more heavily, which leaves a larger present-value remainder and a bigger deduction today. Charitable Remainder Annuity Trusts feel this more than Charitable Remainder Unitrusts, since the rate touches only the initial deduction on a CRUT rather than the ongoing payout math.
Qualified Personal Residence Trusts follow the same logic. The grantor keeps the right to live in the home for a term of years, and a higher rate increases the value of that retained right, which lowers the taxable gift on the remainder. On a $2 million home with a 15-year term, that difference between a 2% and a 5% environment can move the taxable gift by several hundred thousand dollars.
None of this is a guarantee of outcome. A GRAT funded with a volatile, high-upside asset can clear almost any hurdle rate, and a CRUT's real payout depends on investment performance long after the rate set the initial deduction. The rate governs the valuation at the moment of the transfer, not how the trust performs afterward.
The IRS publishes the rate directly, but its own page is a bare table with no history and no worked calculation, so most practitioners end up somewhere else for the trend and the context. The tools that fill that gap split into a few categories: desktop actuarial software built for GRAT, QPRT, and CRT calculations, enterprise suites bundled into a larger tax platform, planned-giving software built for nonprofit gift officers, and a newer category of AI research tools that answer the question directly and cite the ruling behind it.
That last category is where Bizora sits. Ask the platform for the current Section 7520 rate or how it affects a specific GRAT or CRT calculation, and the answer comes back with the governing Revenue Ruling cited, so you can confirm the number rather than trust it blindly. The View Steps panel shows the reasoning path from question to conclusion, including which sources were used and why, which is useful when a partner asks where a number came from. It is a research layer, not a stand-in for the actuarial software that runs the actual trust calculations, and for a broader look at how research tools compare, this comparison of tax research software covers the options beyond this specific rate question.
The Section 7520 rate changes every month, and the gap between checking a stale number and the current one is not academic. It is the difference between a GRAT that clears its hurdle and one that does not, or a QPRT gift that is defensible and one that is not.
Build the habit of confirming the rate and its citation before you run a calculation, not after a client asks why the numbers do not match what they read somewhere else. If that verification step is the part of your workflow that takes the most time, Bizora traces the current rate to the governing Revenue Ruling and shows the reasoning path with View Steps at Bizora AI.
The Section 7520 rate for August 2026 is 5.2%, set by Revenue Ruling 2026-13. It is unchanged from July 2026 and up from a 4.6% floor that held through most of late 2025 and early 2026.
Under IRC section 7520(a), the rate is 120% of the annual mid-term applicable federal rate (the section 1274(d) mid-term rate), rounded to the nearest two-tenths of one percent. The ruling that sets each month's rate is typically released in the latter half of the preceding month.
A low rate favors a GRAT. It sets an easier hurdle for the trust's assets to beat, and it lowers the present value of the retained annuity, which shrinks the taxable gift in a zeroed-out structure. Charitable Lead Annuity Trusts follow the same low-rate preference.
A high rate favors both. On a Charitable Remainder Trust, a higher rate produces a larger upfront charitable deduction. On a Qualified Personal Residence Trust, a higher rate increases the value of the retained right to live in the home, which lowers the taxable gift on the remainder interest.
Yes, if you are claiming an income, estate, or gift tax charitable deduction. Under IRC section 7520(a), you may elect the rate for the month of the transfer or either of the two preceding months, whichever produces the better result for your client. The parallel regulations are Treas. Reg. section 1.7520-2 (income), section 20.7520-2 (estate), and section 25.7520-2 (gift).
Desktop actuarial tools built for trust calculations, enterprise tax suites, planned-giving software, and AI research tools each cover a different piece of the job. Bizora fits the research category: it traces the current rate to the governing Revenue Ruling and shows the reasoning path with View Steps, so you can verify the number rather than take it on faith.
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