Shareholder loans

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  • Tami
    Junior Member
    • Jan 2015
    • 6
    #1

    Shareholder loans

    What applicable federal rate must a stockholder charge his 100% owned corporation for a stockholder loan?
    Tags: None
    • Roland Slugg
      Senior Member
      • Aug 2006
      • 1860
      #2
      Depends on the term. For a demand loan it's the 110% of AFR rate. For longer terms it's the 120% or 130% rate. The IRS issues monthly tables of the rates.

      There are exceptions to the use of the AFR, most commonly a de minimis $10,000 exception, among others. See Code ยง7872(c)(2) et al.
      Roland Slugg
      "I do what I can."

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        • Tami
          Junior Member
          • Jan 2015
          • 6
          #3
          Thank you for your assistance.

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