A family member has offered me a low interest loan for purchasing a home. Where can I find information on rates for private loans?
The rules for private or “below market” loans may be found in Publication 550, Investment Income and Expenses. To calculate the lowest acceptable rate of interest under federal tax law, you must use the Applicable Federal Rates (AFR) that apply based on the terms and period of your loan. The applicable federal rates are published monthly in the Internal Revenue Bulletin. The Internal Revenue Bulletins may be found on the IRS’ web-site, the Digital Daily. In the ” search IRS site for:” box, enter “applicable federal rates index” click on “go” and a page with a link to AFRS will pop-up. You may access the web-site at www.irs.gov.
