Interest must be imputed whenever the stated rate is not the same as the prime rate of interest at the time of the transaction.

Name: Interest must be imputed whenever the stated rate is not the same as the prime rate of interest at the time of the transaction.
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Question

Quizplus · Accepted Answer

Interest must be imputed based on the applicable federal rate (AFR) or market rate, not necessarily the prime rate, when the stated rate is significantly lower than the market rate for tax purposes.

Interest Must Be Imputed Whenever the Stated Rate Is Not