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URL:  http://boards.fool.com/jafo-is-right-theres-something-called-21113735.aspx

Subject:  Re: private loan - details, details... Date:  8/4/2004  3:35 PM
Author:  lorenzo2 Number:  72735 of 121219

JAFO is right - there's something called Applicable Federal Rates. A letter is published each month, showing minimum rates for short-, medium-, and long-term loans. If you charge less than that, then the shortfall is treated as a gift. That's actually quite sensible, and I have no problem with it. Ok, I do have a problem - I don't yet understand the damn tables displayed in the monthly letter, an example of which can be seen here:

http://www.irs.gov/pub/irs-drop/rr-04-84.pdf

Lorenzo
President, 1st Bank of Lorenzo
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