No. of Recommendations: 0
The actual language of the rule states the interest should "not exceed a reasonable rate". However, Private Letter Rulings indicate that the IRS thinks the interest rate should be within a reasonable interest rate. The Rulings further indicate that the IRS takes a rather conservative view of reasonable, within 80%-120% of the Mid-Term Treasury rate at the time of first withdrawal (5-7%).

Both the Wise & the Fools would argue this rate is ridiculously low. However, you have to make your own decision taking your chances at an audit.
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