### Question
What does below-market loan mean?


### Answer
**Below-market loan** has the following meaning in *26 U.S.C. § 7872*:

> any loan if—



(A) in the case of a demand loan, interest is payable on the loan at a rate less than the applicable Federal rate, or



(B) in the case of a term loan, the amount loaned exceeds the present value of all payments due under the loan

#### Citation:
  - *26 U.S.C. § 7872*
  - Heading: **Subtitle F-Procedure and Administration > CHAPTER 80-GENERAL RULES > Subchapter C-Provisions Affecting More Than One Subtitle**

