### Question
What does Federal long-term rate mean?


### Answer
**Federal long-term rate** has the following meaning in *26 U.S.C. § 860E*:

> the Federal long-term rate which would have applied to the residual interest under section 1274(d) (determined without regard to paragraph (2) thereof) if it were a debt instrument

#### Citation:
  - *26 U.S.C. § 860E*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter M-Regulated Investment Companies and Real Estate Investment Trusts > PART IV-REAL ESTATE MORTGAGE INVESTMENT CONDUITS**

