### Question
How does NORMAL TAXES AND SURTAXES define prohibited transaction?


### Answer
Under *26 U.S.C. § 503*, **prohibited transaction** is defined as:

> any transaction in which an organization subject to the provisions of this section—



(1) lends any part of its income or corpus, without the receipt of adequate security and a reasonable rate of interest, to

#### Citation:
  - *26 U.S.C. § 503*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter F-Exempt Organizations > PART I-GENERAL RULE**

