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Reg O: If a loan is made to a spouse, under their own signature and taxpayer ID, is it an insider loan?

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For Reg O purposes, do insider loans include loans made to relatives (especially spouses) under their own signature and taxpayer ID?

Not necessarily, but they can be if it appears the purpose was to "mask" the intended beneficiary. Section 215.3 Extension of credit.

(f) Tangible economic benefit rule(1) In general. An extension of credit is considered made to an insider to the extent that the proceeds are transferred to the insider or are used for the tangible economic benefit of the insider.
(2) Exception. An extension of credit is not considered made to an insider under paragraph (f)(1) of this section if:
(i) The credit is extended on terms that would satisfy the standard set forth in Section 215.4(a) of this part for extensions of credit to insiders; and
(ii) The proceeds of the extension of credit are used in a bona fide transaction to acquire property, goods, or services from the insider.

First published on 3/17/03

First published on 03/17/2003

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Filed under compliance as: 

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