DRAFT — pending professional review

NOT LEGAL OR TAX ADVICE. This module is reference material for the HigherSelf Network cohort. Pending Lumina tone review, outside-CPA review, ERISA-counsel review for any Solo 401(k) or ROBS section, and Grace Fields authorization before external publication. Cohort-facing facts use anonymized framing until written consent is on file.

intercompany strategy

Below-market loans — § 7872

IRC § 7872

Eligibility

Best when: One HSN entity needs to lend cash to another at AFR with proper documentation.
Do not use when: Loan is a sham or has no realistic repayment expectation.
Operative rule: Loans between related parties below the Applicable Federal Rate (AFR) are recharacterized: foregone interest treated as compensation, gift, or distribution.

Documentation

Promissory note
Stated interest at AFR (Rev. Rul. monthly)
Repayment schedule
Actual payments on schedule
Default remedies

Applies to

HigherSelf Network A.M. Consulting The 7 Space HigherSelf Nonprofit

Interacts with

Intercompany services at arm's length

Research only — not legal or tax advice