(a) General rule. The following amounts are treated in the same manner as borrowed amounts for which the taxpayer has no personal liability and for which no security is pledged--
(1) Amounts that do not increase the taxpayer's amount at risk because they are borrowed from a person who has an interest in the activity other than that of a creditor or from a person who is related to a person (other than the taxpayer) who has an interest in the activity other than that of a creditor; and
(2) Amounts (whether or not borrowed) that are protected against loss.
(b) Interest other than that of a creditor; cross reference. See Sec. 1.465-8 for additional rules relating to amounts borrowed from a person who has an interest in the activity other than that of a creditor or is related to a person (other than the taxpayer) who has an interest in the activity other than that of a creditor.
(c) Amounts protected against loss; cross reference. See Sec. 1.465-6 for rules relating to amounts protected against loss.
(d) Effective date. This section applies to amounts borrowed after May 3, 2004. [T.D. 9124, 69 FR 24079, May 3, 2004]