Seller financing imputed interest depreciation recapture

[Jay Kuhn]

I’m working several 0% down 0% interest seller financing deals. 

2 big issues keep coming up

#1 Imputed interest. My CPA said the IRS has a code where in seller financing you’re required to pay an IRS calculated interest rate to the seller. This is causing me to have to drop my purchase price and factor in the interest to keep the price the same. 

#2 Depreciation Recapture. I was told the seller will need to pay a calculated amount for all the depreciation they’ve written off at the time of closing on the seller financed deal. 

Are there any ways around these two things? You always see people talking about how they get seller financing deals 0% interest but per the IRS that simply isn’t valid.