Updated almost 15 years ago on . Most recent reply
Imputed Tax Dodge? Longer Amortization Period
Bryan HancockPoster
#4 Off Topic Contributor
#4 Off Topic Contributor
- Investor
- Round Rock, TX
If one were to make the amortization period for a seller carried loan something like 99 years with a 30-year balloon instead of making the interest payment below "market" would this be subject to imputed tax by the IRS? Would there be any legal or other issues with using this tactic to avoid imputed tax?
BTW...the title of this thread should read "imputed"...I can't fix the title for some reason though. If a mod can fix it please do so.
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Jon Holdman#3 Real Estate Deal Analysis & Advice Contributor
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Jon Holdman#3 Real Estate Deal Analysis & Advice Contributor
#3 Real Estate Deal Analysis & Advice Contributor
- Rental Property Investor
- Mercer Island, WA
A 99 year amortization period is effectively an interest only loan. I don't see how an interest only loan would avoid the imputed income issue for below market interest rates.