All Forum Posts by: Paul L.

Chris, thanks for the input! I'm not sure how much of a difference it makes that this is a promissory note, not a mortgage, and isn't technically tied to the house.

I guess what I'm really trying to determine is if we can state that the loan includes the imputed interest and remove the tax liability away from the seller.

I have a deal for $135,000 with 0% interest. This is in the form of a promissory note in exchange for the house. The seller is worried about tax liability down the line. Instead of a $135K loan at 0%, could we say something like "seller will take a promissory note for $135K, which includes (imputed interest rate)?" The actual sale price of the house isn't what is important to the parties, the total monies paid is what is important. Would this reduce the seller's tax liability? I realize this effectively reduces the sale price of the house significantly.