Seller-financed IRS reporting
This is a question for my accountant, but since he's on vacation this week I wanted to see if anyone has had a similar experience. Here's my dilemma: I have struck a deal for a seller-financed acquisition of a mobile home park. The owner wants a guarantee that my payments to him (and his interest income) will not be reported to the IRS. In fact, he wants the monthly payment in cash. Does anyone know the borrower-buyer's IRS reporting requirements in this type of deal? The seller is retired and is not in the lending business. As currently structured, the annual interest would exceed $600. Under another deal structure he is agreeable to a 0% interest rate, but I'm not sure if that would be viewed as reasonable under an audit. My goal is to meet his wishes, do the deal, and stay in full compliance with IRS regs.
Thank you.
Dan