Seller Finance Structure

[John McDonald]

Hi all, I’m in the middle of a seller-financed acquisition of an asset-heavy hospitality business, and I’d appreciate feedback on the deal terms, promissory note structure, and tax implications.

This is a family-to-family transaction designed to benefit both sides. The structure is as follows:

• I receive the property as a gift, based on its appraised value
• We sign a promissory note for that value, with the intent to pay it off at refinance
• I assume operational control immediately and take the lead role in managing the asset

I’m modeling this as a hybrid between a gift transfer and a seller carry, and I want to ensure:

• The promissory note is compliant with IRS rules to avoid imputed interest
• We’re not triggering unintended capital gains exposure on either side
• The deal protects both parties in case of default or delayed refinance

If anyone has experience with family-based seller financing, promissory note structuring, or tax overlays in hospitality or real estate, I’d love your input. Happy to share anonymized deal terms or dashboards if helpful.

Thanks in advance!