Podcast 527 inputed interest

[Jeff S.]

https://www.biggerpockets.com/... 

The latest podcast touting getting seller to carry notes at 0 interest rates. The IR doesn't like that because interest is taxable as income where the higher price and no interest pays capital gains. At this point it is really low so no big deal but should be mentioned.

[Jay Hinrichs]

Originally posted by @Jeff S.:

@Jay Hinrichs barely registers the needle at this point. If done then worth renegotiating at some point for a big discount. With rates so low maybe can sell at a reasonable discount

with zero interest the term of the note is very short term 3 to 5 years so to find PV of the note the discount to the seller to achieve a 12% return for the investors is not as bad as one might think.  but we hold ours.