Private Loan from Parents Question

[Rene Gonzalez]

I'm considering buying a property in the Mexico (Riviera Maya area) for approximately $100K. I'm looking at this property as a place I can use as a vacation property, short term rental, and a retirement location far into the future. The purchase as to be done all cash as financing in Mexico is not an option.

My parents have offered a loan of $50K for the purchase of the property in exchange for getting to use the property for X number of days during the year (specifics need to be worked out).

Questions,

My parents have offered for the loan to be interest free (they have the money in a saving account at this moment).  I have been researching on line, and have come across information that indicates that the IRS has  a minimum interest rate for family loans that needs to be charged.

Can I take a interest free loan from them? As anyone done this?

On the other hand. If I pay them interest on the loan ,do I get to deduct that interest when taxes are filed? I would like to pay them interest on the loan to make it a better deal for them, they are making nothing with that money in a savings account.