Taxpayers are not required to "impute interest" on a deferred payment contract for which no interest,or a low rate of interest,is stated.

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Taxpayers are often required to "impute interest" on deferred payment contracts that have no interest or a low rate of interest, according to the IRS rules. This is to ensure that the lender reports some amount of interest income for the use of their money, and the borrower may have a corresponding interest expense deduction.

Taxpayers Are Not Required to "Impute Interest" on a Deferred