Posted by phil fernandez on March 21, 2000 at 20:45:43:
Yes the IRS will imput their perception of a market interest rate if the rate on an owner financed mortgage is out of whack. Your example of 3% in an 8% world would get the IRS attention.
I still, as a buyer get sellers to finance me as a buyer for a rate of 8% down to 0% interest. The IRS imputed interest rate affects the seller. It would not affect me as a buyer.