IMPUTED INTEREST

I have client who sold 5 acres vacant property on an installment basis. Sale price $500,000 with $100,000 down and $1,250 per month for 5 years with a balloon payment of $325,000.. Loan is zero interest, therefore, I will need to compute imputed interest. Does anyone know of an online calculator that could do this for me. I am kind of clueless on how to go about this especially after reading some IRS info. Thanks.

Have you tried Tvalue software?

https://www.timevalue.com/blog/imputed-interest-rate

You also need to get the AFR tables for the month of the transaction to get your interest rate.

Also check if the amount of interest he forgives in a year (the total imputed amount for the year) would make him subject to gift-tax-return filing.

Who said anything about forgiving the unstated interest?