§ 483. Interest on certain deferred payments
(b)
Total unstated interest
For purposes of this section, the term “total unstated interest” means, with respect to a contract for the sale or exchange of property, an amount equal to the excess of—
(c)
Payments to which subsection (a) applies
(1)
In general
Except as provided in subsection (d), this section shall apply to any payment on account of the sale or exchange of property which constitutes part or all of the sales price and which is due more than 6 months after the date of such sale or exchange under a contract—
(2)
Treatment of other debt instruments
For purposes of this section, a debt instrument of the purchaser which is given in consideration for the sale or exchange of property shall not be treated as a payment, and any payment due under such debt instrument shall be treated as due under the contract for the sale or exchange.
(d)
Exceptions and limitations
(2)
Sales prices of $3,000 or less
This section shall not apply to any payment on account of the sale or exchange of property if it can be determined at the time of such sale or exchange that the sales price cannot exceed $3,000.
(e)
Maximum rate of interest on certain transfers of land between related parties
(1)
In general
In the case of any qualified sale, the discount rate used in determining the total unstated interest rate under subsection (b) shall not exceed 6 percent, compounded semiannually.
(3)
$500,000 limitation
Paragraph (1) shall not apply to any qualified sale between individuals made during any calendar year to the extent that the sales price for such sale (when added to the aggregate sales price for prior qualified sales between such individuals during the calendar year) exceeds $500,000.
(f)
Regulations
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section including regulations providing for the application of this section in the case of—
(g)
Cross references
(2)
For special rules for certain transactions where stated principal amount does not exceed $2,800,000, see section
1274A.