Can you also advise how to proceed with unstated interest? Do I understand correctly that as the interest in my case is unstated, I have to use AFR as the calculated rate and allocate part of the second and third installment as unstated interest? This reduces the sale price for tax purposes by the amount of interest. I use the published AFR for the month when the payment happened. It remains constant throughout the following years. I report the unstated interest on Schedule B.
