using old threads is a bad idea. It can make things confusing and lead to a wrong answer. but if I understand correctly, your situation is different than the older threads. you inherited the land that had not yet been sold. Thus, its tax basis for sale starts out with its fair market value (FMV) on the date the owner died. Your gain would be sales price less FMV less selling costs such as title charges. if there is a gain you can use the installment sale method to spread the gain out over the period you collect the proceeds or you can waive the installment sale provisions and recognize the entire gain in year of sale. regardless of which you do the interest would be taxable in the year received. assuming this is a term loan IRS code sec 7872 specifies the minimum interest rate that must be charged or imputed.
IRC 7872
(2)Applicable Federal rate
(A)Term loans
In the case of any term loan, the applicable Federal rate shall be the applicable Federal rate in effect under section 1274(d) (as of the day on which the loan was made), compounded semiannually.
