<prompt> Human: Hello. My friend is loaning me 400k for a LiveWork live upstairs and work downstairs. What is the best way to do this? He has told me he does not want to make any money off of me just wants me to pay him back over time. I have no issue with this and he is doing this as a favor. Would i just set this up like a mortgage with him? How do i avoid paying interest if he wants no interest on it? If we have to do interest for tax reasons what is the minimum it can be? Is it better to pay quarterly?  <response>: You can do 0, but then it becomes imputed interestIt can get pretty complicated. That being said, the interest rates in the Applicable Federal Rates are pretty low, you can use those to make things simpler, and the rates are low enough that it shouldnt have a big impact. 