A relatively rare, favorable development in the real estate tax arena appears to be taking shape here on Capitol Hill.

Don't bet the ranch on it yet, but Congress has begun moving to resolve a tax issue that has bedeviled it -- and thousands of American real estate buyers and sellers around the country -- for nearly 10 months: the "imputed-rate" problem. Discussions with congressional staff members and Capitol Hill lobbyists suggest there is now a good chance that the House and Senate will adopt compromise legislation ending the controversy before June 30.

House Ways and Means Committee hearings on imputed rates for real estate are scheduled to begin on Wednesday. Committee Chairman Dan Rostenkowski (D-Ill.) has told colleagues he is serious about getting the issue out of the way, so as not to entangle it in the slower-moving congressional debates over federal tax simplification this summer and fall.

"If Danny Rostenkowski stays on the positive track he's on, I think we're going to put the imputed-interest-rate monster to sleep" this spring, said one Capitol Hill staff expert.

The imputed-rate controversy arises from the widespread practice of seller-financing in real estate transactions.

When a seller of property offers to provide first or second mortgage financing at a below-market rate, that normally acts as an inducement to would-be purchasers to sign on the dotted line. A 10 or 11 percent, seller-assisted note, for example, is far better than most purchasers could obtain from a bank in today's market.

The Treasury Department, however, has taken a dim view of such cut-rate financing. Last year it persuaded Congress to accept its view that below-market, seller-financed rates should be subject to tougher tax standards.

The standards would use Treasury's cost of funds for borrowing in the capital market as the economic yardstick for measuring real estate financings.

To the extent that a seller was offering financing below Treasury's costs, the Treasury henceforth would assume that the property price the seller was receiving was increased artificially to compensate for the interest subsidy. Treasury would "impute," or attribute, a higher rate to the transaction than the stated rate.

The final details of the imputed-rate compromise legislation taking shape on Capitol Hill are still far from certain, congressional tax experts hasten to add, but they are likely to involve some of the following elements:

* Ordinary, small-scale home sellers and buyers using seller-financing need only look to the existing 9 and 10 percent standards. That is, if you're selling a house and provide your purchaser a mortgage carrying a rate of at least 9 percent, you won't have tax troubles from the Internal Revenue Service. If your rate is below 9 percent, however, Uncle Sam will impute a rate of 10 percent.

* Small-scale investors -- sellers and buyers of residential and commercial real estate -- are likely to be left in peace as well. The unanswered question, though, is: What constitutes a small-scale transaction? Is it any sale of property involving $2 million worth of financing or less, as in the legislation effective through June 30? Or is it any property of $4 million or below, as proposed in separate bills by Sen. David Durenberger (R-Minn.), a member of the Senate Finance Committee, and Rep. Robert Matsui (D-Calif.), of the House Ways and Means Committee?

Because the Treasury is concerned about narrowing possible revenue losses, and Ways and Means' Rostenkowski has expressed the same sentiment publicly, don't be surprised if Congress adopts the $2 million threshold, or goes even lower.

* Farmers may get their own separate, more generous imputed-rate rules. Given the economic plight of agriculture in many parts of the country, Congress may allow sellers of working farms with price tags of $4 million or less to use the 9 and 10 percent homeowner test rates.

* Sellers of property involving financing above the ultimate small-scale limit for nonfarm real estate are certain to be subject to tougher standards. Durenberger's bill, for example, would require that seller-financed rates below 90 percent of the applicable Treasury borrowing rates be imputed at 100 percent of the Treasury rates. Other proposals call for large-scale seller-financings to carry mandatory rates of 110 percent of Treasury's and to be subject to even higher imputed rates if they fail to meet that standard.

The current Treasury cost for "long-term" capital is 11.87 percent. Property transactions involving seller financing over $2 million are subject to imputed-rate treatment of 110 percent of federal borrowing costs, or 13.06 percent.