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#1
07-31-2004, 06:49 AM
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 Re: Rental sold on contract for deed - cap gain treatment PaulM <pmacad[at]mindspring.com> wrote: - quote - > Hoping the gurus in the group might point me in the right
Get thee to a tax professional, this is not for the do it> direction in terms of understanding the implications of the > below. > I am selling a rental property. The sale will produce a > capital gain. At the same time, I am selling the property to > the buyer on a contract for deed. In short, the sale is > seller-financed. > I live in California; the property is in Minnesota. > I will get a small amount of cash as a down payment. The > bulk of the proceeds from the sale, however, will come to me > as a balloon payment in 5 years. > How do I account for all of this: > o capital gain must be realized in the year the sale occurs, > or when the deed is eventually transferred? > o will the interest be treated as ordinary interest each > year on Form 1040? > o is there a way to treat all of this, still, as an > investment property? > o is there anything that I can do, before the closing, > to reduce the tax consequences of the sale? yourselfer. Missy Doyle << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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07-31-2004, 06:30 AM
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| Re: Rental sold on contract for deed - cap gain treatment PaulM <pmacad[at]mindspring.com> wrote: - quote - > Hoping the gurus in the group might point me in the right
You have an installment sale for tax purposes. The> direction in terms of understanding the implications of the > below. > I am selling a rental property. The sale will produce a > capital gain. At the same time, I am selling the property to > the buyer on a contract for deed. In short, the sale is > seller-financed. > I live in California; the property is in Minnesota. > I will get a small amount of cash as a down payment. The > bulk of the proceeds from the sale, however, will come to me > as a balloon payment in 5 years. > How do I account for all of this: > o capital gain must be realized in the year the sale occurs, > or when the deed is eventually transferred? computation is to lengthy to go into on this forum. I suggest you seek advice from a tax professional. - quote - > o will the interest be treated as ordinary interest each
Yes.> year on Form 1040? - quote - > o is there a way to treat all of this, still, as an
If your question pertains to offsetting investment interest> investment property? expense with the interest received from the buyer of your rental property the answer would be yes. - quote - > o is there anything that I can do, before the closing,
If you have not closed yet the only way to change the tax> to reduce the tax consequences of the sale? liabilty from the sale would be to use a "like kind exchange." Again to complicated to discuss in this reply. R.A. Moore, EA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
07-29-2004, 11:20 AM
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| Rental sold on contract for deed - cap gain treatment Hoping the gurus in the group might point me in the right direction in terms of understanding the implications of the below. I am selling a rental property. The sale will produce a capital gain. At the same time, I am selling the property to the buyer on a contract for deed. In short, the sale is seller-financed. I live in California; the property is in Minnesota. I will get a small amount of cash as a down payment. The bulk of the proceeds from the sale, however, will come to me as a balloon payment in 5 years. How do I account for all of this: o capital gain must be realized in the year the sale occurs, or when the deed is eventually transferred? o will the interest be treated as ordinary interest each year on Form 1040? o is there a way to treat all of this, still, as an investment property? o is there anything that I can do, before the closing, to reduce the tax consequences of the sale? Thanks in advance. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| cap, contract, deed, gain, rental, sold, treatment |
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