On Sun, 9 Mar 2008 22:02:34 EDT, "Ira Smilovitz" <iras1[at]aol.com> wrote
Re Re: When report sale??:

- quote -

Thanks to all for the comments, particularly Ira and Seth. It looks
like an installment sale is the way to go.

One further question:

I assume the closing attorney would send a 1099 to the installment
sales contract seller and the seller reports the installment sale on
Form 6252. Is reporting the sale on the Form 6252 sufficient to
account for the 1099 received, or does it need to also be reported
someplace else?

Thanks for any comments.

Vic
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In article <0d38t39e16ucju2firbkqj96ik55uuuh4l[at]4ax.com> ,
Vic Dura <vpdura[at]hiwaay.net> wrote:

- quote -

By treating it as an installment sale, the income is taxed when
received.

However, I'm not sure about the interest; that might be taxable to A
when accrued.

Seth

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"Vic Dura" <vpdura[at]hiwaay.net> wrote in message
news:0d38t39e16ucju2firbkqj96ik55uuuh4l[at]4ax.com...
- quote -

Although the sale is reported when the transfer occurs, the seller has the
option of reporting the sale as an installment sale. Taxes would only be due
as funds are transferred from buyer to seller.

Ira Smilovitz

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Vic Dura wrote:
- quote -

house to B.

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Background:

Taxpayer A owns half of a house (tenants in common) with Brother B.
Brother B has lived in the house as his primary residence for many
years; TP A has not live in the house for many years. B would like to
purchase A's interest in the house for a promissory note at market
interest, such note principal and all accrued interest due when and if
B sells house. That may be in the near or distant future. The note
would be recorded as a lien against the house.

Question:

Would taxpayer A report the sale of the house 1) when the note is
recorded and the transfer to B occurs; or 2) when the principal and
interest of the note are paid after B sells the house?

The TP is hoping (1) is the answer so that he will have the money to
pay the taxes from the proceeds of the sale.

Thanks for any comments.
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