Posted by Michael Morrongiello on September 16, 2006 at 01:31:59:
Alisa:
Have the current owner SELL the property and also financed the buyer by agreeing to take back a “wrap around” type instrument. Now the buyer will make payments the wrap around note holder who in turn will continue to make their payments to the original seller under the terms of their seller financed debt.
Best to your success,
Michael Morrongiello
Seller Financing - Substitution of Collateral - Posted by Alisa
Posted by Alisa on September 12, 2006 at 17:10:59:
A seller has sold property with seller financing. Now the buyer would like to sell the property, but the seller does not want to get paid off and is not really interested in having the mortgage assumed (he doesn’t want to collect payments from anyone but the original buyer - they have a good, long relationship).
Can a seller do a “1031 for mortgages” and have the buyer who is paying him now offer new collateral at the settlement of the property so the seller doesn’t get paid off and have to pay capital gains taxes?
My thought is that if the seller doesn’t actually receive any money (the escrow agent holds it from the sale and distributes it back to the original buyer in the form of a refinance on the substituted property) that it would still qualify the seller to continue to defer his gains until he is paid off.
The seller is open to this, but his accountant can’t find any ruling on it and he doesn’t want to take any chances.
Any help would be greatly appreciated!!!
Alisa