What taxes are due? - Posted by Steve

Posted by Bronchick on October 23, 2001 at 17:41:10:

Your tax basis in the property is $8500. Your sale price is $35,000, so your gain is $26,500. You can claim installment tax treatment, deferring gains on the principal receive, but keep in mind that the interest portion is taxable as you receive it.

If you refi the property before you sell it, you can get cash out. On a contract for deed, there is no “debt relief” for the $10k.

What taxes are due? - Posted by Steve

Posted by Steve on October 22, 2001 at 21:22:06:

I have a house I got at a tax resell auction in Oct. 1998 for $4500 cash. I put $4000 more in repairs.

If I owner finance it for $35,000 with $2000 down
12% for 30 years what will my income taxes me this year and each following year???
I would hate to get $2000 down and pay $10,000 in taxes.

Also, I might as well borrow $10,000 from a lender to get my cash back before I do the contract for deed to my buyer.

I can buy houses all day long for $14,000 and spend $3000 in repairs and refinance them for $17,000 and sell them on contract for deed for $35000 to $40,000. But I can’t find any tax info on this anywhere.