When real estate taxes due on a contract for deed sale?
I am selling a house that I inherited from my parents contract-for-deed. After 4 years of monthly payments, the buyers are obtaining a bank loan & paying the remaining balance in full. What, if any, will be my income tax responsibilities?
Public Comments
- If the payments they made to you consisted of principal and interest you should have paid income tax on the interest income in the year that it was received. You also should have given the buyer a statement telling them how much interest they paid for that year so that they could deduct the mortgage interest from their taxes. When they pay the balance in full, you may have to pay capital gains tax, depending on the sales price and the value stated when you inherited the house assuming that you paid inheritance tax at that time. http://www.mypropertyflip.com http://www.AmericanSeizedRealEstate.com
