I am thinking of selling my house on land contract. I was wondering what the difference in tax paid on profit would be if any compared to an outright sale. Thanks for your advice
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I am thinking of selling my house on land contract. I was wondering what the difference in tax paid on profit would be if any compared to an outright sale. Thanks for your advice
In general there isn't much difference in what you report as a gain. In an installment sale such as this you report the sale as if the buyer has paid up front in full, even though they will be paying you over a number of years. It can get a little complicated if in a year or two the buyer defaults and you repossess, as you will then need to report a loss. The other major difference is you will need to report the interest that you receive from the buyer as income on Schedule B. You can get more details from here:
Publication 537 (2010), Installment Sales
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