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    LORAPNUT's Avatar
    LORAPNUT Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Dec 30, 2006, 07:45 PM
    Tax Benefits when selling on Contract
    Can you give be a brief overview on what I need to claim as income and can write off as deductions when selling on contract?
    Do you have a CPA file your taxes? Also, do you set up a separate business or just file under your own social security number?
    Thanks again,
    Lora
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #2

    Dec 30, 2006, 07:51 PM
    Since there can be significant liability here, I would set up a corporation or LLC to hold the contract. That would then mean hiring an accountant to deal with tax issues.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
    Expert
    		  
    #3

    Dec 30, 2006, 08:58 PM
    VI am a firm beleiver in a separate LLC if you only have a couple, if you have a lot a coporation is a good idea.

    If you are new to doing this yes hire a good tax preparer, there are a lot of really great money losses available, esp if they don't stay in the house and you have to take it back.
    Cvillecpm's Avatar
    Cvillecpm Posts: 553, Reputation: 28
    Senior Member
    		  
    #4

    Dec 31, 2006, 07:47 AM
    By selling RE on a contract, you only pay taxes on the income in the year you receive it. You hold LEGAL title and the purchaser hold EQUITABLE title.

    You should find a bank/attorney or escrow/title company to administer payments - accept payments from the purchaser and make any payments on any underlying obligations like mortgage, taxes, insurance.
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