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Jesse Handel
Jesse Handel, Tax Preparer
Category: Tax
Satisfied Customers: 309
Experience:  10 years tax preparation. IRS Registered Tax Preparer.
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i am selling a 50% share in some land and i am to be paid ...

Customer Question

i am selling a 50% share in some land and i am to be paid in stage payments over 7 years i have been advised that i have to pay tax on the full amount in the first year would you agree with this.
Submitted: 8 years ago.
Category: Tax
Expert:  Jesse Handel replied 8 years ago.
HelloCustomer Thank you for coming to Just Answer for help with your questions. Unless there is something very unusual about your land or the land sale, as long as you have the sale set up as an installment sale with interest and principal paid annually over seven years, you should only have to pay taxes on the amount of money you actually receive each year. Your title company should be able to set up the installment sale correctly and you just have to make sure that you report it as an installment sale. There is a minimum amount of interest the IRS requires (about 4 or 5% last time I looked) and you should check that with your title company. If you need more information or clarification on this information, please let me know.