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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16559
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I got a mortgage loan through a private lender to purchase

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I got a mortgage loan through a private lender to purchase a property. We are sharing the net gain from the property when it is sold. What form do I need to file with the IRS so that I can show the money has been lent and paid back with interest so I dont have to pay taxes on gross sale price?

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

How are you today?

MyVirtualCPA :

You never pay tax on the gross sales price, it's always the net amount above what you paid for it.

MyVirtualCPA :

You will use form 8949 in connection with schedule D to show all this information.

MyVirtualCPA :

If it's short term, it's taxed at your ordinary rate. If it's long term it gets the preferential rates of 0, 15, or 20%

MyVirtualCPA :

When you use software to prepare your return, it should fill these forms out for you

Customer:

Do I need to file a 1099 for my lenders?

MyVirtualCPA :

No, you do not

Customer:

will they need to file anything besides the net gain on their taxes?

MyVirtualCPA :

The lender?

Customer:

yes

MyVirtualCPA :

They will show the interest you paid them as income as well

Customer:

so if I understand nothing needs to be reported to the IRS until tax time?

MyVirtualCPA :

That is correct

MyVirtualCPA :

Is there anything else that you need assistance with today?

Customer:

yes on last question

MyVirtualCPA :

okay

Customer:

does it matter that it is through my business account and not my personal one

Customer:

or are the rules the same?

MyVirtualCPA :

The rules are the same

Customer:

great, thanks! have a wonderful day A+

MyVirtualCPA :

You too. Please rate my response as "excellent" using the rating feature along the bottom of your screen.

MyVirtualCPA :

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