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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13152
Experience:  15years with H & R Block. Divisional leader, Instructor
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Premise: I work a full time job and I buy and sell raw land

Customer Question

Premise: I work a full time job and I buy and sell raw land on the side.
1. If you sell a piece of raw land and owner financed it, do you have to start paying taxes on the income from the sale in the first year, or can you wait until you have recovered what your have paid for the land and then start paying taxes on the profit?
2. If you have two vehicles and one is totally dedicated to your home private real estate business, can the car payments and insurance be deducted as an expense against the real estate sale and or your personal income from your full time job that is not real estate?
3. If you have owner financed raw land income coming in, can you deduct your in home office expenses from that income?
Submitted: 7 months ago.
Category: Tax
Expert:  Robin D. replied 7 months ago.


In answer to number 1, you start paying in the first year of the sell, You pay each year in the portion of the gain you receive in that specific year plus you pay tax on the interest.

2 The expense cannot be used against your employee work income only your self employment.

3 If you have an office in your home you report that on your schedule C and it deducts from the self employment income but it does not reduce the financed sale amount.

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