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I bought a rental home in 2007 for $285,000 (with 20% down

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<p>Not BANKRUPTCY question:</p><p>I bought a...
<p>Not BANKRUPTCY question:</p><p>I bought a rental home in 2007 for $285,000 (with 20% down and a First-Mortgage of 228,000) and later I sold the home at a loss on a Purchase-Contract sell for $280,000 in 2007; meaning that I kept title and made the payments to the first mortgage and taxes with BUYER payments. BUYER was to refinance in 4 years. BUYER got to take the write-off for the interest payments and taxes. I took the 2007 loss of 5,000 (difference between my purchase price and sell price). On my taxes for the last few years I took a seller-financed income on Schedule-B Seller-Financed Mortgage Interest Statement and then on Schedule A line 14 Investment Interest I took the deduction of the mortgage-interest report to me by the first-mortgage holder. Per mutual agreement I have taken back the house as of 12/28/2010, BUYER will have lost the $20,000 of mortgage principal reduction as BUYER penalty, which BUYER paid only in 2010, other years were interest only. BUYER owed me $260,000 as of 12/28/2010. I will get the house back that is worth only about $200,000 now with a renter in it. I will continue to rent it. My questions are what is my basis now for starting depreciation and for losses? Is it $260,000, the original $280,000 minus the $20,000 BUYER paid in principal reduction? Or can I make it $200,000 what it's now worth and take an additional loss of $60,000 in 2010? Do I need to report on my taxes the $20,000 (on what form) paid by BUYER to me, even thou it is not a profit but return of some of my investment since originally I paid $285,000. I have round off numbers to keep it simple. </p>
Submitted: 7 years ago.Category: Tax
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Answered in 13 hours by:
1/4/2011
Tax Professional: Fran-mod,
 replied 7 years ago
Fran-mod
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Customer reply replied 7 years ago
Thanks for the response. This is the second time I am asking the question.
I had a partial answer from Dimitry Alexander Kaplun, but I don't know what to do? He said he was asking someone else for more info and wrote to Hold-on, so I don't know if he is getting back to me or I should just pay him? That is why I asked the question again.

So what do I do? I do want someone from California to answer.
Customer reply replied 7 years ago
PS: it's not easy to increase the amount I would pay for an answer. You need to have your programmers review and recode. I'm a programmer myself.
Tax Professional: Fran-mod,
 replied 7 years ago
Hi,

If you go to My Questions and access the question where you wish to raise the price, you can then click on Edit. You should see two boxes, one on top of the other, in which you can make your changes. One will let you alter the price. Otherwise, if our system won't let you do what you want, just tell me what you'd like the value reset for. It's an easy fix from my end.

You are never required to pay for an answer until you're fully satisfied. If your previous expert could not address all you needed and has opted out to refer you to another expert, you can wait until you get a helpful response from a California expert before paying.

I can help find you one on this thread, but as you're looking to increase the value, do that first, as it will likely make a difference. to the experts who look your question over. If you need further help from me, just reply here.

Regards
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Customer reply replied 7 years ago
OK, I increased the value, can you help locate someone to answer this question. Joe
Tax Professional: Fran-mod,
 replied 7 years ago
Hi Joe,

I’ll try to find an Expert to assist you. When an expert responds, you will receive an email.

When you get a helpful answer, please remember to click on the green Accept button so that your expert gets paid for his work.

Thanks for your continued patience.

Regards,

Fran
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Customer reply replied 7 years ago
will do, I've used your service before so I'm familiar with how it works,... don't know why this is taking so long.
Tax Professional: Fran-mod,
 replied 7 years ago
Hello,

One reason it's taking so long is that you specifically requested a response from a California expert. That would dramatically cut down the number of available experts who might be able to reply to your post.

I did reach out to some California experts, however. They tell me that this is a tax rather than a legal question. So I'm going to send it to Tax and perhaps there will be a California CPA who can assist you.

Regards
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Customer reply replied 7 years ago
I think any good tax expert can answer this. It should apply regardless of the state.
Tax Professional: Fran-mod,
 replied 7 years ago
Hi,

I've removed the reference to California in the post, and the tax experts will be looking this over for you. You'll get an email when there's a response to the thread.

Regards
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Customer reply replied 7 years ago
Thank you for the help. I re-listed it and I got a good answer.
Tax Professional: Fran-mod,
 replied 7 years ago
Happy to hear that!

I will close this question. Enjoy the weekend.

Regards
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