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Is the rent that is paid to the seller in a rent to own agreement

considered income and require taxes...
Is the rent that is paid to the seller in a rent to own agreement considered income and require taxes to be paid on it?
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Answered in 7 minutes by:
9/1/2012
Phillip B, EA
Phillip B, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 704
Experience: Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.
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Yes. Rental income from a rent-to-own agreement on the sale of a home is considered taxable income and must be reported on your tax return.

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Customer reply replied 5 years ago

how does this work if you still have a mortgage on the property? Can some of this income be deducted from your taxes?

Mortgage interest would be a deductible rental expense along with property tax, utilities, repairs and maintenance, and depreciation.
Phillip B, EA
Phillip B, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 704
Experience: Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.
Verified
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