Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

I used 45.000 to buy and rehab a house(put of my savings -

Customer Question
I used 45.000 to...

I used 45.000 to buy and rehab a house(put of my savings - which I had already paid taxes on) - I sold it for $75,000 at 6% 10 year balloon land contract. Question: I know I have to pay taxes on interest - but my tax preparer is figuring taxes on the principal too - it would seem that I would only pay taxes on ($75,000-45,000= 30,000) the profit over 10 years

Accountant's Assistant: When we are ready I'll take you to the appropriate web page.

I used 45.000 to buy and rehab a house(put of my savings - which I had already paid taxes on) - I sold it for $75,000 at 6% 10 year balloon land contract. Question: I know I have to pay taxes on interest - but my tax preparer is figuring taxes on the principal too - it would seem that I would only pay taxes on ($75,000-45,000= 30,000) the profit over 10 years

Accountant's Assistant: When we are ready I'll take you to the appropriate web page.

Are you there - or should I just withdraw the question

Accountant's Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?

The monthly payment includes a small amount of principal plus the interest.

Submitted: 6 months ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 13 minutes by:
12/23/2017
Tax Professional: Lev, Tax Advisor replied 6 months ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,140
Experience: Taxes, Immigration, Labor Relations
Verified

Generally - you have a choice - to recognize the gain in the year of sale OR to recognize in following years when you actually will receive the principal.

An installment sale is a sale of property where you'll receive at least one payment after the tax year in which the sale occurs. You're required to report gain on an installment sale under the installment method unless you "elect out" on or before the due date for filing your tax return (including extensions) for the year of the sale.

Under the installment method, you include in income each year only part of the gain you receive, or are considered to have received. You don't include in income the part of the payment that's a return of your basis in the property. Use Form 6252 (PDF), Installment Sale Income, to report an installment sale in the year the sale occurs and for each year you receive an installment payment.

Let me know if you need any help.

Ask Your Own Tax Question
Customer reply replied 6 months ago
thanks - I only had this one question - was it for free (1st time) or do I owe a balance?
other wise - I wish to cancel membership today.
Customer reply replied 6 months ago
no thanks - I do not wish to talk to your expert
Tax Professional: Lev, Tax Advisor replied 6 months ago

Please be aware that experts do not have access to your account.

So I may not know what is your payment plan or payment options.

You may contact customer service directly for all payment questions - and I am sure - all will be addressed in your best interest.

After we finish our conversation - I will forward your request to the customer service.

If you still need any clarification or help with reporting - let me know.

Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,140
33,140 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
Sale of a business land & building in 2014 was sold at a
Sale of a business land & building in 2014 was sold at a loss. The seller held a note for the purchase of the sale of $128,000. In 2014 return was filed, showing the loss and the NOL was carried back … read more
Mark Anderson
Mark Anderson
Attorney
Doctoral Degree
10 satisfied customers
I sold a building on a land contract with interest-only
I sold a building on a land contract with interest-only payments the first three years with a balloon payment at the end. How do I report the interest received this year? … read more
Carter McBride
Carter McBride
LLM
1,191 satisfied customers
My wife and I recently bought land and have created an
My wife and I recently bought land and have created an amortization chart in Excel. We want someone to look over the chart we created for our land loan and explain the amortization chart to us and mak… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,450 satisfied customers
My mother sold a house to my brother on a 30 year land
My mother sold a house to my brother on a 30 year land contract in Wisconsin, my brother has lived there for 6 years, the house is being sold so my brother can buy a different house and finance throug… read more
Rick Martin
Rick Martin
MBA
92 satisfied customers
I have a property that was on an owner carried loan, during
I have a property that was on an owner carried loan, during the 4 years I had the property I paid $465 monthly interest payments totaling $22,320. I put $30,000 down when I purchased and paid a $5000 … read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
Does the IRS impute income where Taxpayer:(1) buys land
Does the IRS impute income where Taxpayer: (1) buys land for $45,000, holds land for 10 years, then sells land for $2,700,000 in a no-money-down deal, taking back a $2.7 million purchase money mortgag… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,140 satisfied customers
1) My LLC wants to sell a house as a land contract for $100K
1) My LLC wants to sell a house as a land contract for $100K for 6 years. How this installment sale will be taxed? First year, 15K down in cash plus $14K in monthly installments for that year; and eve… read more
winktax
winktax
Enrolled Agent
Master's Degree
349 satisfied customers
During the current year, Charles, an individual taxpayer, sold
During the current year, Charles, an individual taxpayer, sold land a building used as rental property. Charles purchased the land in 1995 for $30,000 and sold it for $50,000. Charles purchased the bu… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,140 satisfied customers
Our home that we owned for 20 years sold in October 2009 under
Our home that we owned for 20 years sold in October 2009 under seller provided land contract for 12 months, the buyer of our home could not get a loan after the 12 months, so the land contract was ext… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,140 satisfied customers
1. Schiff Company owns 100% of the outstanding common stock
1. Schiff Company owns 100% of the outstanding common stock of the Viel Company. During 20X1, Schiff sold merchandise to Viel that Viel, in turn, sold to unrelated firms. There were no such goods in V… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
I am buying a second a house in Indiana for 159,595 that is
I am buying a second a house in Indiana for 159,595 that is appraised at 169,495. on October 21, 2010. I live and pay taxes in Indiana as well. I am planning on selling the house through a land contra… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
I want to buy a house on land contract for $50,000 and I am
I want to buy a house on land contract for $50,000 and I am putting $30,000 for down payment. I will not have the title of the house until the house is paid off?… read more
Anne
Anne
Master Tax Preparer
1,328 satisfied customers
I was given investment property as a settlement in my divorse.
I was given investment property as a settlement in my divorse. My ex kept the 2,000 sq ft home on 13 acres of property that we built and lived in together for 8 years of our 20 year marriage. The inve… read more
BK-CPA
BK-CPA
Bachelor's Degree
687 satisfied customers
I am subject to the AMT. My house was previously paid off and
I am subject to the AMT. My house was previously paid off and I took a new first mortgage on it. I used the proceeds to buy a piece of land on which I will start to build my retirement home later this… read more
Dr Arthur Rubin
Dr Arthur Rubin
Doctoral Degree
24 satisfied customers
I have a rental property that my son and his girlfriend are
I have a rental property that my son and his girlfriend are interested in renting. I am suggesting they purchase the property land contract. We purchased the property for $54, 000, put $20,000 into it… read more
Anne
Anne
Master Tax Preparer
1,328 satisfied customers
Hi, I really need help. My husband and I have lived in our
Hi, I really need help. My husband and I have lived in our home for the past 7 years; purchasing it on Dec 24, 2008. The owner of the home is in his 80's and wanted to get the property sold. We had pr… read more
Ed Johnson
Ed Johnson
Senior HR Consultant and Business Devlpm
Bachelor's Degree
6,994 satisfied customers
Can I claim the interest I am paying on a land ...
Can I claim the interest I am paying on a land contract on my taxes. It is a second home. Should we put it in our personal name, or use our LLC name?… read more
Marvin,EA
Marvin,EA
Enrolled Agent
Bachelor's Degree
1,605 satisfied customers
My husband (84 and in Assisted Living at $2,000. per ...
My husband (84 and in Assisted Living at $2,000. per month) and I (81 and living at home) need to sell vacation property in order to afford paying for all our expenses in our "golden years"? Both prop… read more
The Geezer
The Geezer
Master's Degree
120 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x