Accounting Question - Posted by Kenny (FL)

Posted by Chuck-NY on April 03, 2002 at 22:47:09:

I would recommend you contact Ernest Tew in the state
of Florida. He can tell you how you can put off owing any cap. gains by using his Net Lease & Option forms.
I hate cap. gains and I would support a zero percent
cap. gains tax !! Don’t forget to subtract your expenses from your gain.

Accounting Question - Posted by Kenny (FL)

Posted by Kenny (FL) on April 03, 2002 at 22:23:42:

First off, thank you EVERYONE on this board for providing valuable commentary on Mobile Home dealing, I am just getting started and have several deals working.

I have an accounting question. I realize that we must pay the taxes up front on any gains made on the sale of a mobile home. For example, I buy one for $2000 and sell it for $8000 with $1000 down and a note for 36 months, 12.75%, payments at $235.02. I owe tax on the $6000 gain in year 1 plus taxes on the interest I collect in year 1.

Now say my buyer pays for 1 year then I have to take the home back. I have paid the taxes on the gain, even though I have not fully realized the gain in my pocket! If I have to take the home back, can I claim the unrealized gain that I paid taxes on already as a loss? For I am SURE that when I go and sell the home again, I am gonna get taxed AGAIN on the sale, with an even lower cost basis.

Any insight is greatly appreciated!

Re: Accounting Question - Posted by David (OH)

Posted by David (OH) on April 05, 2002 at 08:50:21:

There is a way to take the unrealized gain as a loss, but I’m not sure how it works. If you don’t get a good response, I would repost this question after 4/15. Most of the people who really know what they are talking about as far as taxes go are pretty busy right now. Just an opinion.


Or…use the cash method here: And a follow up? - Posted by Mike

Posted by Mike on April 04, 2002 at 24:16:51:

ON to my question, and not to hijack the original posters question, I believe they are one and the same.
If you DO use the cash method accounting, and the Buyer stops paying anywhere along the line, and you must reposses, and resell, what happens to the original sale regarding taxes?? And does it tie into the second sale in any way?? Good Question Kenny!!!