How Does a CD Sale Effect Seller's Cap Gains? - Posted by Rolfe K Mpls/StP

Posted by Dave T on March 28, 2000 at 17:02:45:

The IRS considers a contract for deed an installment sale. The seller would report his interest income and return of principal exactly the same way as he would for an installment sale.

You ask how capital gains are paid when selling rental property and investment property on a CD. Unless you are defining investment rental property differently than the IRS, property held for the production of income (e.g., rental property) IS investment property. A cash basis seller who uses an installment sale to finance the sale of his investment property, reports his capital gains and interest income as it is received. The IRS even provides special tax forms to report the installment sale and the annual installments received each year. The forms assist the taxpayer in computing the capital gains realized each year and the amount of interest received.

How Does a CD Sale Effect Seller’s Cap Gains? - Posted by Rolfe K Mpls/StP

Posted by Rolfe K Mpls/StP on March 27, 2000 at 23:25:19:

Dear Creonlinites;

I’ve always assumed a Contract for Deed, or an installment sale, would defer the seller’s cap gains tax. Now I wonder…How?

How and when does the seller report the gain when selling an investment property on a CD?

How and when are cap gains and/or ordinary income taxes paid when selling a rental property on a CD?

Thanks, and never quit. Rolfe Kurtyka