Installment Land Contract Tax Question - Posted by Joe
Posted by Joe on July 31, 2003 at 20:22:39:
In March 2003 I sold a property on an installment land contract. This was a first ILC for me and the buyer will be getting bank financing soon. I’m still not sure why the buyer didn’t take advantage of the extremely low rates as they both have great paying jobs ($95k/yr), great credit and no debt.
Here’s the facts and the question:
There is an underlying mortgage with a balance that closely mirrors the note that we wrote for the ILC. At the time of the sale I received $5000 down and fininaced the ILC for $107,000 at 9.5% for 26 years.
I know that the buyer will now get the mortgage interest write off but how does this transaction affect me. Do I count the entire interest portion of his payment to me as income? Am I able to counter this income against my interest expense? And can I continue to depreciate the asset?
Any insight or direction for me to get info is greatly appreciated!