Posted by phil fernandez on April 18, 2000 at 07:17:31:
However if you have just bought this house to flip and you do enough of them you fall into the category of a dealer. In that case you would have to pay taxes on the entire gain as ordinary income, all in the same year. Including the 2nd.
IRS Paymentt - Posted by James
Posted by James on April 17, 2000 at 14:01:41:
I have a question. If I take back a 2nd on a sale do I have to pay the IRS the full amount of the 2nd in the year of the sell or as the money comes in?
Not on a second. - yes on a wrap. - Posted by John Behle
Posted by John Behle on April 18, 2000 at 10:28:09:
Taking back a second and letting someone assume or take over the first can invalidate an installment sale. If you sell on a wrap where you are still paying and liable on the first, you can have the installment sale treatment if other factors warrant it.
Re: IRS Paymentt - Posted by David Butler America’s Note Network
Posted by David Butler America’s Note Network on April 18, 2000 at 24:50:41:
Hello James,
What you describe falls under Sec. 453 (Installment Sales) of the tax code, and should be pay as you go during the term of the loan, with some specific exceptions. Of course, this applies to investment property transactions. You wouldn’t have any tax due on a personal residence up to $550,000 I believe is the current ceiling.
Hope this helps
David P. Butler Vice President, Broker Relations