Posted by Dr. Craig Whisler CA NV on July 18, 2003 at 21:45:21:
…concerning L/O because he may not realise how hard it is to get PMs to accept rentals (a lease is a rental) in their parks. You need to discuss this point with your attorney so he can guide you properly.
Regards, doc
land/home is taxed how? - Posted by Philip
Posted by Philip on July 16, 2003 at 13:29:35:
Will a land home package be taxed as 2 seperate things. A sale of personal property and a sale of real estate?
Will the real estate be taxed on a “profit and interest” installment basis…or all at once like capital gains?
Does anyone ever have any luck selling land/home packages on a Contract for Deed, rather than Lease/Option? That seems like the easy, but less profitable way out for lazy me.
I talked briefly to an accoutant and an attorney yesterday, and we visitid briefly, and I ended up with even more questions!
Philip
Re: land/home is taxed how? - Posted by Lyal
Posted by Lyal on July 16, 2003 at 21:38:49:
“Will a land home package be taxed as 2 seperate things. A sale of personal property and a sale of real estate?”
Don’t know what the difference would be. Profit is profit and the IRS will want their pound of flesh.
“Will the real estate be taxed on a “profit and interest” installment basis…or all at once like capital gains?”
You need to search the archives here and on John Hyre’s forum. As I understand it, a sale is taxed as if you realized all the profit in the year of sale. BUT you can mitigate some of the impact by valuing the notes you create at “street value”. You’ll pay less tax the first year and pay tax on the rest of the gain spread out over the life of the note.
“Does anyone ever have any luck selling land/home packages on a Contract for Deed, rather than Lease/Option? That seems like the easy, but less profitable way out for lazy me.”
Why would it be less profitable?? Very similar transaction.
In my area I’d sell on a CD but that’s because of a squirrelly situation with homestead taxes.
Lyal
Re: land/home is taxed how? - Posted by Philip
Posted by Philip on July 16, 2003 at 22:16:37:
Many folks around here do L/O, or what they call Lease/Purchase…and waaay less of the payment goes towards principal…and the person ends up paying 15k over 7 years for a note that would be shorter and smaller by contract.
Plus the attorney I talked to yesterday said in Missouri it was a good idea to make it very clear that it isn’t a sale by continueing to do the taxes and insurance…and I am just lazy enough not to want to fool with those things. So a contract is much more appealing to me.
thanks philip