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.