Re: Resale Taxes??? - Posted by Bill (in GA)
Posted by Bill (in GA) on April 05, 2006 at 17:38:27:
Let’s test my “knowledge”… Not 100% on each of these, but maybe someone can clarify my thoughts and provide corrections where necessary.
I don’t think you would have capital gains tax on the first sale. Would that you could be so lucky! I believe the sale is treated as regular income.
If you have notes receivable but aren’t doing high volume business, you can use the cash method of accounting rather than the accrual method. In this case, you can pay taxes only on monies you collect, in the year you collect them. Search the archives for “jhyre tax cash”. The very first post that appears gives compleat info. I looked up the tax laws involved, and it looks like it’s legit.
John Hyre (JHyre) sells RE accounting and entities courses. They are quite well rated throughout the forum, and have MH-specific parts.
- Your second sale is just another sale, irrespective of what year it’s sold again. It does not matter to the revenooers that you’ve sold the same item again. You can probably deduct any losses incurred against your current year tax liability, and the cost of reposessing the home. It will probably all just balance out in this way.
Again, I’m not a competent authority in any of this. I just want to know if my understanding is correct. Point-by-point, comments, anyone?