taxes on sold house

victory_tea2085October 24, 2009

We are selling our house with 30,000 down and the remaining 50,000 to be paid to us by the buyer over a 15 year period. How will this affect our taxes. Will we still get the tax break our lawyer mentioned? i have lived in the house for 19 yrs and it is our only residence.

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worthy

Breathe easy. No taxes. See IRS link below.

Here is a link that might be useful: Seven Things you Should Know When Selling Your Home

    Bookmark   October 24, 2009 at 9:41PM
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creek_side

I'm curious, didn't your lawyer tell you?

The link that Worthy posted makes no mention of installment payments. You need to run that by a tax professional, if you don't feel confident enough to dig into and interpret the tax rules for yourself. Relying on opinions from an Internet forum for tax advice is probably not the safest way to approach the subject.

Tax laws and regs are so complicated that a former Inspector General of the IRS, a tax attorney by profession, under GW Bush stated that even she could not understand all the tax rules. Please don't expect the collective wisdom of this forum to do any better.

    Bookmark   October 24, 2009 at 10:24PM
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victory_tea2085

creek side,
Just trying to get a heads up on our sale and , of course, I will check with my lawyer. Do you think my question was inappropriate? I am not relying on the collective wisdom- just asking for advice. Why are you so rude?

    Bookmark   October 25, 2009 at 2:16AM
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jlhug

Ask a tax professional. Lawyers aren't always knowledgable about taxes nor are CPAs. Some are, but some aren't.

    Bookmark   October 25, 2009 at 8:38AM
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manyhosta

Take a look at Publication 537, Installment Sales. If you are carrying the contract or mortgage, the interest may be taxable income to you even if the payments on principal are not. As others have said, it would be wise to consult a tax professional.

    Bookmark   October 25, 2009 at 10:32AM
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brickeyee

"Ask a tax professional. Lawyers aren't always knowledgable about taxes nor are CPAs. "

Tax attorneys are the top of the pile, followed by the CPAs.

The principal will not be taxed under the exclusion rules (2 of 5 years, $250,000 per person) but any interest will be ordinary income.

Holding paper on a sold house is a great way to get a good return (especially now) with the security of foreclosing if anything goes wrong and selling the house again.

I hate when my borrowers refinance (or sell the place) and pay me off.

    Bookmark   October 25, 2009 at 12:48PM
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dave777_2009

Victory - RUDE???

Excuse me, but Creek Side was NOT rude. He/She gave you a long, and well intentioned post. Taking his/her time to politely suggest that you take the correct and wise course -and contact your attorney or a tax professional. And you call that Rude??

I have a friend who would like to own a house. Several years back when he could have bought a house because of more lax lending rules - he wouldn't listen to me... I kept telling him to go to a BANK, or a MORTGAGE BROKER; and see what they said... He kept listening to a RE Agent friend of his - who was telling him he couldn't qualify...

RE Agents do NOT know who qualifies for a loan! And - they do not know tax law either.

And, coming to a forum, and asking total strangers for tax advice - is dumb. Sorry. Just is.

Creek Side was giving you wise advice. Advice for your own best interests. Calling him/her 'rude' was inexcusable on your part. My 2 cents.

    Bookmark   October 25, 2009 at 1:04PM
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victory_tea2085

Dave, you make a very good point and creek side has my deepest apology. I do understand what you are saying and I guess my interpretation was way off the mark- sorry again, creek side.

    Bookmark   October 25, 2009 at 1:13PM
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