Land Contract And Tax Benefits
If I sell a property on land contract with an underlying mortgage, can I still write off the depreciation. Also, can I write off the mortage payment? Does the land contract buyer get any tax benefits.
Brenda
Well Brenda, I was hoping someone else would answer you on this one because I'm not entirely comfortable with the state of my own knowledge here.
but they've had a week so here I go.
My understanding is that yes, you can still continue to depreciate with the understanding that by doing so you reduce your basis so you're going to have to recapture those depreciation expenses when the contract pays off.
The mortgage payment is still fully deductable.
yes, the Land Contract buyer can also depreciate from his (presumably higher) basis.
Check with your tax accountant.