Seller Carry-back / Installment Sale
Does having a seller carry back financing cause the transaction to be characterize as an installment sale?
Could this be a tool to defer capital gains on the sale of a principal residence? e.g. seller claims 250K/500K and allows carry-back of balance.
This is a great explanation of the concept:
http://www.wwlaw.com/install.htm
This is a great explanation of the concept:
http://www.wwlaw.com/install.htm
Quote:
On 2007-09-25 08:44, cjmazur wrote:
Does having a seller carry back financing cause the transaction to be characterize as an installment sale?Yes, it does.
Quote:Could this be a tool to defer capital gains on the sale of a principal residence? e.g. seller claims 250K/500K and allows carry-back of balance.
The article apex referred to was written before the capital gains exclusion rules were enacted in the tax code.
The capital gains exclusion on the sale of a primary residence allows each taxpayer to exclude the first $250K in profit from capital gains taxes.
Profit in excess of $250K per taxpayer would still be taxed as a capital gain. Installment sale tax treatment would allow the taxpayer to spread out his capital gains tax liability over the term of his seller financing.[ Edited by NewKidInTown3 on Date 09/26/2007 ]
So if the owner does not agree to sign the deed over - you then have to foreclose to get the property right?
Affirmative. But you could grab the Deed first and then go after the second.
[addsig]
Well supposed the 2nd foreclosed and sold the property to you and the first now wants to assign the mortgage. If the previous owner (mortagee) pays the first would you then lose out or are you at an impass because you are the property own and they are the one responsible for the mortgage?
Which would be better to do - to have the first give you a satisfaction or to have them assign the mortgage to you?
how could the 2nd mortgage foreclose, own the property, and there still be a 1st position to be paid?
am i missing something?
When the 2nd forecloses, the Deed to the property goes to the buyer at the foreclosure sale. Subject to the first and any other senior encumbance.
The buyer of that 2nd now has ownership, with all that entails.
[addsig]
Ive never heard of this guy, but there is lots of free information available about the note business on various sites such as papersource, creo, noteworthy. read the posts pay attention to what the experienced brokers have to say. Find a niche area to work.
Mark
Why are 2 and 3 year old posts coming to the front now?
Yeah, why to the front....hopefully just a glitch. Perhaps sopmeone posted illegally and it was removed.
Any ideas?
If you did it, how did you end up structuring it?
yes, do tell....
It was just a matter of time.....theoretically the interest rates should be less than 30 years once competition hits the market.
Can the 20-year auto loan be far behind?
Da Wiz
Hopefully so.
Good for the Consumer.
Good for the Lending Industry.
John (LV)
oh, they will be available. Residential loan brokers I know are pitching it as better than interest only and finding an enthusiastic audience. As long as people want more for less and focus only on monthly payments, while ignoring all other factors, the financial world is "going to give the people what they want " so consumers, bend over and smile baby!
50 year mortgages = perpetual renters.