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That’s the type question I like to have the seller discuss with their CPA/tax adviser.
No reason you can’t be there with them to make sure it gets presented correctly and so both contract parties come to a contractual meeting of the minds. You may also do this on a 3 way conference call if a face to face meeting doesn’t work.
Hello
I found a SFR, distress sale & the owner owns the house free/clear & has to move out of the area. Does anyone know how it works in FL if we structure a zero interest note & a 50% balloon on the back end?
Whould they have to pay taxes on the payments they would receive towards paying down the note?
Sincerely,
Dan
If it was their personal residence, they can get $250,000 tax free if single and $500k in profit tax free if married.
If an investment property and they have owned at least 1 year then they will pay 15% capital gains — but there are a lot of deductions which could reduce that .
There could be other state/county/city taxes due upon sale too —
If you structure it as an installment sale, then they only have to pay taxes on the money they receive when they receive it.
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