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Hello, I have a property I got out of a foreclosure a tad over two years ago and have lived in it as my residence. If I sell it with low interest I can probably get twice what I put into it. If I financed it my self over say, 10 years with a balloon ,would all the income over the years be tax free? Would the interest be tax free?
My best to you from the Great NorthWest,
Pat
Pat,
I don’t know the answer for sure. So I will try to get Jack to get on the forum and answer you.
It is my understanding that the only tax free part of the 121 is the equity you get when you cash out and you have to do it within 2 years of moving out.
I’m not sure how the 121 is treated when you sell with an installment sale – but my guess is the 2 year rule still applies.
Good question! Would be an excellent exit strategy.
Jackie
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