SALE OF PERSONAL HOME ON LAND CONTRACT

[bub]

I HAVE A CLIENT WHO SOLD THEIR PERSONAL HOUSE FOR $122,000 ON A LAND CONTRACT.  DO THEY HAVE TO PAY TAXES ON PRINCIPAL AND INTEREST OR JUST THE INTEREST SINCE IT IS THEIR PERSONAL HOME THEY SOLD?

[qbteachmt]

You're thinking of the Banking, not the sale.

The Sale is evaluated for if there is reportable gain. Your taxpayer has an installment sale. Interest earned is always taxable.

[bub]

Since the Installment sale is for a personal home which is below the minimum requirement for taxes then is the only thing reportable on the installment sale the interest earned?

[sjrcpa]

Yes