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SALE OF PERSONAL HOME ON LAND CONTRACT

bub
Level 1

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?

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3 Replies 3
qbteachmt
Level 15

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.

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bub
Level 1

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?

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sjrcpa
Level 15

Yes


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