I purchased a Commercial rental property in 2016 on installment. I rented the building to a gentlemen who ended up not paying rent, turned it into a lawsuit and I could not pay the loan so the installment was revoked in 2018 (I did not sell). How do I show this on my taxes? What do I follow through turbo tax to properly enter this event?
I need some more facts first, because if your purchase of the property wasn't done in accordance with state and other legal requirements, you may have a nightmare that requires professional help.
- Were loan papers generated showing that you were purchasing the property on installments?
- Was your name on the property deed as the owner, with the "lender" (person you were paying installments to) listed as a lienholder on that deed?
- Did the person you were paying installments to go through the formal and legal foreclosure process? Or did you execute a "quit claim deed" (or similar) in lieu of foreclosure?