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to a gentlemen who ended up not paying rent, turned it into a lawsuit and I could not pay the loan so the installment was revoked in 2018 (I did not sell).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?
Thank you
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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?
Yes all of the above were done including the legal foreclosure process. Everything from start to finish was done through attorneys
@CarlCan you please help with this? I still haven't figured it out
I think I can help here. @sfnewton was the foreclosure completed and finalized on or before Dec 31 of 2019?
When you say "installment loan" I am assuming this was a seller financed loan and no third party mortgage lender was involved. If that assumption is wrong, you have to let me know because it matters.
@Carlyes the foreclosure was completed before Dec 2019 and yes you are correct. It was a seller financed loan
Thanks for getting back to me
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