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Deductions & credits
The $150K down should be put into an escrow account with an escrow agent, meaning that you can't get it until you close on the sale, or the buyer doesn't follow through with the sale. Then it's not reported as income until the tax year you actually close on the sale.
What the down payment does it take the property off the market with a guarantee that you will sell to the prospective buyer and no one else. Then depending on the terms, if the buyer backs out of the sale it's usually a case of where the buyer sacrifices their down payment (or a portion of it). The sacrificed amount is reported as income to the seller in the tax year the buyer backs out and the escrow agent releases the money to the seller.
‎October 25, 2021
11:46 AM
970 Views