DanielV01
Expert Alumni

Deductions & credits

The general idea is that the sale itself is a capital transaction.  The value of the principal of the loan is considered having been received on the day of the sale.  Later, the payments you receive are tax-free, except for the portion that is interest.  So, there are two parts to this.  First, you need to report the sale.  This FAQ has instructions:

https://ttlc.intuit.com/replies/4241480

This is how to report the interest you receive (instructions from TurboTax Tonita):  https://ttlc.intuit.com/replies/5740058

One more note:  for state taxes, you are only taxed in Illinois, because Wyoming does not have a state income tax.

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