I'm reading conflicting responses. LLC is involved by seller-financed property loan/contract. I currently have this question from a Cx.
1. If property is owned by an LLC and LLC holds seller-financed property contract.
A LLC is taxed just like a self-employed business is, you will report your income and expenses on the schedule C (self-employment) and that becomes part of your individual return. Therefore the Interest earned from Seller-Financed Property Sale is income.
2.Or if individual is holding seller-financed property contract - interest income is reported
You have to report the interest received on a seller-financed loan as income on your tax return as follows:
- Click on Federal on the left side of the online program screen
- Click on Wages & income
- Scroll down to Less Common Investments and Savings
- On Interest from Seller-Financed Loans, click on the start button
