I have a similar situation in 2024. A 1099S was generated at closing for the total of the 10-year rent-to-own value, although no additional funds were received at closing.
The rent-to-own agreement specified a monthly rental amount, although it did not differentiate principle and interest.
The rent was considered payment towards eventual transfer of ownership assuming it was paid for the 10-year period. If not, the agreement stated that no refunds would be provided to the renter.
The agreement did not specify payment of annual taxes and insurance, although we paid all annual taxes (which were deducted from the annual rental income claimed on our tax return) and the rental carried any required insurance.
We paid taxes on rental income for the entire 10 year period, and due to the fact that no money changed hands at closing I don't believe any tax is due on the sale, however I'm not sure how to enter this in turbo tax.
I did not consider depreciation when calculating rental income.
Any help you can provide is most appreciated!
