"So I still have made no gains"
Are you sure? Since you are financing the buyer, you have made an installment sale. When you sell your property through an installment sale, you must report the capital gain as it is received. To figure this out, you must know the cost basis of the property. The cost basis is the amount you paid for the property plus any sales expenses and improvements. You then subtract the cost basis from the amount you sold the house for. For example, if you sold a house for $100,000 and you had a cost basis of $40,000, this gives you a gain of $60,000. If you spread the sale out over 10 years, this results in a $6,000 gain per year.
>>Note that the fact that you are financing the buyer has no relevance to the calculation of your capital gain.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
