Which are better overall tax implications. Understanding that the tax % is based on the individual's tax bracket at the time:
If I sell a house, that has been a rental for over 5 years, at owner financing, terms being:
- 20% down payment
- 5 years owner financing
- at 5% interest
- 30 year amortization
- balloon payment after 5 years
Question: when selling an investment house, one pays long term capital gains on the net profit.
What are the tax implications when it’s owner financing? Are the taxes deferred until the balloon payment date or due at the initial sale date?
