Capital Gains on an Installment Real Estate Sale

[RaineB]

I bought a house in October 2023 and plan to sell it in April or May 2024. 

I'm considering doing an installment sale, reported on IRS Form 6252. The buyer would pay $100,000 down and about $4,000 in interest in each month on the remaining balance. Then in January 2025, they'd pay the rest, about $800,000.

The $100,000 I receive at the time when the title is passed would clearly be taxed as a short-term capital gain. Does that short-term capital-gain rate get locked in for all profits of the sale, even though I won't be receiving payment of the remainder until 2025?

i.e. if I structured the sale this way, do I still pay short-term capital gains on the $800,000 I would receive in January 2025, which is more than a year after I bought the house.

Thanks!

[Mike9241]

yes . the taxability as short-term or long-term gain is based on the purchase and sales dates of the property not when you receive the proceeds.

[Critter-3]

The sale itself is short term and all cap gains will be considered short term even if you have an installment sale spanning decades.