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Hobie1
Returning Member

capital gains tax

how can I avoid capital gains tax on early payoff of owner financed mortgage?

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5 Replies

capital gains tax

Have you been reporting the sale as an installment on form 6252 since the sale ?    Or did you report the entire sale in the year of sale and just report the interest in the following years. 

Hobie1
Returning Member

capital gains tax

report principle received as installment sale each year

capital gains tax

Then you will continue to report all the principal and interest received each year as you have in the past ... the principal goes on the 6252 and the interest on the Sch B.  On the 6252 the taxable portion will be computed even if they paid off the mortgage early. 

capital gains tax

there's no way to avoid reporting the gain on this sale.

 

capital gains tax

Of course not ...  eventually you have to pay the piper.  The 6252 delayed the payment until you got paid and  now you got paid.  

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