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I sold a rental property and carried the note. It is a 30 year 0% interest loan. Which TurboTax do I need, to calculate imputed interest, cap gains, etc.?

 
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I sold a rental property and carried the note. It is a 30 year 0% interest loan. Which TurboTax do I need, to calculate imputed interest, cap gains, etc.?

Ok ... a ZERO interest loan for 30 years ????    You need to compute the interest yourself and you will need at least the Premier version if you use the ONLINE program   OR   you can use ANY of the DOWNLOADED versions. 

 

 

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4 Replies

I sold a rental property and carried the note. It is a 30 year 0% interest loan. Which TurboTax do I need, to calculate imputed interest, cap gains, etc.?

Ok ... a ZERO interest loan for 30 years ????    You need to compute the interest yourself and you will need at least the Premier version if you use the ONLINE program   OR   you can use ANY of the DOWNLOADED versions. 

 

 

Kat
Level 15
Level 15

I sold a rental property and carried the note. It is a 30 year 0% interest loan. Which TurboTax do I need, to calculate imputed interest, cap gains, etc.?

Here's a link to a very good article with current info regarding the Applicable Federal Rate:

 

https://www.investopedia.com/terms/a/applicablefederalrate.asp

*** I am NOT a tax expert. I am a seasoned TurboTax user, and volunteer to provide assistance to TT users. Nothing I post is to be considered TAX ADVICE; I bear no legal liability for responses.***
Carl
Level 15

I sold a rental property and carried the note. It is a 30 year 0% interest loan. Which TurboTax do I need, to calculate imputed interest, cap gains, etc.?

As an addendum, be aware that you *will* pay taxes on what is referred to as "imputed interest", like it or not. I've not checked it out personally, but it's my understanding the going federal rate for imputed interest is 1.5%. Also, make sure you keep every single scrap of paperwork because chances are 99.9% that you will be foreclosing on the property and taking back ownership within 5 years. Without proper paperwork and documentation, it will be a tax reporting nightmare.

I sold a rental property and carried the note. It is a 30 year 0% interest loan. Which TurboTax do I need, to calculate imputed interest, cap gains, etc.?

Is the imputed interest then entered on form 1040 under "Interest from Seller-Financed Loan", as though the buyer actually paid the interest? Or, is it entered somewhere else? Thanks

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