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Self financed lot which I repossessed because of buyers death

I self-financed a lot at 10 years which I end up repossessing it after the 4th year because of buyers death.

The sales price was $38K at 9% interest with $5K down in 2015.  

 

After a year of not receiving payments, the lot was inherited by his son who didn't want it. , I took the lot back using a Deed in Lieu of Foreclosure in 2018.  I sold it in 2019 for $28K.

 

1. How do I file the Deed in Lieu in 2018, which IRS forms are needed?

2. What Tax forms should I file for the sale of the Lot at a loss in 2019?

 

* I'm using Turbotax Home and Business, 2017, 2018, 2019. 

 

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Level 15

Self financed lot which I repossessed because of buyers death

You should review the information in the IRS publication at the link below.

 

https://www.irs.gov/publications/p537#en_US_2019_publink1000221735

 

You should also seek professional tax and legal guidance for this matter.

 

 

Your gain on repossession is the difference between the following amounts.

  • The total payments received, or considered received, on the sale.

  • The total gain already reported as income.

 

Also, any deed that you obtained from the repossession needs to be filed with your local county recorder's office, county clerk, or equivalent authority. 

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1 Reply
Level 15

Self financed lot which I repossessed because of buyers death

You should review the information in the IRS publication at the link below.

 

https://www.irs.gov/publications/p537#en_US_2019_publink1000221735

 

You should also seek professional tax and legal guidance for this matter.

 

 

Your gain on repossession is the difference between the following amounts.

  • The total payments received, or considered received, on the sale.

  • The total gain already reported as income.

 

Also, any deed that you obtained from the repossession needs to be filed with your local county recorder's office, county clerk, or equivalent authority. 

View solution in original post

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