topic Tax Year Prior to 2020: I've held a Seller Finance Mortgage (Interest Only) since 09 and have reported on SchB each year. In 2019 the person refi and pd off the mortgage. How do I record this? in Deductions & credits

Tax Year Prior to 2020: I've held a Seller Finance Mortgage (Interest Only) since 09 and have reported on SchB each year. In 2019 the person refi and pd off the mortgage. How do I record this?

don-naes — Thu, 25 May 2023 14:46:09 GMT

Re: I've held a Seller Finance Mortgage (Interest Only) since 09 and have reported on SchB each y...

VictorW9 — Wed, 29 Jan 2020 21:09:23 GMT

I assume you have already accounted for the sale of the property in 2009. There is nothing for you to record except for any outstanding interest payments made with the payoff of the mortgage. You will record the interest part as you have always done in schedule B.

Re: I've held a Seller Finance Mortgage (Interest Only) since 09 and have reported on SchB each y...

don-naes — Wed, 29 Jan 2020 21:22:24 GMT

I just checked my 2009 return and the record the sale (capital gain) was NOT recorded. Can I record the gain for 2019 or amend the 2009 return? Please advise as to best course of action. Thank You.

Re: I've held a Seller Finance Mortgage (Interest Only) since 09 and have reported on SchB each y...

VictorW9 — Wed, 29 Jan 2020 23:08:39 GMT

Generally, to claim a refund, you must file Form 1040-X within 3 years after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later. Returns filed before the due date (without regard to extensions) are considered filed on the due date, and withholding is deemed to be tax paid on the due date.

Having said that, you may now need to recognize the gain or loss on sale of property. For the buyer to have been able to refinance means that transfer of property happened at some point. When that happens will be the date you will use for sale of property. If that happened in 2019, then you will recognize the sale in 2019.