I sell property and the mortgage is part of the closing cost. It that included in cost basis. I didn't make a profit on the mortgage part that was due

[IreneS]

You provide the mortgage for the purchaser?

[loubell]

I have to pay the mortgage to the bank and then I get what is left over. I sell for 310000, my mortgage is 155000 along with closing cost. Is the $155,000 mortgage that is paid off part of closing cost

[IreneS]

No.  It is debt service.  You can deduct the mortgage interest you pay as an expense; the interest you receive is income.

[IreneS]

The loan (mortgage) is not considered an expense, a closing cost, or part of the cost basis -- it is debt service.

If you are providing the mortgage to the purchaser and they make payments to you, it is considered an installment sale.  The interest is income to you.

Report the sale as an installment sale.  You can enter the information in TurboTax using these steps:

1.  Click on Federal > Wages & Income 
2. Scroll down to the Less Common Income section and click on the Start/Revisit box next to Installment Sales. 
   
3. On the Installment Sales screen click on the Yes box.
   
4. Continue through the interview, entering the requested information.

 If the property is a business asset, enter is as the sale of a business item in your business return.