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don-naes
Level 1

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?

 
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VictorW9
Expert Alumni

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?

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.

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VictorW9
Expert Alumni

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?

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.

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don-naes
Level 1

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?

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.

VictorW9
Expert Alumni

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?

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.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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