Taxation and Structuring of Real Estate Installment Sales (Part 1 for Investors)

You've got a piece of property and you want to sell it to a tenant or a buyer on a installment sale. How do you structure this? Take notes and watch this video to prevent yourself from getting hammered with taxes from installment sales.
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ABOUT CLINT COONS

Clint Coons, Esq. is one of the founding partners of Anderson Law Group, Clint has grown his legal and tax firm to over 400 employees by assisting real estate investors with creating and implementing solid entity structuring plans. His success in these regards is in large part due to his personal investing experience. A successful attorney, real estate investor, and speaker, Clint has used his innovative and dynamic strategies coupled with knowledge borne from experience to help thousands of people save millions of dollars and build real wealth.

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The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice.

#InstallmentSales

[RyanMitchell-tk]

Clint - this is a super helpful video! A quick question regarding the portion breakout with capital gain, depreciation recapture, and cost basis...how is it determined how much goes towards each (capital gain, depreciation recapture, and cost basis) when a monthly installment is paid to the seller? Thanks!

[SeanTong]

Very insightful video Clint! Regarding the interest rate of the installment sale, is there a required range? With today's rate this high, I am thinking to do a sweet deal of say just 2% to seller in installment sales. Would that raise eyebrow in the eyes of IRS? Thanks

[Jc-smvi]

Thank you for such a great information, very much appreciate it! My situation is a bit different. My dad passed on to me the house and now I'm selling it under a year of owning it as FSBO under land contract. I know I don't pay capital gains due to being inheritance (please correct me if I'm wrong). The monthly payment I will be receiving from the buyer it's at 0% interest. Will the 0% interest affect me when I report this as income when filing taxes? Do I have to report it as income in taxes even if its an inheritance in installment payments?

[harrisonsold]

Thank you for this brother - needed this info

[starr]

Can you make a video on taxes and structuring when selling as a contract for deed

[WillBockovenCRE]

Can you install the depreciation recapture? I thought IRS required the seller must report the entire depreciation recapture amount – and to pay that tax – to the IRS in the same year of the sale.

[MichaelRistau]

Great video Clint. If the seller would have had all gains excluded using the primary residence gain exclusion, would they still get that cap gain exclusion when doing an installment sale? ( I would still expect them to pay OI tax on interest received.)

[DavidMortaz]

What would u recommend for protecting ourselves for renting an Granny Unit on our own primary residence? We are planning to register it legally as an Accessory Dwelling Unit (ADU)?

[robbystelly]

Hello, what is the advantage of moving the deed into another llc after the sale vs just holding it in one’s own name?

[quincydwilliams]

Hi Clint, I have done 10 installment sales last year. I signed a deed over to the buyers but it is held with their attorney until they complete the installment. Will I have to pay short term capital gains on all 10 properties? And would I have to pay that capital gain all in the same year? Also, I took $40k downpayments and used that’s downpayment to pay the downpayment and closing cost for the loan

[seyi]

Thanks for the video Clint. Super useful, as always. I had one question regarding entity set up; do you foresee any issues with using a cell of an IL series LLC to hold the property, where that cell is owned 100% by the WY LLC HoldCo?

[BrogeKilrain]

You better read the new Govts bail programs

[harrisonsold]

For an installment sale, on multi-family straight seller finance (no bank debt) for example, who typically pays property tax? If it is new buyer/investor does the taxable basis step up to the new agreed on purchase price? Thank you for the insights brother!

[chrisfelts]

Why Wyoming LLC? Any perks or is that where you live?

[greggrood]

Makes things way too complex for the average investor

[starr]

Is the note entity holding llc a c-corp or s-corp

[AberrantArt]

I hear people tell the seller that if you do a seller finance that the seller can save money in taxes. It doesn't sound like that is very true after watching this. Is that a lie to get the seller to do seller finance?

[StuffBudDuz]

Good info, but what you did to the flippers was kind of crappy. "Flippers you want to stick around till the end of the video to find out what to do." Then at the end you tell them "watch next week." That sucks, dude.