Contract For Deed
Hi,
In order to sell our house we had to provide owner financing. the home cost us about 200,000 and we sold it at a loss for 172,000. The buyers gave us 20% down and we have a contract for deed for 15 years.
The problem is what to do with our taxes.
We lost on the sale and will not regain our investment even with financing.
How should we file this?
We had two other homes that we lost on in the past 5 years that we currently take a deduction for.
Thanks TC
If the property was your primary residence, then the loss is not deductible.
If the property was an investment property, then you only have a capital loss if the purchase price minus depreciation is greater than your sale price. If so, then that difference is a capital loss on your Schedule D. If not, then you have depreciation recapture tax to pay.