I am a small business owner and bought my property through owner financing with a down payment and 10% interest rate.  I want to pay off the principal of the loan off and the financier who owned the property says that he will not accept it because the full payment would put him in a higher tax bracket.  I told him that he only pays taxes on the interest earned on the loan.  Can someone please tell me where exactly the taxes are paid in this situation and in case I want to sell this property through owner financing?\n\nThank You
129757
You are correct. Taxes are only paid on "income," and since the money loaned to you had already been earned by him, he would be responsible for the taxes on it regardless. The interest he earns off the loan is considered income, and he would have to pay income tax on that.
664573
Talk to the bank to take a business loan. If the profits are great, you'd be crazy to give away the share of the profits to an investor, just keep it to yourself.
268415
Section 1250 requires that gain on the sale of real property be treated as ordinary income to the extent of the depreciation claimed in excess of straight line. Any gain in excess of this ordinary income is section 1231 gain.\n\nGood question. When I was in similar situation in 1997, tax rate was 25 percent. A tax adviser would certainly be able to answer this for you.\n\nHope this helps!\nNewarview
221031
The game that you are playing is not a good one. Anyone that would even consider doing something like this is insane. First off, you buy the property with cash from an unsuspecting person that is in financial hardship. You then, more than likely, charge these people rent to live in their own home with the promise to sell the property back to them after a certain time period. If they default on the rent they are paying you evict them. \n\nPeople, if you are in trouble with your mortgage payment, please please go talk to a mortgage broker. There are many options that you may qualify for instead of selling your home to a person like this. The only way this type of scenario can help you is if you have no other options and have been turned down for a refinance.\n\nIt is violation of this sites policy to solicit business in case you were wondering.
17791
If you are able to obtain financing thru a seller you maybe able to get more favorable terms depending on your negotiating with the owner.  My experience so far has been there are few people that are willing to give seller financing.  The majority of people selling their homes use the proceeds for a down payment on a new place.  Being a loan officer, I have leaders that will give 100% financing with a 580 Fico score.  Your interest rate at that score is not the greatest, but it gets you in the house at least.  You can also have the seller pay your closing close so you can get into the home "with no money down". You will need 2-6 months of reserves to qualify for a loan ie 401k, IRA, checking or saving.  A seller financing the deal will not ask this from you either, as another pro of this option.  Send me an email if you have questions about your specific situation.  There is so many creative things you can do with R.E.  Don't let not have money stop you from purchasing property...
3302
The bank would much prefer you to make your payments compared to taking on a property.  Talk to them.  A lot of times they can work out a deal.
585399
There is most likely a "due on sale" clause in your financing paperwork somewhere. Legally you can sell the property, however if the bank finds out that you sold it they will require that you pay off the balance of your loan immediately. Depending on the wording of the contract, there may also be an early pay off penalty. Your best bet is to talk to a real estate lawyer. It is very hard to owner finance a property in Texas if you still owe money on it. Over the last few years, a lot of people have abused the system and it has forced the law makers to crack down on the owner financed contracts.
253327
Check your CC&Rs (Conditions, Covenants and Restrictions) which sets out the rules for condo residents.  It should set out specifically what consequences there may be for unpaid fees to the HOA.  But I agree, why don't you just pay it?
660951
You should consolidate, since rates will be going up to 7% or higher.  The interest is deductible, but you're still paying more with higher interest rates.  Say you're in the 25% tax bracket, and have $10,000 in loans.  At 5%, you pay $500 in interest. The tax deduction on the interest comes out to $125, so you've paid $375.  At 7%, you pay $700 in interest, the tax deduction is $175, you've paid $525.  The worse the interest rate gets, the more (net) you'll have to pay.
78168
My advice is this, a contract is not going to assure that they pay and yes you will be able to sue in small claims court the the money owed but if you feel that you don't want to deal with all that I have a solution. I happen to be an investor who buys real estate notes which you clearly have. Now I would be willing to cash you out and give a lump sum of cash for your property and you can walk away and not worry about it. durland78@yahoo.com
557622
A. Cash flow to the creditors = Interest payment + Loan repayment\n\nIn this proble, we get Interest Payment is 15,000 and Loan Payment is 6,500 (Redeemment of 6,500)\n\nSo cash flow to creditors = 15,000+6,500 = 21,500\n \nB. Net Fixed asset is increased by 5,000 means that this much of money has gone out from working capital. In the meantime the company made money in this way \n\nSales - all expenses - tax - depreciation - interest payment - dividend \n\nor 145000-86000-4900-12840-7000-15000-8700=10,560\n Later they have paid 6500 to crediotrs and got 6450 by reissuing shares. So net income becomes 10,510.\n\nThis money is used to buy fixed asset of 5,000 so net addition of working capital would be\n\n10,510 - 5,000 = 5,510\n\nI hope I have explained you in a easy way to make you understand
235199
DEPENDING ON THE AMOUNT OF THE HOME EQUITY LINE THEY COULD FORCLOSE ON YOUR HOME.  YOU USED YOUR HOME FOR SECURITY ON THE LOAN AND NOW THEY OWN A PORTION OF IT.\n\nI WOULD SUGGEST GOING TO THE BANK AND TALKING TO THE LOAN OFFICER AND SEEING IF YOU CAN MAKE JUST THE INTEREST PAYMENTS UNTIL TAX TIME EACH YEAR.  THEY MAY LET YOU GET AWAY WITH IT.\n\nGOOD LUCK
15888
As little as possible is often the most popular idea. However, it is wise to put down enough to make sure the property income will service the debt payments and taxes. You don't want to be paying out of pocket evey month unless you really need the loss for tax purposes. \n\nMost banks or savings and loans will require between 20 and 30 percent down payment in the US. The lenders are looking for the property to break-even or have some positive cash flow based on their projections income and expenses. The appraiser is often asked to make these estimates. However, I have purchased investment property with nothing but closing costs out of pocket using hard money lenders. I've even borrowed more than the purchase price when the appraised value was much higher than the purchase price. I have also run across some credit unions that loaned 100% for borrowers who had a good track record with the credit union. It's all in the deal.
557685
Was that house ever your principal residence in the last 5 years, for 2 years or more?  You get a huge tax savings if it was.  You really need to talk to either a good real estate person or an attorney/CPA and find out the tax consequences.  If it was your principal residence, you do not pay capital gains on the profit you make on the house.  If it wasn't your principal residence for 2 of the last 5 years, you do have to pay profit on the sale.  It can be complicated, you need advice from someone in your area, not a bunch of strangers off the internet.  Good luck!
524966
Yeah unless the money Is delt under the table. Youll have to pay a tax on it, the ammount really depends on how much youll be reiciving
204872
How much money are you talking about? If you paid for the taxes a year in advance, then the borrower should of reimbursed you at the time of closing. If you escrowed your taxes then you should get a check back for the balance remaining on your escrows from the company holding your money.\nIf your talking about a sum of money that would match the cost of an attorney representing you at the closing, I would call it a wash and move forward. If the funds are more than that, you can always go to small claims court and file a suite again the new owners. If you win the case and they fail to pay you your money, you can then request for a judgment lien to be placed on their property.\n\nHope it works out for you.
113904
You don't have to own property to have a state tax lien. Basically what it means is he has unpaid state income taxes that are past due.  The state will put a "lien" on you which means they can take any federal tax return money you may get, or "attach" any property or income you have coming in the future until the past due taxes have been paid.  They can actually go and attach or garnish your wages until it's paid off too. Since you are his wife, they can garnish your wages too.  Employers tend to get upset with this stuff and in some states can even fire you for it.  I would contact your state tax collection people (you can look in the phone book under "(your state name)_______ State Income Tax")and find out exactly how much you owe.  Usually you can make an arrangement with them to pay it off in payments. As long as it's outstanding, you are getting hit with penalties and interest too, which can turn a relatively small amount into a HUGE debt in a very short time.   Trying to get anything on credit will be next to impossible also with that on your credit report.  The sooner you take care of it, the better!