Installment sale

[nalawson]

Just want to make sure I am reporting this correctly. Couple buys two properties, fixes them up, and them sells them. This couple is financing both of the sales and so would it be correct to set them up as installment sales? Contracts have been set up with monthly payments, interest rates etc.
Thanks.

[taxea]

correct taxea

[Burke]

Is this the first (and/or last) time they have/will do this? Be careful to treat as a business, sche C, if required. And the gain would be ord income, subj to SE tax. Check out "flipping houses" info.

[nalawson]

this is the first and probably the last, but I will keep that in mind. I have additional info that I need to include. After talking with taxpayer (actually sister-in-law interpreted the conversation as the taxpayer and wife can not speak english well), it seems that the brother of the tax payer bought the two homes for the t/p. The taxpayer then turned around fixed them up and sold them. Is there anything else I need to be looking at here. Since I am not doing the "brothers" return I don't have to think about gift return. The wife has w-2 wages also. I asked about other income and was told none. They qualify for EIC. Went thru the checklist for that with them. I think I covered all my bases. I will have them sign a engagement letter. Anything else?
The taxpayer and wife are listed as buyers of original homes and then the sellers.