Client tried to forclose on an installment sale and the buyer filed Bankruptcy, Bankruptcy has been discharged now so where and how do you report this. Client did not receive any payments in 2009 and only interest in the year of sale (2008), which was reported that year. Any help would be appreicated. I see nothing about this in Pub 537 Thanks.
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He DID get the property back, right?Originally posted by mths View PostChEAr$,
Harlan Lunsford, EA n LA -
Installment Sale
No he has not got it back. Now it goes back to foreclosure status. This is what his attorney has told him. In fact he may not get it back at all.Comment
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Installment sale
Does anyone out there have any suggestions for this situation? None of the principle was ever collected only interest for 2008 and that was claimed. I have checked every publication I can find on this and get no answers. Any comments or suggestions will be greatly appreciated.....help..Comment
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Gain
when you get it back. When ownership gets back to you, you get restored to the exact position you were in just prior to the sale. Basiclly, that means what ever you got in noninterest payments is entirely income and your back to your basis. You recapture as income the gross profit % - 100% you used in recording the gain. Your basis is exactly what it was when you sold. Your cash basis taxpayer you do not have a loss yet, unless you are paying real estate taxes and interest, but all those are probably investment related expenses. The contract for deed is a capital asset.Comment
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Thank You!Comment
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