Deposit on Real Estate -includable in income?

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  • equinecpa
    Senior Member
    • Mar 2006
    • 578
    #1

    Deposit on Real Estate -includable in income?

    I have a client who has a pending sale on a parcel of real estate. They have received a deposit of $75,000. The purchaser needs an extension of their contract into 2013. Can my client include the $75,000 in income in 2012 or do they have to wait until 2013 when the contract is closed? The sale does have contingencies.
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    • ChEAr$
      Senior Member
      • Dec 2005
      • 3872
      #2
      Originally posted by equinecpa
      I have a client who has a pending sale on a parcel of real estate. They have received a deposit of $75,000. The purchaser needs an extension of their contract into 2013. Can my client include the $75,000 in income in 2012 or do they have to wait until 2013 when the contract is closed? The sale does have contingencies.
      It's income only when sale (settlement) takes place. (Sounds like a rich guy thinking his marginal rate will be increased next year. (grin))
      ChEAr$,
      Harlan Lunsford, EA n LA

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        • equinecpa
          Senior Member
          • Mar 2006
          • 578
          #3
          Actually not a rich person at all but they are selling their farm to a developer and have capital gains. Ughh. Deal was to have closed in 2012 but doesn't look like all the zoning approvals will happen before 2013.

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            • ChEAr$
              Senior Member
              • Dec 2005
              • 3872
              #4
              Originally posted by equinecpa
              Actually not a rich person at all but they are selling their farm to a developer and have capital gains. Ughh. Deal was to have closed in 2012 but doesn't look like all the zoning approvals will happen before 2013.
              Well SURELY our congress (the best that money can buy; Rogers) will extend favorable capital gains tax rates.
              Uh. I mean.. they WILL, won't they?
              ChEAr$,
              Harlan Lunsford, EA n LA

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