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Sale of farm and note at the bank

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    Sale of farm and note at the bank

    Farmer sold his farm. he had a note at the bank for $100,000. buyer took over the note at the bank, and farmer holds a second mortgage with a $150,000 note. Installment sale - would the note at the bank be the down payment? The buyer has not paid off the note, is making payments to the bank. Does that make a difference?

    #2
    If the buyer assumed the existing bank loan, and the bank released the seller from liability on that loan, then the balance of that bank loan constitutes a payment received in the year of sale. Add to that any other payments the seller received from the buyer in the same year, if any (i.e., down payment and principal portion of monthly payments), and that is he total received in the YoS.
    Roland Slugg
    "I do what I can."

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