Land contract - rent to own

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  • JT2307
    Senior Member
    • Jan 2009
    • 105
    #16
    Since the contract reads as 700 rent and 300 towards down payment - I am going to agree with Kathyc2's suggestion of reporting rental income and keeping the $300 in escrow reporting it when the three years is up and if the purchaser fails to make payments and the contract becomes null and void the seller will report the funds held in escrow at that time.

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      • TAXNJ
        Senior Member
        • Jan 2007
        • 2106
        #17
        Originally posted by Lion
        Is it interest only with a balloon payment at the end for principal? But you said interest is NOT specified in the documents. Why do lawyers do things like this without talking to the tax preparer?!
        Happens when clients do not consult with a Tax Attorney.
        Always cite your source for support to defend your opinion

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          • Burke
            Senior Member
            • Jan 2008
            • 7068
            #18
            Originally posted by Lion
            . Why do lawyers do things like this without talking to the tax preparer?!
            Because they do not usually know the first thing about tax ramifications. The TP in this case should educate him/her so he doesn't do this in the future.

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