Property transferred to Two Children by Parents in 2010

[Juanita]

Property transferred to 2 children in 2010 over 18 years old- Value Approx $75,000.00
1 child wants to buy other child interest out
What will be the tax issue for each one?
Would it be better taxwise for the child receiving the payments to take lump sum payment or installments?
What forms need to be used for both?
Property has appreciated in value since transfer.
Thanks

[Rapid Robert]

"Property transferred" How? Sale? Gift? Inheritance? This matters when determining the tax basis.

"1 child wants to buy other child interest out" At FMV? or below market?

"What will be the tax issue for each one?" Probably no immediate tax issue for the buyer. Seller will most likely have capital gain income, but we don't know the exact type of property, so it's hard to say what the rate might be (collectibles, etc).

"Would it be better taxwise for the child receiving the payments to take lump sum payment or installments?" You as the tax preparer will have to figure that one out by running the numbers both ways. Too many factors to determine without knowing everything about the seller's current and future tax situation. Further, since an installment sale is essentially a loan, how likely is it that the seller might have to repossess the property for future non-payment? There may be other legal (non-tax) issues involved.