Originally posted by ProbateGeek
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Originally posted by Zee View PostHmmm....would that ordinary loss to the purchaser be deductible? Let's assume the buyer was buying equipment for their business, or a rental property. How can they have a deductible loss on property they never owned? Or, is it considered an investment loss? If so, what about a personal residence?
Terry
Nothing is more admirable than the fortitude with which millionaires tolerate the disadvantages of their wealth. Nero Wolfe in The Red Box, by Rex Stout (Farrar & Rinehart, Inc., 1937).
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Isn't it plain vanilla ordinary income?
WOW - I thought this was a simple question until I started reading the answers.
My spin is the recipient of the income has ordinary income, pure and simple. (I'll let others decide if a business could deduct the same payment.)
In the recent past I had a client who received $50k each of several years running as an option to buy his property. Each year the option was unexercised, and each year the income was reported as ordinary income. Eventually they DID excercise the option and bought the property, and all funds (for that year only) went into the total sales prices, Sch D, etc.
I hope I have not been having another Rip Van Winkle moment?
FE
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