Does Captial Gains Tax prevent sellers from wanting to use seller financing?
Thank you to everyone who takes the time to read these posts and share their experience.
My question is what would motivate a seller to use seller financing to sell their primary residence using seller financing when it would generally forfeit their exemption from paying capital gains tax? Why especially would a seller agree to a balloon payment after just 5 years since that would give them almost no time to spread out that tax over time?
The reason I ask is that I am interested in using seller financing as a buyer to purchase property and I want to be up front with the seller about the capital gains tax they would owe, but I don't see how I could make the deal look favorable to them.