I sold a property with a wrap and I hold escrow so how do I show the owners their year end payment breakdown

[Wade G.]

I sold one of my rentals with a mortgage wrap last year. I hold escrow for the buyers. I am certain that I need to provide the owners with an end of year statement showing how much they paid toward the loan amount, interest, and taxes for the year. Seems like I also need to furnish the IRS with some sort of statement too. My plan was to have an attorney do this for me the first year so I could see how its done. Thought I would ask here before I make an appointment to spend some money with an attorney.

[Wayne Brooks]

Loan amounts, taken or given, have no bearing in calculating capital gain profits. It's cost basis, after depreciation/cap improvements verses net sales proceeds(principal), with interest being calculated/taxed separately. Since you received the full price within one year, it's easier as there's no calculation necessary for return of basis/verses gain for the monthly principal payments. Seems like you need an accountant better versed in RE. Not sure I said that exactly right, maybe it's as clear as mud.

@Steven Hamilton II