Help with a tax question..................selling my apartments

[Joel Owens]

Okay looking at selling my 20 unit apartment building I bought last July. Currently own on a wrap.

I hold title.The reason I am selling is I have some other big projects I am working on.

There is a very well qualified buyer who has over a million in cash.They are going to basically take over my wrap position and the seller who owner financed me agreed.

The way I was going to structure this is the buyer wants 3 more years on the note at 5% then cash out.I would get note balance amended as well to wipe out my cash credit from the seller that I had.Then once changes are in place simply sell to the buyer where I assign my rights and title to the property for a fee.

The money I get will be substantial 6 figures.I will not have owned the property a year yet so whether I pay commission to my brokerage or have the corp for the apartment show a gain I think it will be taxed as ordinary income.

The buyer is fine with this but was wondering if it should be structured to where:

"I am not sure the best way to structure it, but I think the down payment needs to be part of the purchase price for tax/depreciation/refinance reasons. Why is it easier to make it a fee instead of a down payment?"

I was thinking the way I had setup would be simplest.

Suggestions???