Seller Finance Payoff Tax Question

[Christian Ehlers]

Hey BP, been learning a lot about seller finance, subject to, and all that good stuff.

Just want to confirm something here.

When seller financing vs traditional sale, one of the perks to the seller is that they don’t take the full purchase price as their gain in year 1, so they save a lot on taxes by taking their payment over time.

So if for example I buy a property on seller financing, and then sell it or refinance after 5 years, the original seller would be fully paid off, so they would then have to pay taxes on all of that gain at that time correct?