Seller financed my primary residence after a few short months.

Seller financed my primary residence after a few short months.

Newton, NC · Member since 2018 · 2 posts · 0 votes

Hello. I bought a home thinking I could find some help to get the many projects done around here, but instead I ended up with a mess and being ripped off. This was my primary residence and I sold the home to a friend at a very low interest rate, but a higher sales price than I would have been able to get with the house all torn up. $220,000 SP, $195,000 initial purchase price, $5,000 down. I'm not an investor and don't care to be. I'm disabled due to a serious heart condition and stress is a big nono for me. As an installment sale for 2018, I will be taxed on the $5,000 and the interest earned, correct? With short term gains in mind, I am concerned about the tax consequences. Can someone please help me see the big picture here? Telling me what forms I will need to use for reporting will also be very helpful. My taxable income last year was just $700. I really need to retain some of this money. Thank you in advance.

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  • Real Estate Technology · San Francisco, CA · Member since 2016 · 262 posts · 265 votes
    8y

    @Devrie M.

    Devrie: I'm sure others can speak with more authority on this, but my understanding is that you won't have to worry about short term capital gains taxes on the sale (or installment sale) of this property because it was your personal residence, and your sale price is below the IRS threshold for taxable gains on a personal residence.

    Best of luck!

  • Newton, NC · Member since 2018 · 2 posts · 0 votes
    8y

    Hi Tyler. I'm still concerned since I was only able to stay there a few months.

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