• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Interest payments

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

SSD53NJ

Member
What is the name of your state? NJ
If I hold the mortgage on a 100K home that I inherit & sell for appraised value how much of my yearly payments will be taxable income & how do i figure this? I want to know this before hand to determine if i want to sell this way.
 


LindaP777

Senior Member
What is the name of your state? NJ
If I hold the mortgage on a 100K home that I inherit & sell for appraised value how much of my yearly payments will be taxable income & how do i figure this? I want to know this before hand to determine if i want to sell this way.
I'm confused. I can't determine if you are collecting interest or paying interest? If you pay interest, the interest is tax deductible. If you receive interest from a loan, you'll have to report interest as income and pay taxes on that income. To calculate it, you can use;
http://ray.met.fsu.edu/~bret/amortize.html
 

SSD53NJ

Member
If a party buys my property they can either get their own mortgage or I can hold the mortgage for them & get monthly payments, is that correct? (I may be using the wrong terms here if so please correct me)
Now if I "hold the mortgage" instead of receiving payment in one lump sum, I would be getting monthly interest payments, is that correct?
I want to know before I go into any deal like this how much of that monthly (interest) payment is going to be & if it all has is reported as income by me at the end of the year on my income tax return. That's assuming I sell the property for the FMV when I inherited it, in other words, no capitial gains.
Am I making myself clear?
 

Ozark_Sophist

Senior Member
You can use a free mortgage amortization calculator (google) to determine how much principle/interest for each month/year. Why would you want to carry the note? (risks, liabilies, etc)
 

LindaP777

Senior Member
Ozark is right! Why would you carry the mortgage?
Do the buyers/tenants have bad credit? Do a "lease with option to purchase". If they fail to live up to the terms, "evicting" is much easier than "foreclosing".
Do you want the income every month for 30 years? renting will also give you income. Again, think about the process or foreclosure.
Are you trying to avoid capital gains on the sale? What exactly are you trying to accomplish?
 

SSD53NJ

Member
If i carry the note, what risk? If they can't make payments the property reverts back to the owner, right? If I simply rent the house out, all the rent has to be reported as income & if they destroy the property then what do I have? How expensive is renters insurance protection?
 

SSD53NJ

Member
I mean it shouldn't be that difficult to get back your property if mortgage payments aren't made, should it?
What advantage is there to renting? it's more difficult to get someone out for not paying the rent, not to mention if they destroy your property, etc.
 

moburkes

Senior Member
I mean it shouldn't be that difficult to get back your property if mortgage payments aren't made, should it?
What advantage is there to renting? it's more difficult to get someone out for not paying the rent, not to mention if they destroy your property, etc.
Yes, it absolutely is difficult. It would cost several thousand dollars, and can take up to 3 years.


I've decided, though, like in the last thread, that I cannot continue to answer your questions. You need to go to the library, or use google, and do some research on your own.
 

LindaP777

Senior Member
One last comment from me;
Do a "lease with option to purchase". If they fail to live up to the terms, "evicting" is much easier than "foreclosing".
I can handle an eviction. I can not do my own foreclosure! For a court to uphold a foreclosure, it has to go to sheriff's sale, it does not automatically go back to the owner. You may not get it at all!
You can always hire an attorney, ask your questions and get him to draw up any necessary, legal documents that you need.
 
Last edited:

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top