How do report income?

[tlpadil 0]

Not sure how we should report income. Let me give two examples.

 

1) Did a SLO with a property.

Seller price is $100,000 TB price is $130,000 The difference is $30,000. Where do we report it?

 

2) Same senario except the Seller Deeded the property to us. How does this change the reporting?

 

tomas

[Dave T 0]

As far as the IRS is concerned, the sale profit in both scenarios get the same tax treatment.

 

Use Schedule C (1040) and Schedule SE (1040), assuming you did this in your own name. Reported in the tax year in which the T/B exercises the option to purchase.

[tlpadil 0]

As far as the IRS is concerned, the sale profit in both scenarios get the same tax treatment.

 

Use Schedule C (1040) and Schedule SE (1040), assuming you did this in your own name. Reported in the tax year in which the T/B exercises the option to purchase.

 

Dave T, is there a way I could talk to you about this?

 

tomas

[Dave T 0]

Sure, just post your questions in the forum.

[apbowman 0]

As far as the IRS is concerned, the sale profit in both scenarios get the same tax treatment.

 

Use Schedule C (1040) and Schedule SE (1040), assuming you did this in your own name. Reported in the tax year in which the T/B exercises the option to purchase.

 

Now what if you used your LLC name? What forms would you fill out?

[phil43 0]

As far as the IRS is concerned, the sale profit in both scenarios get the same tax treatment.

 

Use Schedule C (1040) and Schedule SE (1040), assuming you did this in your own name. Reported in the tax year in which the T/B exercises the option to purchase.

 

Dave,

 

So, if you had a T/B in a 2 yr lease you wouldn't have to report the option money until two years after receiving it?

 

Phil

[Dave T 0]

Now what if you used your LLC name? What forms would you fill out?

 

How is the LLC taxed? Assuming the LLC is a single member, disregarded entity, use Schedule C and Schedule SE.

[Dave T 0]

So, if you had a T/B in a 2 yr lease you wouldn't have to report the option money until two years after receiving it?

 

As long as you remain a principle in the deal, option money is not taxable income until either the option expires, or, the option is exercised.