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Collecting It Later |
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Edith Lank: In 2003 I sold my home that I had lived in many years to my grandson for $100,000, and I hold the mortgage. He is now ready to pay off the mortgage of about $70,000. I have paid income tax on the interest from the mortgage. Will I have to pay tax on the $70,000 or is it all part of homeselling? |
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As you realize, the interest you receive is subject to income tax. Profit you collect, though, is covered by the homesellers tax exclusion, whether you receive the money at the time of sale or in later years. |
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Edith
Originally published on June 18, 2005 |
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