Help!! Land Contract w/ building owned less than 1 year

[James Lantis]

Hi guys, hoping some experienced people out there can assist.... I purchased two commercial condos late last year. I put my business in 1 of them and the other space I was going to rent out. I found a great tenant. However, they REALLY want to own and made me an offer to sell that I can't refuse. We got to talking and I think seller financing would work really great in this situation. We have come to a rough agreement on terms.

The problem is this property was part of a 1031 exchange. It also was purchased in August 2017, so if I sell it now I would have to pay short term capital gains. I obviously do not want to do that so I want to wait until at least August (if not much later) to "record" the gain.

My question is.... even if it is several years before the financing is paid off and the deed is transferred to the buyer, for accounting purposes --- when is the "gain on sale" actually recorded?

I have a hunch it is recorded immediately..... basically the asset is covered into a receivable and the gain is recorded. However, that is just in my accounting software. I assume the actual sale with the county would not be recorded until the deed is transferred, correct?

So for tax purposes, when and how much gain would I report during this process?

Ugh! Help!