Hard Money Lender - longer term horizon - Capital Gains

[Damon J.]

I am lending money to a developer and the agreement is a lump sum payment based on participation of profit. As I am currently on the deed my repayment will be noted as Interest Income and received on a 1099.

Does it matter if I am not paid until after one year?

Is there a more advantageous way to lend the money and have gains be treated as capital gains versus ordinary income.

My goal is to continue to invest with this developer for years to come and roll over the funds, but not sure where I should start to come up with a better solution than ordinary income via a 1099.