Does Seller Financing save the seller any taxes?

[Moshe Eisenberg]

Hi everyone. If a seller of a property does not plan on doing a 1031 exchange does seller financing save the seller from any capital gains taxes? Does the fact that the seller will essentially not be getting the full amount at closing but rather he'll be getting only about 25% of purchase plus monthly payments, does this help?

[Brandon Hall]

@Moshe Eisenberg No - seller financing simply spreads out the tax liability over a number of years instead of it all occurring at the time of the sale. For instance, if the seller financing is over a period of 10 years and there was a $100k profit on sale, the every year for ten years the seller will recognize $10k in cap gains.