Tax advantages of Seller financing to relative?

[Thomas Hickey]

Hi Bigger pocketers,

Have a question about a multifamily a relative of mine is considering selling. I'm trying to buy it directly off of him with seller financing. Tax wise would it be better for him if I were to pay him $2,000/mo. Vs getting one lump sum of $400,000. Would he pay less in taxes/ be able to shelter the tax liability through a monthly payment. He owns the house outright. If not are there other ways we could structure the deal to limit his tax liability, he does not plan on buying more property so an exchange is not an option. Thanks for any light you could shed on the situation.

Tom 

[Cameron Skinner]

Eveyones individual tax situation is different, but usually if some one has owned an investment property for a long time and has a low basis in the property they can elect an "installment sale" on their tax return for a property they sale with seller fiancing this allows them to take the income on the sale over the term of loan, as not to kick them up in higher tax bracket.