Tax Implications of 6+ Land Contracts

[Scott M.]

Hey all -

As I understand it one person or company can complete 5 land contracts and only be taxed on the actual payments (installments of say $1,000 / month).

However - if one person or company does 6 or more land contracts (not in a year but total) you are taxed on the face value of the land contract the year the land contract is created. (say $100K).

From a legal point of view I have heard that 50% of the time the IRS wins cases and loses 50% of the time when they audit people / go to court / with those who do more then 6 but do not claim the face value as income in the year the land contract was created.

I have also heard there are ways around this rule - but nothing concrete yet - anyone here have any knowledge on this topic?