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Updated almost 8 years ago,
Seller in seller finance deal worries about capital gains
The situation is as such,
Seller owes house free and clear
Seller is offering me 100% seller financing
I'm going through an attorney to get the mortgage note and all paperwork together.
Will the seller be responsible for paying capital gains on the property in the tax year of closing???? Or when I go to refinance the property and he actually gets the funds?
It's hard for me to believe that someone will be responsible for paying capital gains / taxes on money that they don't have in hand. Once the seller gets the funds (I.e I refinance him out) and he gets the money then he can get taxed on it. Up to that point the only taxable funds would be the income from my monthly payments?