Mortgage Note Accounting

[Alex Morstadt]

Hello CPAs! 

I am struggling to get a definitive answer to the question - are payments from a Performing Note passive investment income or are they ordinary income? I have seen it described as both - and lets face it, my PN income is way more passive then a Rental.

I would also ask, what are the tax consequences for an early payoff of the PN - or NPN for that matter? Again there is zero work done by the investor, in this example.

Also - Im looking for a great CPA in NOVA - DMV who is RE Small Business priced. 

Thanks in advance!