When doing a Contract for Deed, when does the sale happen?

[Sarah Young]

We are trying to sell a house and have an interested buyer, but because it is an investment home for him, the interest rate is undesirable, and almost too high to make it worth it to him. He has plenty to put down, and we would want the difference between the sale price and the mortgage balance paid up front (~$80k), which we would profit. We have lived in this house 2/5 years, but as of August that will no longer be true, so time is of the essence. If we complete a Contract for Deed sale before August, and take the $80k profit now, will we be subject to the Capitol Gains tax? Even if we are still holding the mortgage? I don’t want this possible tax to come back to haunt us down the road.