Hello BP, I have a dilemma and would like your commentsAs an example, I have a house that I purchased and renovate for all in cost of $60,000, then sold it owner finance for $100,000 with $10,000 down and finance $90,000 for 25 years @10% interest, My old CPA took the down-payment $10,000 as ordinary income, and the gain of the $40,000 note was spread it out for the next 25years, so at the end of each year I only paid  what I earned My new CPA is telling me the $40,000 note has to be paid as ordinary income of 35% the first year and every year after just pay interest income, and the other method was wrong.

Hello @Fabrice EliacinAn ordinary purchase and sale agreement will do.Now it must allow you to assign it i.e it must include terminology that gives you"and/or assigns" the right to purchase the specified property and a contigency clause should you fail to find a buyerCAUTION/DISCLAIMER: do your homework to build a buyer's list and work hard to market that deal in the specified time.Also read up on articles and blog posts here on the particular strategy as many wholesalers have received bad name due to recklessness of others

It didn't have a business name on the letter or a logo or anything to indicate that we were anything but a couple of ordinary people looking to help out our family with some real estate deals.

This was so completely out of the ordinary, I had no idea it would move that fast.

Develop BiggerPockets into the most beloved brand in real estate, have it become a household name in America, and help millions of ordinary Americans feel comfortable taking advantage of the wealth building power of Real Estate.Thank you BiggerPockets!

2) I believe from the threads I've read so far I think we would be taxed at the ordinary income rate but just want to confirm.3) Here is the tricky part.

Although, I've been beating myself up a bit with my latest round of projects and then about a week ago I took a different viewpoint and considering that I had three big projects, basically all total rehabs including the one that needed the rebuilt basement, plus a few factors that were truly out of the ordinary-not unexpected, that ALWAYS happens, but a few real oddball items here, I guess for each one it didn't take me that long and of course in ANY business, NO ONE is ever 100%, there's always room to improve for anyone.

It is 27.5 SL depreciation that is allowed and therefore there will not be any depreciation recapture taxed at ordinary rates.

Not sure on the land contract or balloon payments.If you do not own a property for at least a year, your fear should be being taxed as "ordinary income" instead of capital gains.

When you hold property for cash flow and depreciation, its best to incur as many ordinary expenses as possible.