Interest income is taxed at the same rate as ordinary income.

check with your CPA depending on your basis to go from a property you can 1031 to ordinary income tax it might not be worth the extra time and risk involved.

If seller does qualify for the primary residence exemption she will not pay tax on the capital gain portion of the sale but the interest would be taxed as ordinary income.

Either pay in one lump sum or in four equal payments (04/18/22, 06/15/22, 09/15/22, 01/17/23).a  $78,255 Total Tax =  $58,427.45 ($28,549 Long Term Capital Gain x 20% tax rate + $351,451 Long Term Capital Gain x 15% tax rate) + $19,827.5 ($100,000 Unrecaptured Sec 1250 Gain +$ 25,000 social security benefits x 85% - $12,950 standard deduction subject to ordinary income tax brackets)b.

Also, in the letter that the company issued (indicating that no tank was found), they state that they cannot scan in areas with "excessive vegetation" and/or patios or decks. 

Ergo its highly doubtful they report.. what they can do though is issue you a 1099C which will be ordinary income to you.. and create a mess with the IRS.they could sue you for a judgment.If they go the DIL route make sure you have an attorney negotiate out the fact that no deficieancy can be done and that they will not issue the 1099C against you.

If I didn't redo the back deck than I would definitely end up needing to build stairs out the back door and redo the landscaping and/or build a patio (also typical for this neighborhood)So it sounds like there might be a few thousand dollars on the last one I could "do without" which would allow me to make a stronger offer if I needed to.

The downstairs unit had a concrete below grade patio under the deck.

A new tenant decided to build a 300 sf patio there and we discovered that they did not apply for a permit.

Roofs,siding,windows, doors, flooring, appliances, paint, railings, patios, lighting, heating elements, water tanks, bathroom fixtures, kitchen cabinets, and counters.