Tax guys must actually be .... doing taxes today.But I'd say that your pre-tax 401-K contribution is taken directly out of your taxable wages and doesn't show up in your W2 income.

The Federal Trade Commission has plenty of warnings about this.

Note: there are several federal and state laws that you have to abide by in order to properly execute an owner finance wrap like this.

On top of that you can expense the labor cost from profit to reduce taxable income.

I know its not taxable income I just looking to clanup my P&L.

Thats a federal agency you're dealing with.If you do it on one, you might be able to at least argue that your intent was to move in.

NEW YORK (CNNMoney) -- Flippers, the real estate investors who buy homes on the cheap and quickly resell them at a profit, just got a reprieve from the Federal Housing Administration.In an effort to help stabilize housing prices and unload some of the foreclosures that are flooding low-income communities, the mortgage insurer extended a waiver of its anti-flipping regulations through 2012.The waiver, which was initially issued in 2010 and set to expire this month, suspends regulations that prohibit the agency from insuring mortgages used to purchase homes that are bought and resold in less than 90 days."

They will be now be charged according to their tax bracket federal taxes on the amount that the bank forgives.

Directly from Fannie Mae's (Federal National Mortgage Association) latest Form 10-Q is this: "Neighborhood stabilization is a core principle in our approach to managing our REO inventory.

At best as noted above they are not that effective, sounds like at the federal level and consequently state level ambiguous and vague, “unknown”.