Planning Briefs
Avoid This Installment Sale Trap
Published Tuesday, October 24, 2017 at: 7:00 AM EDT
One tried-and-true method for reducing taxes on a sale of real estate is to use installment sale reporting of payments that will extend over two or more tax years. If you meet all of the requirements, you're taxed on the installments as you receive them, avoiding the higher cost of being taxed on the full amount of your profit all at once. That may not only defer some of your tax liability; you may also pay less overall.But installment sale treatment isn't always a slam dunk. Your tax benefits, could be reduced if you sell property to a relative or...
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