sjin
Level 1
12-07-2019
12:51 AM
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A client sold a house to a buyer as a seller-financed mortgage. However, the client still had a mortgage before selling. So the client took out an unsecured loan from a bank in order to payoff the mortgage first. Then, had sold it to the buyer as a seller-financed mortgage. So, the question is..... How do you treat the interest income and can you deduct the interest on the unsecured loan as an expense?
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sjrcpa
Level 15
12-07-2019
12:51 AM
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the interest income is taxabke the same as interest fom a bank, but Schedule B requires the payer's info.
Possibly the interest he pays on the unsecured loan is investment interest.
The more I know the more I don’t know.
