<div dir="ltr">For the purpose of the exclusion of gain from the sale of taxpayers principal residence, there is nothing wrong with installment sales. If the taxpayer later repossesses the residence, there are rules for recalculating the gain. If the transaction were fraudulent there could be other rules involved.<div><br></div><div>Marvin Benson</div></div><br><div class="gmail_quote"><div dir="ltr" class="gmail_attr">On Mon, May 18, 2020 at 12:34 PM David Daniel <<a href="mailto:ddaniel@demcolaw.com">ddaniel@demcolaw.com</a>> wrote:<br></div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex"><div dir="ltr"><div class="gmail_default" style="font-family:verdana,sans-serif;font-size:small;color:rgb(7,55,99)">Listmates,</div><div class="gmail_default" style="font-family:verdana,sans-serif;font-size:small;color:rgb(7,55,99)"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif;font-size:small;color:rgb(7,55,99)">I certainly am not a tax advisor so I may have my terminology wrong here, but here goes:</div><div class="gmail_default" style="font-family:verdana,sans-serif;font-size:small;color:rgb(7,55,99)"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif;font-size:small;color:rgb(7,55,99)">Client advises that he and his spouse need to sell their property within a month from now to capture the $500k exclusion from capital gains on sale of personal residence. Client wants to proceed with a seller-financing transaction to a buyer who will pay little-to-nothing down. Can Client capture the full benefit of the $500k exclusion on such a transaction even if no (or very little) cash gain is recognized at the closing? Does it make a difference if it is Note/DOT vs. REK? </div><div class="gmail_default" style="font-family:verdana,sans-serif;font-size:small;color:rgb(7,55,99)"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif;font-size:small;color:rgb(7,55,99)">Seems to me the exclusion would only apply to gain actually recognized prior to the deadline (i.e. at closing), because to allow otherwise would seem to create a loophole for Client to capture the benefit by simply transferring the property to an insider (who could then subsequently sell the property to a third party, without concern over the deadline, and then agree (on the side) to a profit sharing arrangement with the original owner/Client). </div><div class="gmail_default" style="font-family:verdana,sans-serif;font-size:small;color:rgb(7,55,99)"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif;font-size:small;color:rgb(7,55,99)">Hope that makes sense. Any insights? Thanks in advance.</div><div class="gmail_default" style="font-family:verdana,sans-serif;font-size:small;color:rgb(7,55,99)"><br></div><div><div dir="ltr"><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><div><div dir="ltr"><p class="MsoNormal" style="background-image:initial;background-position:initial;background-repeat:initial"><b><font face="verdana, sans-serif" color="#073763"><br></font></b></p><p class="MsoNormal" style="background-image:initial;background-position:initial;background-repeat:initial"><b><span style="font-size:11pt;font-family:Garamond,serif;color:rgb(7,55,99)">David C. Daniel</span></b><span style="font-size:11pt;font-family:Garamond,serif;color:rgb(7,55,99)">, Attorney</span><br></p><p class="MsoNormal" style="background-image:initial;background-position:initial;background-repeat:initial"><span style="font-size:11pt;font-family:Garamond,serif;color:rgb(7,55,99)">
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