I have a second property (home) which, due to tax law changes, I will now owe income tax on gains if I sell.
But how does this work if I finance the sale? Suppose the hypothetical sale price was $100k and I paid $50k and any profits will be taxed in the 25% tax bracket. I have made all these number up with nice round figures to make the math easy.
Suppose that I finance the buyer in a private sale, suppose I ask for $10k down and $426/month for 30 years. Do I now I owe taxes on $50k, or $12.5k which I somehow have to immediately (or by the next tax return) pay? Or could I instead somehow allocate those gains on a per year basis (and if so, how?)
Does it make a difference in how much I ask for down? Suppose I don't ask for any money down, now I have no immediate income with which to pay any tax.
Does it make a difference whether the buyer is related to me or not? What if they are a family member (as defined by IRS Pub. 527)?
Does it make a difference if I sell it below market value? For instance, suppose I sell it at $14,000 under market value and gift the remainder to the buyer?
How would I even report this on my taxes?