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Author: WallyJr One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121599  
Subject: Re: installment sale from sister Date: 3/6/2000 9:27 PM
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Older sister bought commercial lot 3/20/98 for 150K cost basis. Will sell to me soon after 3/20/2000 for 330k, i.e., 20k down and 310k on 10 yr installment @ 6% (or min implied interest)to spread out (cost ratio) her 180k l.t. capital gain - taxable gain encrease versus interest income decrease each year. Her only other income during this installment period is Soc Security.

After title to me, I have immediate non related buyer for 350K, my s.t. gain 20K, but have s.t. loss carryovers. See any problem with these two quick sales?


There is a problem, it's IRC sec 453. If you sell the property less then 2 years after buying it, your sister will have to recognize her remaining gain in the year you sell. You need to check out Form 6252 and its instructions. Especially Part III.
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