Capital gains tax to be paid on sale of second home
Hello -- we are selling our AZ second home after 2 years of being used as a 4-5 month seasonal residence. Our primary residence is in CO. We file income taxes as Married Jointly, both over age 65 and 22% tax rate bracket. We purchased AZ house on 4/15/2021 for $290,000 and the selling price will be $380,000 on 4/14/2023. Cost basis will be $330,000 Including improvements and closing costs. We are providing Seller Financing to the Buyer. Terms are $100,000 down with monthly payments at 7% interest @ 20 year amort. and a 3 year balloon payment. My question is how will the capital gains be figured when the first year taxes (2023) includes the $100,000 down payment and the 3rd year taxes (2026) includes the $280,000 balloon payment ? Thank You. Steve and Teresa Zook
