DEAR BOB: I enjoyed your recent article about the nation's best real estate lender (the home seller). It makes sense from the home buyer's view. However, what about the home seller? If the seller has a large profit, I know up to $500,000 is tax-free for a married couple, but what's the use of that gain if they can't take advantage of other investment opportunities? Do they receive any tax benefit for carrying back the mortgage for their home buyer? They still have to pay income tax on the interest income, don't they? --Karen M. DEAR KAREN: Yes, interest income is always taxed as ordinary income. But the big advantage for a home seller who carries back a mortgage for their buyer is the tax-free home sales proceeds (up to $500,000 for a qualified married couple; up to $250,000 for a single h...
Get Inman via Facebook Messenger
Our top headlines delivered once a day.