Tax Tips for Mutual Fund Shares

"Hi, I'm Tom Choisnet, enrolled agent. I'm going to talk a little bit now about installment sales. This is a good tool for reporting the capital gain on sale of real estate among other things. It's most helpful there. If you have a piece of real estate that you want to sell, and there's a heavy capital gain in it, if you take paper back, as we like to call it, that is be the first mortgagee on you own sale, you need only report the increment of gain on each principal payment received. That is the down payment, the principal portion on the mortgage payment. This makes the payment of the taxes on large capital gains of that nature palatable and very business like. They work well. I've seen it used effectively many times over the years. So, when you sell off some real estate, take a little look at carrying your own paper and reporting on the installment method. A little comment about installment sale, remember to pick them up each year. It's real easy to overlook them. You have to report the interest on the note and the little bit of gain that will be additionally reported on Form 6252. Your tax professional will help you on that one. Thank you!"