I am owner financing a property, do I only have to claim the interest? What about the principle? Do I have to enter anything in the Rental income?

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I am owner financing a property, do I only have to claim the interest? What about the principle? Do I have to enter anything in the Rental income?

It depends. If you sold your property in an Installment Sale , and are receiving periodic payments from the buyer, you may be able to report a portion of your gain each year as you receive the payments.

You need to report the installment sale in the first year by filing Form 6252, and continue filing this form every year. Installment sale treatment isn't available if you sold the property at a loss.

Report your installment sale in TurboTax Premier under Less Common Income, Installment Sales . See the screenshot below.

Then you would report the portion of the payments that you received that represents the gain on the sale.The interest portion would still be reported as interest income.

You don't have to do this , however. You can elect to report the entire gain in the year you sold it, and then just report the interest payments each year.

You wouldn't report any rental income unless this property was rented by you in 2017.

See more information in IRS Publication 537.

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