Client is holding a mortgage on a home. There was no gain on the sale and the only income is from the interest. He gets an offer to buy the mortgage every couple of months or so. Are there any tax consequences involved if he decides to sell the mortgage, assuming no gain?

Reply to this post | Go to top

No taxable event. The original sale was not taxable the sale of the mortgage is not also

Reply to this post | Go to top

If the mortgage sells for a price other than the amount due, i.e. at a premium or discount there would be a gain or loss.

If the mortgage is sold at face value there would be a break-even.

I don't think the exclusion for the home would affect the mortgage receivable since it is a different asset.

Reply to this post | Go to top