Zillow Advice: For Sale by Owner - If I sell a real estate contract, is there a capital gains tax? http://www.zillow.com/advice-thread/If-I-sell-a-real-estate-contract-is-there-a-capital-gains-tax/509386/ Zillow Advice | Zillow Real Estate Mia culpa! &nbsp;I shouldn't ... http://www.zillow.com/advice-thread/If-I-sell-a-real-estate-contract-is-there-a-capital-gains-tax/509386/ Mia culpa! &nbsp;I shouldn't have used the term "tenants". &nbsp;They are the purchasers of the house. &nbsp;They've lived in it for a little over three years now. I sold it to them via real estate contract, and receive payments through an escrow company. &nbsp;Since moving in they have begun remodeling the home, but now don't have the funds to complete it. &nbsp;They are behind on payments and I could take it back at any time. &nbsp;I thought about either helping them remodel it, so they could sell it, and we could all get paid; or selling the contract and licking my wounds. &nbsp;Any advice is welcome. Mon, 02 Sep 2013 18:55:00 GMT http://www.zillow.com/advice-thread/If-I-sell-a-real-estate-contract-is-there-a-capital-gains-tax/509386/ 2013-09-02T18:55:00Z If you have "tenants", you've ... http://www.zillow.com/advice-thread/If-I-sell-a-real-estate-contract-is-there-a-capital-gains-tax/509386/ If you have "tenants", you've may not sold your home yet.&nbsp; Are you owner financing or is it "rent to own"?&nbsp; &nbsp;&nbsp; If you had it as your primary residence for 2 of last five years you may be eligible for the capital gains exclusion for your primary residence ($250k single/$500 k married).&nbsp;&nbsp; <br/> Sat, 31 Aug 2013 13:56:00 GMT http://www.zillow.com/advice-thread/If-I-sell-a-real-estate-contract-is-there-a-capital-gains-tax/509386/ 2013-08-31T13:56:00Z Curious, but would the 2 ... http://www.zillow.com/advice-thread/If-I-sell-a-real-estate-contract-is-there-a-capital-gains-tax/509386/ Curious, but would the 2 of last 5 years exclusion rule not apply since he lived in the house as his principal residence 2 of the last 5 years?<br/><br/> Sat, 31 Aug 2013 13:23:00 GMT http://www.zillow.com/advice-thread/If-I-sell-a-real-estate-contract-is-there-a-capital-gains-tax/509386/ 2013-08-31T13:23:00Z Yes there would be. &nbsp;My ... http://www.zillow.com/advice-thread/If-I-sell-a-real-estate-contract-is-there-a-capital-gains-tax/509386/ Yes there would be. &nbsp;My background is in accounting, I used to work with CPAs. &nbsp;Uncle Sam is going to get his chunk no matter what. &nbsp;The day you rented the house out made it a capital asset (business property). &nbsp;And if you are to sell any part of that, then you will face capital gains taxes. &nbsp;And depending where you live it can be substantial. &nbsp;For example, in California between IRS and state capital gains taxes you'll pay over 20%. &nbsp;That's why you really need to track as many expenses as possible to reduce that!&nbsp; Sat, 31 Aug 2013 09:33:00 GMT http://www.zillow.com/advice-thread/If-I-sell-a-real-estate-contract-is-there-a-capital-gains-tax/509386/ 2013-08-31T09:33:00Z