Essentially, the partnership acted as the loaner, where the buyer repaid the loan to the partnership, with part of the payment going towards principle and the other part to interest. So is that interest considered ordinary income, even though the partnership only had one other similar arrangement, or is this portfolio income? I should mention that the partnership had no other income source other than these two mortgage sales. I should also mention that the sale occurred ten years ago, and was not booked as an installment sale.
BTW, this makes a big difference on the individual partners' tax returns, so I'm hoping for a good answer.
2007-02-12 06:30:31 · 1 answers · asked by Doctor Biobrain 3 in Business & Finance ➔ Taxes ➔ United States
Since the mortgages are portfolio asset types the interest income should be portfolio.
2007-02-12 06:52:00 · answer #1 · answered by spicertax 5 · 0⤊ 0⤋