Article Date:
June 2014


Word Count:
1507

 

 

How to Lease-Option the Sale of Your Home or Investment House


Question

 

My home has been on the market for about six months. I have had no serious offers.

 

I do have one interested person who wants to know if I will give him a two-year lease with an option to buy. I’m still looking into this, but before I commit to anything, can you let me know if there are tax issues I need to worry about?

 

Answer

 

You don’t need to worry.

 

In the right circumstances, a lease-option could work very well for you because it gives you three sources of income:

 

1.

Income from the granting of the option

2.

Income from the rent

3.

Income from the sale of the home (if the optionee-tenant decides to exercise the option to buy)

 

This makes your tax situation juicier than a traditional sale, because each type of income has a different tax treatment.

 

How the Option Works

 

An option is a contract to keep an offer open for a set period of time. ... Log in to view full article.

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