First sorry for the long post....
When I sold my personal residence on land contract some years ago (around 2005 I think it was), it qualified for the section 121 cap gains exclusion. The tenant/owners gave me a down payment and paid me for several years. They then decided they were no longer interested in owning it long term and walked away. So, I took possession back and have been performing a lot of fix-up/updating/refreshing and hope to sell it soon.

Round figures....Originally bought the home for myself for around $100,000. Sold it to them for a land contract sales price of $150,000. They made amortizing payments to me and paid a total of around $15,000 towards the principal.

Again, the gain on sale of $150,000 minus my original $100,000 purchase price would be ignored vis a vis sec 121. My thinking is that when I took the property back, the land contract price of $150,000 would serve as my new cost.

Not sure if it's relevant but I will note that I never put this property back into service so there was never any depreciation on it because it was never rented or ready to rent. It's been vacant for a couple of years and I'm now finishing up the rehab process.

A couple questions. When I do sell it, what tax forms should I use to report it? And, let's say I sell for $165,000 and let's say I've put $10,000 back into it --- how do I incorporate these repair/refresh costs.

Thanks all

When I sold my personal residence on land contract some years ago (around 2005 I think it was), it qualified for the section 121 cap gains exclusion. The tenant/owners gave me a down payment and paid me for several years. They then decided they were no longer interested in owning it long term and walked away. So, I took possession back and have been performing a lot of fix-up/updating/refreshing and hope to sell it soon.

Round figures....Originally bought the home for myself for around $100,000. Sold it to them for a land contract sales price of $150,000. They made amortizing payments to me and paid a total of around $15,000 towards the principal.
Again, the gain on sale of $150,000 minus my original $100,000 purchase price would be ignored vis a vis sec 121. My thinking is that when I took the property back, the land contract price of $150,000 would serve as my new cost.=====>Correct;it was an installment sale that is a sale of property where you receive at least one payment after the tax year of the sale.;so the sale must be reported to the IRS using the installment method unless you opt out of using this method by filing an election with the IRS. Aslongas you realize a gain on an installment sale, you need to report part of the gain when you receive each payment.



Not sure if it's relevant but I will note that I never put this property back into service so there was never any depreciation on it because it was never rented or ready to rent. It's been vacant for a couple of years and I'm now finishing up the rehab process.====>>UNLESS you put the pty into rental svc, you donot need to recapture sec 1250 recapture taxed as ordinary income taxed a t 25%.

A couple questions. When I do sell it, what tax forms should I use to report it?====>> Real estate transactions, including land contracts that are not excluded by capital gains tax laws must be reported to the IRS on Form 1099-S

And, let's say I sell for $165,000 and let's say I've put $10,000 back into it --- how do I incorporate these repair/refresh costs.=====> You are generally not allowed to deduct the cost of repairing your home.; pne way to deduct the cost of repairs is if you rent the home to tenants. Since the home is considered an investment property

Agree with previous comments but would also add that if the $10K you put back into the property is a capital improvement (or perhaps a portion of the $10K), it will get added to basis, thus reducing your potential cap gain once it sells.