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Add on... to sale of raw land

Forum|Forum|5 years ago
April 5, 2021
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Sold raw land a few years back and buyer is making payments.

This past year they added onto the loan additional acres. Still the same loan from the first sale just add on... how do I add this? it's a new sale but the new sale was just added onto the original loan.

I also want to add on the cost of the survey to this land as an expense of the sale. The land was not for sale when the first sale took place, did additional survey and sold this buyer more land.

Thank you!

Best answer by ToddL99

Enter this as a new installment sale, with its own sales price and cost basis (including the new survey).

It is a little extra work to set up a new amortization schedule for the additional purchase, but it is a new transaction in a new year.

You can still have a single method (loan document) of securing and collecting payment, but it was two transactions and reporting them separately is appropriate.

T

ToddL99Answer

Enter this as a new installment sale, with its own sales price and cost basis (including the new survey).

It is a little extra work to set up a new amortization schedule for the additional purchase, but it is a new transaction in a new year.

You can still have a single method (loan document) of securing and collecting payment, but it was two transactions and reporting them separately is appropriate.