If all the lease payment with credit toward purchase goes into paying mortgage does that change my tax liability
One thought on “What are the tax liability with a lease option to buy as far as leasing my home as oppose to renting or sell?”
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Typically, it will be treated as a rental (for IRS purposes) until such time as the lessee exercises their option and closes on the purchase. (no option money) There are determining factors as to whether the IRS will consider it a lease or a purchase at the time of entering into the contract, such as option money where the tenant is gaining equity. You can read more here:
http://www.ciremagazine.com/article.php?article_id=691