Three years ago I sold my business to an individual. I held paper for some of the purchase price. In addition, I have a lein on their property. I am now forclosing on the property August 3rd. I plan on bidding at auction, buying the house and reselling it to recoup som of the money they owe me. I estimate I will only own the house for a few months before it's sold, but I have had a mortgage on it for three years. I'm in Illinois and my tax rate is around 20% I think. I need to know about capital gains on this issue.

Members here do not have enough financial information to answer your question. In reality, you will pay quite a few bucks to an accountant to solve this problem.

We do not work for free! Pay an accountant for this taxing problem. You will not regret professional advice.

"We do not work for free!"

I have no idea who this refers to or what it means, but AnswerPool, and the advice thereon, is free.

There may be some members who could answer your questions, but the safest route to follow, in my opinion, is to seek a CPA. It isn't cheap, but you lessen the chance of problems, and increase your chances of maximizing any benefits.

"We don't work for free." was intended as a joke about how much money an accountant will cost. My apology if this was misinterpreted.

DG, I have the same advice you do! Members here, even if an accountant, cannot give sound advice over the net without seeing proof of what they are dealing with. Accountants have to work withing a liscense. I wouldn't use H&R Block either. This issue is a bit taxing, even for them.

An accountant is going to cost a few bucks to sort this out, but it's better than an IRS audit and can save money in the long run.