Property Under Contract

Ahmed

Not sure how to record the following in Quicken
1- Purchased a property on a installment land contract. AKA with monthly payments not to be applied towards the principle with a balloon payment at the end of the term.

I know what the asset account is, but what type of liability account would that be? its basically almost like a monthly lease fee. I do have a liability to pay the purchase price at the end of the term, but the monthly payment is a lease fee and not attributed to the principle or interest which is not relevant in this transaction.
Thank you

Tom Young

An "installment land contract" AKA "contract for deed" and other names is treated by the IRS as a mortgage loan and the transaction itself as a "sale."  You yourself have recognized it as such, since you've recorded the asset, so I see no problem with the same treatment in Quicken.  Establish the balloon payment as a non-amortizing loan - no need to use Quicken's loan wizard for that - and treat the monthly payments as interest.

Tom Young

An "installment land contract" AKA "contract for deed" and other names is treated by the IRS as a mortgage loan and the transaction itself as a "sale."  You yourself have recognized it as such, since you've recorded the asset, so I see no problem with the same treatment in Quicken.  Establish the balloon payment as a non-amortizing loan - no need to use Quicken's loan wizard for that - and treat the monthly payments as interest.