For three years, Ron owned a vacation home that had a fair market value of $240,000. On June 1, Ron...

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For three years, Ron owned a vacation home that had a fair market value of $240,000. On June 1, Ron sold the home to Dawn under the following terms: $60,000 down and $1,000 per month for 210 months, with no stated interest. In order to properly compute the portion of each payment that equals interest and principal for tax purposes, to which section(s) of the Internal Revenue Code would their tax advisors turn?

Sandeep · Accepted Answer

PRINCIPAL FOR TAX PURPOSES - IRC
In order to properly compute the portion of each payment that equals interest and principal for tax purposes the Section 13 of the IRC can be referred to by Tax Advisors easily. 
Sec 163(d) (5) deals with Residential Property held for Investment including any property producing income as detailed in Sec 469e (1) and subsequent interest accruing from the conduct of trade or business not being inert activity.

For three years, Ron owned a vacation home that had a fair market value of $240,000. On June 1, Ron sold the home to Dawn under the following terms: $60,000 down and $1,000 per month for 210 months,...

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