Lease/Option Sandwich TAX HELP!!!

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Posted by Bob on February 05, 2010 at 03:20:21:

I did roughly about 12 sandwich lease/options where I lease/optioned with the seller, then lease/optioned to my tenant buyer. I have it set up where I simply collect the funds from the tenant/buyer, deposit into my account, then send a check to the seller. (I make sure to call the lender before sending off the check to the seller to make sure they are making the payments, I find it easier to do it this way), anyhow, there's nearly $12,000 that comes into my business account every month, and was wondering what to do about taxes, and how to handle this. Some of my sellers are asking for a statement of account, or special tax forms. I am unsure of what to give them.

By the way, some of the properties are not giving me any cash flow, so it's break even. The rent passes to my account then a check is cut to my seller for the same amount.

I know I should speak to a tax person directly, but wanted some input from the real estate pros on this.

Please help!!!

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