3.11 Generally

• Library: Real Estate Practice Deskbook (2019 Ed.)

1. (§3.11) Generally

In a deferred sales transaction, the purchaser's obligation—at its fair market value—plus cash received constitutes the total proceeds from the sale. The amount by which those proceeds exceed or fall short of the property's basis is the gain or loss in the year of sale.

The fair market value of the purchaser's obligation does not need to be the face value of the deed of trust or other security instrument if, e.g., that instrument is a second deed of trust. If the obligation is

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