Not all notes are taxed the same and how you account for them can make a big difference. Performing Notes: Predictable interest income Usually taxed as ordinary income Timing depends on whether you use cash or accrual accounting Non-Performing Notes: Income arises when a note is resolved, foreclosure, modification, or sale Gains may be ordinary income or capital gains depending on structure Cash vs accrual method affects when and how income is recognized Your strategy and accounting method directly affect your tax outcome. Same note, very different results depending on structure and method. 💬 Question for the group: Are you currently tracking your notes on cash or accrual basis, and has it impacted your taxes yet?

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Hi, my name is Jay, I’m new to the community and a note broker looking to connect with note holders and note buyers. I joined this group to build relationships and learn from experienced professionals in the industry. I’m always open to tips, guidance, and insight that can help me grow and move in the right direction. Feel free to send me a message — I’ll respond as soon as possible. Praying everyone here continued success. Take care.

Thanks for accepting me,🙌 I'm excited to learn and grow with everyone!

The person asking this question is a real estate tax accountant. They are risking total loss of capital by not recording a valid lien to protect their interests. The moral of the story is no matter how much you trust the other party, always record a valid lien against the property to ensure your interests are protected.