Selling my house and the property next to it....?

Question

my house is through a mortgage company and the property that borders the house property is on land contract well we want to sell both of the properties can we sell the land contract if after we sell it we pay off the original owner? Please help I'm ignorant when it comes to things like this. The property is in Indiana

Answer 1

it would be treated the same as any other sale in escrow -- that is at the time  of closing the balance owed on the land contract would be paid  from the proceeds.  

Answer 2

The land contract holder would be paid off through the sale of the property. If you sell the home & the property together, the land contract holder would still get paid off before you receive any money from the sale.

Answer 3

Just like your mortgage would need to be paid off simultaneous with the sale of your home, the land contract (and any other liens) would need to be paid of simultaneous with the sale of that land.

Something to note is that total capital gains exclusion includes gain in property adjacent to your primary residence if sold within 2 years either side of when you sell your home (assuming you lived in your home at least 2 of past 5 years) http://www.irs.gov/publications/p523/ar0...