I can’t seem to rationalize, purely from an After Tax Cash Flow standpoint, why a park owner would favor selling a home on a note versus doing a rent credit deal?
Note deals burden the park owner with tax on the gains in year 1, and no ability to depreciate the home from a taxation standpoint
Rent credit deals would create no gain on sale, and would allow for depreciation
The only thing favoring note is transferring insurance and property taxes to the owner. Those costs are significantly outweighed by detriments of note deals; the tax on gain and inability to depreciate.
I am presuming both would be taxed as ordinary income