When an investor buys your note — all of it or just the next payments — use the guided sale instead of hand-closing and re-booking. Open the loan, click Close Out, choose Sold, then "Selling the note to an investor? Use the guided sale." (Owner/Admin only; asset notes.)
Total — the whole note
The investor buys the entire note. NoteHarbor closes the loan as Sold, records the sale on the Tax Tracking profile (same fields as the plain Sold close-out), and computes the realized gain: net proceeds (price minus selling expenses) against your basis, classified long-term or short-term by how long you held the note.
Where the basis comes from (in order): a manual adjusted basis override on the Tax Tracking tab always wins; otherwise the price you paid for a purchased note (the acquisition record); otherwise the worksheet's purchase price; and for a note you originated and are selling as paper, the principal you haven't recovered yet. The same figure feeds the Capital Gains report — one computation, never two.
Partial — the next payments
The investor buys the next $X of principal. This is the classic "3 notes" flow, automated:
- The original note closes as Sold — its history stays intact.
- An investor piece spawns: a linked note whose schedule is the buyer's exact entitlement — every full payment until their principal is collected, with the crossing payment prorated to the cent. It carries the purchase record (price paid, amount bought, quoted yield), so its page shows the investor position ledger.
- Your residual spawns: the remainder — it starts collecting at the crossing payment (nothing is due on it while the buyer's hold runs).
The two spawned schedules add back up to the original to the cent, row by row — nothing is double-counted, nothing is lost. The gain on a slice sale is deliberately left for your CPA (allocating basis to a sold slice is genuinely contested tax territory); the sale record stores the cash facts.
B-schedule — a face slice
Same 3-notes split, but the buyer's slice amortizes at the note's own rate (the classic B-schedule partial: the discount isn't taxed until payoff). The investor piece runs the face-rate B-schedule; your residual takes the crossing remainder (booked as interest) plus everything after.
Continue to service
Toggle Continue to service when the org keeps collecting for the buyer:
- Total — the note stays active on your book; the buyer becomes its Pay-To owner, so every payment you post accrues an investor payable to them automatically.
- Partial / B-schedule — the spawned investor piece stays active with the buyer as its owner; payments you record on it accrue their payables.
Deducting a servicing fee from the buyer's remittance is coming next (W3-4) — for now the payable is the full P&I collected.
What the guided flow requires
- Total works on any live asset note you own (not in bankruptcy or foreclosure).
- Partial / B-schedule additionally need: a note you originated (slice sales of purchased notes need CPA basis allocation first), a current loan (no late or partially-paid installments), no unpaid installment due before the sale date, and zero escrow, suspense, and late-charge balances — trust money and fee income can't be split across spawned notes.
Everything is audited: the sale on the original, a creation entry on each spawned note, and the lineage links on all three loan pages.
Not tax advice — the gain figures feed your accountant's Schedule D / Form 6252, they don't replace it. For a plain "just record it" sale without spawning, the regular Sold close-out fields are still right there in the same dialog.