Technically the 25% gain would classify as interest income. Here is why: you have not bought and sold the property to another party and recieved a gain...rather the monies spend on the property have been given back to you with a stated interest rate.

Thats the way we do it...but if your CPA is more creative than mine...and finds an advantage to handling it as capital gain...then let me know!

I may fire mine!!

Darius M. Barazandeh