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Can you sell your home (no mortgage) for $1?


KillJoy

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There's no sales tax on house sales, but the owners' new property tax would be based on the assessed value. I think you'd have a hard time convincing the IRS that this was a legitimate $1 sale as opposed to a gift. You may have to pay capital gains tax and the recipient may have to pay income tax, but the rules appear to be way over my head:

 

http://www.bankrate.com/brm/itax/tax_adviser/20060531a1.asp

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There's no sales tax on house sales, but the owners' new property tax would be based on the assessed value. I think you'd have a hard time convincing the IRS that this was a legitimate $1 sale as opposed to a gift. You may have to pay capital gains tax and the recipient may have to pay income tax, but the rules appear to be way over my head:

 

http://www.bankrate.com/brm/itax/tax_adviser/20060531a1.asp

 

You're paying capital gains tax, no if and or buts (sadly), no matter how much you try and depreciate it. This will throw a red flag almost immediately with title agency's and the state and federal revenue services.

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This is the situation. We will be purchasing my Parent's house. The thought is to buy it for $1. I know this will throw a Red Flag, and I will have to pay SOMETHING (what would be normal for a realistic purchase).

 

Once the house is mine, get a Home Equity Loan for the Purchase amount. The interest would be ~ 1/2.... so.... win /win!

 

KillJoy

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I didn't think you paid cap gains on 1 house i.e. the house you lived in? If you had more than 1 house, so a second rental for example, and you sold the 2nd rental house, then you paid cap gains on it?

 

 

I do not think you pay Cap Gains on your primary residence.

 

KillJoy

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This is the situation. We will be purchasing my Parent's house. The thought is to buy it for $1. I know this will throw a Red Flag, and I will have to pay SOMETHING (what would be normal for a realistic purchase).

 

Once the house is mine, get a Home Equity Loan for the Purchase amount. The interest would be ~ 1/2.... so.... win /win!

 

KillJoy

 

Uh, wat?

 

With an equity line, you are typically allowed to borrower up to 80% of the value of the home. These are also usually ARM's with a balloon payment and the rates are not as good as a fixed rate mortgage. Why are you assuming a HELOC's rate will be half of a conventional fixed mortgage?

-Marc

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Uh, wat?

 

With an equity line, you are typically allowed to borrower up to 80% of the value of the home. These are also usually ARM's with a balloon payment and the rates are not as good as a fixed rate mortgage. Why are you assuming a HELOC's rate will be half of a conventional fixed mortgage?

-Marc

 

 

Also, this is why I am asking. If it looks promising that this is doable, I will be contacting "someone" for assistance getting it done.

 

KillJoy

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