selling a house below market value to a family member. Asked by Mary, Alexandria, VA Mon Oct 5, 2009. I would like to sell a property I own to my son. The house is worth around 790,000 and I would sell to him for $617,000 which is what I owe on the mortgage.
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It’s Not An Arm’s Length Transaction. The tax man levies gift tax on the difference between the property’s appraised value and the sale price. For example, if your house is worth $150,000, and you sell it to your children for $1, you face a tax charge on the $149,999 difference.
Selling a house to a family member can seem like an ideal solution. The property goes to someone you know, you don’t have to find a buyer, and you may be able to give a loved one a property at a reduced price that might be affordable to them. However, selling to a family member increases the complexity of the sale in a number of ways.
Since you are talking about a below market purchase from a family member, I believe the difference between your purchase price and the FMV of the property will be considered a gift of equity. The seller might be required to file a gift tax return depending upon the amount of the gift.
What Is The Best Month To Buy A House When you learn the best and worst months to sell a house in each state across the country the results may surprise you. The folks at SmartZip and Inman looked at monthly selling trends, average days on market, and the listing to sale price ratios over five years to reveal when homeowners should, and should not, sell a house in each state.What No Money Can Buy
1. Agree on a price, but stay flexible. In a standard real estate transaction, the buyer and seller are on opposing teams. They both want to come out on top-or at least with most of their demands met. When your buyer is a friend or family member, though, you don’t have the luxury of thinking like that.
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how can i sell a house below market value to family?. You have no intention of selling this to your family member to keep for themselves; you want them to hold this property in their name while you buy another rental property for yourself.. 1) sell the house sub market value for say 300k.
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