Condo Sale - Capital Gains - Two Questions - NEED HELP!

[Tower]

What is the name of your state? South Carolina
Hi, my wife and I own a condo in Myrtle Beach, SC. We also purchased a residential home there about one year ago. We have had the condo for nine years, and desire to sell it and pay off the house, as we actually reside in Philadelphia.
Both properties in Myrtle Beach are listed as second homes, although we do rent out the condo occasionally.
AND THE QUESTION IS: We have an offer on the condo. We were asking $200k, however, the prospective buyer wants to obtain a $240k mortgage, and have us pay him the difference back at settlement with an allowance for additional (200-240) captial gains tax. There isn't any problem as far as an appraisal, we are selling nearly 25% below market value.
Is this legal? Is it advisable?
Any and all help is appreciated.
Dave

[HomeGuru]

Originally Posted by Tower

What is the name of your state?Hi, my wife and I own a condo in Myrtle Beach, SC. We also purchased a residential home there about one year ago. We have had the condo for nine years, and desire to sell it and pay off the house, as we actually reside in Philadelphia.
Both properties in Myrtle Beach are listed as second homes, although we do rent out the condo occasionally.
Is this a bad thing to do, and are we really going to be nailed for capital gains? We are both in our late forties. Is there any way to soften the capital gains tax?
Second part - We have an offer on the condo. We were asking $200k, but the buyer wants to obtain a $240k mortgage, and have us pay him the difference back at settlement with an allowance for additional (200-240) captial gains tax.
Is this legal? Is it advisable?
Any and all help is appreciated.
Dave

**A: there is a Tax Law forum. Use it.

[CAlandlords]

Originally Posted by Tower

What is the name of your state? South Carolina
Hi, my wife and I own a condo in Myrtle Beach, SC. We also purchased a residential home there about one year ago. We have had the condo for nine years, and desire to sell it and pay off the house, as we actually reside in Philadelphia.
Both properties in Myrtle Beach are listed as second homes, although we do rent out the condo occasionally.
AND THE QUESTION IS: We have an offer on the condo. We were asking $200k, however, the prospective buyer wants to obtain a $240k mortgage, and have us pay him the difference back at settlement with an allowance for additional (200-240) captial gains tax. There isn't any problem as far as an appraisal, we are selling nearly 25% below market value.
Is this legal? Is it advisable?
Any and all help is appreciated.
Dave

Yes, it's legal if the home is appraising. That's all the lender cares about, is that it appraises for the sale price.

Is it advisable? Well, that depends. Why does the buyer want to structure the deal this way? Give all details, please. The way the deal is structured will determine if and how it affects your taxes.