• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Buyer wants, seller scared - tax issue.

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

E

ERhoads673

Guest
I am in the process of selling my Kennel and Farm. The person who wants to buy threw out this idea and I wondered if it is legal and if not who will be left holding the bag.
He said he would be interested in purchasing the house and farm at the county appraised value (which is much lower than the selling price) and then write a separate check for all of the appliances, furniture, etc. Thus making up the difference. For example lets say 150,000 for house and farm, he will pay, and then he will write another check for 100,000 for appliances, furniture, etc. The reality is that the appliances he would get would be worth maybe only a couple of thousand - if that. I can see the reasons, one he doesn't want the appraised value of the farm to jump for future tax reasons for himself. But is it legal? Does the IRS look into anything like this and if so, who gets in trouble - me for overpricing my items, or him? In your honest opinion would something like this come to the attention of the IRS? How would the additional money be placed in my account with out being taxed or what tax would occur with that sum? I am actually sitting well with the 97 change in tax code that allows me to exempt 250,000 of captial gains, but the buyer wants this method, so that he doesn't have a major jump in his taxes. The reality is that people price things at all different prices in order to make profits, we might buy a antique that is worth thousands of dollars, due to age, but the wood to make the antique and labor is only worth maybe 50 dollars. I am in a rock in a hard place, because I am only two months from foreclosure and I have to sell the farm, but I fear if I don't accept this method and not take on the risk, than I will lose my buyer. Is there any other options that might be more safe? Let me know asap.
Thank you for your time.
Ed
 



Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top