Tax implications of buying home at less than market from foreign inlaws

[mmurph07]

What is the name of your state? - Alabama

My inlaws are foreign. They purchased a house here for $200,000. They are not going to be able to relocate to the United States and they would like to sell the house to my wife and myself for $130,000. Houses in their neighborhood are currently selling for $230,000.

What are the tax implications for us and our inlaws if we buy the house so far under market value? Would the $100,000 difference be taxable as income to us and create gift a tax liability for her parents? Will our neighbors strangle us for paying so much less than they are selling their houses for?

 

[seniorjudge]

I hope someone answers this; I would like to know the answer also.

 

[abezon]

The price discount is a gift. If your in-laws are non-resident aliens, they can gift you up to $100,000 & no one has to file any kind of form. If they are resident aliens, they can still gift you a bunch of money, but should consult an estate tax professional about the gift tax return. Be sure to get someone who deals with international estate tax planning. Your in-laws may just have to file the gift tax return, without paying any taxes.