Hi Everyone,
First, Thank you ahead of time for taking the time to answer my question.
Is there any legal/tax issue to purchase a property from a friend in California who is willing to sell it below appraised value. Example: appraised value of the property is $750K and my friend purchased it awhile ago for $400K and the loan left on it is $300K. Is there any issue for him to sell it at $380K, which is $300k loan amount left and 80K gift equity to cover 20% and closing cost? I've been living at this property and basically been making the payments for the past 10 years and we both decided that it makes sense for me to purchase it at the loan amount. What are the tax implications for the seller and the buyer? What about in California?
Thank you,
Ted
First, Thank you ahead of time for taking the time to answer my question.
Is there any legal/tax issue to purchase a property from a friend in California who is willing to sell it below appraised value. Example: appraised value of the property is $750K and my friend purchased it awhile ago for $400K and the loan left on it is $300K. Is there any issue for him to sell it at $380K, which is $300k loan amount left and 80K gift equity to cover 20% and closing cost? I've been living at this property and basically been making the payments for the past 10 years and we both decided that it makes sense for me to purchase it at the loan amount. What are the tax implications for the seller and the buyer? What about in California?
Thank you,
Ted