unpaid taxes/we own house

[spterry]

What is the name of your state? Florida

We recently purchased a house for our adult son, as he was unable to qualify for a mortgage. The closing was executed with his name on the "deed". We did this with the understanding that in a couple of years when he has repaid his debt he would then purchase the home from us. The current agreement is he is a "renter" and is paying us "rent" (the mortgage); my dh & I will treat this as a rental property at tax time. The "glich" is we just found out that one of the reasons his son couldn't qualify (and didn't tell us!) was that he has not paid taxes for years-personal and business (owns his own business) and the IRS has sent him a letter. Well.....we did a "quick removal" of his name from the deed. But are there any other implications by rights of his name being on the "deed" initially even though the mortgage is in our name? And what, if any, implications are there for his son in terms of financial garnishment of wages??

 

[JETX]

The immediate problem I can foresee would be if the IRS did a property search and found that the property HAD been in his name. They could try to argue that the 'quick' removal of his name would be a fraudulent conveyence (done to avoid the creditors - IRS - of access to his assets). If they successfully argue this, a court could reverse the removal and return the proprety to his name.... and then seize or levy against it.

 

[spterry]

we just closed on the house in mid november, did the quick removal probably less than 30 days after closing (about the same time the first payment was due), so I guess we'll wait and just see. information has been less than forthcoming (a benefit of doing business with a family member ha!ha!) about the situation and i'm beginning to believe that my dh may have had an "inkling" of this before the closing! would serve all of us right if the IRS went after the house! thanx for the free advice!