Subject to Deal!!!

[Bill Rogers]

Sub to question:

There's this house that has about 85,000 in equity but its been sitting on the market since August. What I was thinking was offering him $60,000 and taking over his mortgage at 2.9%. Would he have to pay tax on the $60,000 that I pay him? Are there ways around it? Let me know your thoughts! Thanks!

[Don Konipol]

Quote from @Bill Rogers:

Sub to question:

There's this house that has about 85,000 in equity but it’s been sitting on the market since August. What I was thinking was offering him $60,000 and taking over his mortgage at 2.9%. Would he have to pay tax on the $60,000 that I pay him? Are there ways around it? Let me know your thoughts! Thanks!

If this house qualifies as his primary residence he will not have to pay a capital gains tax.  If not it would depend on his “tax basis” in the asset.  To make this determination one would have to know the price the seller paid for the property, any amount he paid out that represents “capitalized costs” rather than being expensed, and the amount of depreciation taken.  

[Eliott Elias]

Yes he would, unless it was homesteaded.