how do i buy my own house? sounds funny,right?

Question

While I was house hunting my dad bought a house he intended to rent but we liked it so we moved in.

he paid $100k with a 20k down payment that left me with an 80k mortgage balance.

The house was a foreclosure and is now appraised at 135k.

He considers the house mine. I pay the mortgage, maintenance and all the fun stuff required with homeownership.

He needs the 20k back for my sisters college tuition in 4-5yrs.

I think it's as easy as me qualifying for a loan for 20k+ mortgage balance (70 something) and any closing costs/fees...

or am I wrong?

he won't care about the accrued equity or anything in the property, he just wants his down payment back.

Does the equity affect this seemingly simple transaction?

he doesn't GAIN any profits so that should eliminate any taxes paid...right?

James McCormick · Answer

it sounds to me like your dad would have no tax to pay, as he is going to make zero on the sale. You, however would have an instant gain of about 15,000 (the appresion on the house this far) that you would have to consider if and when you sell the house. If you waited, and inherited the house from your father at his death, your cost basis would be the fair market value of the house at the time of his death. Just something to consider. I am not a tax man , talk to yours.

how do i buy my own house? sounds funny,right?

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