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Gifts And Fair Market Value
Question: My mother wants to sell her home to my spouse and I. Can she sell to us at a discount to avoid taxes?
Answer: If she sells for less than fair market value, the IRS may question the difference. As well, the government has some special rules for inter-family sales. Why not buy the place for fair market value. Let Mom take back a note for, say, $10,000 or whatever number is appropriate. Then, Mom can forgive (gift) $10,000 a year for you and $10,000 for your spouse. This can get fairly complex, so a visit to a tax professional before doing anything is advised.
Written by Peter G. Miller.
© 1997 Peter G. Miller. All Rights Reserved. Rules, Disclaimers & Notices.
Copyright © 2012 Realty Times. All Rights Reserved.
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