San Elijo Hills

[Raybyrnes]

Does anyone know the selling conditionas behind 1688 Archer Rd or 1452 Sundance Ave in the San Elijo Community? Zillow has the selling prices listed at 118K and 243K.
This doesn’t seem to add up.

[PerryChase]

Probably related-party sales.

[SD Realtor]

Yeah Sundance was definitely a family deal. Sales history is as follows:

Date Seller Buyer

12/21/01 Standard Pacific Chula Vista Medical Ents
3/1/05 Chula Vista MedicalEnts Kuta Family Trust
5/25/06 Kuta Family Trust Adrian Jaffer

Note that the only market sale was the one in 2001. The other transfers were quit claim deeds.

Similar thing with Archer. The same entities are involved, Standard Pacific, Chula Vista Medical Ents and of course the Kuta Family Trust.

[sdcellar]

Same entities? That seems a little odd to me. Anybody got more insight into that? Is it basically an investment thing and the last sale goes to an ordinary party?

[PerryChase]

Sometimes related parties engineer “sales” to create 1031 exchanges for tax purposes.

[sdcellar]

Definitely a whole other world for me to learn about. Is this another one of those kinds of things that’s going to make me feel even more foolish about how much pay in taxes and my inability to work the system?

That kind of thing really pisses me off! (it’d be an entirely different matter, of course, if I were instead the beneficiary of such things…)

[PerryChase]

You’ll see a lot more of those artificial sales because in a down market, investors who got out are reluctant to replace sold properties with new properties. So they are more likely to “exchange” properties with a related party/company/relative.

[Raybyrnes]

How are they able to do this without getting around Boot Income that they would have to pay in the event that it was not a like kind exchange. Additionally is it acceptable to undervalue a property to improve the Adjusted Cost Basis. Seems to me that this is similar to me selling a used car for a dollar and accepting a envelope full of cash for my administrative fee. In the end it would appear to be an illegal transaction as it misrepresents actual value for the purposes of avoiding taxes.

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