Sort of On Topic. Is there any issue over overpricing and overselling a home to a relative if it’s an all cash deal?

[Coronita]

So I have a really dumb question I thought I’d get an opinion on.

Suppose that there’s a relative who’s interested in buying a primary home. Let’s suppose right now that your current home’s value via estimates is the same as my original purchase price.

Would there be any legality issues if
1) You were to markup my home such that it’s $499k more than market price such that a sales would yield me a $499k profit.
2) The relative purchases the home in ALL CASH $499k above market and there isn’t any lender involved (IE private sale) (IE no appraiser,no lender,etc)

Is there any issue with someone overpricing a home and for someone to overspend on a home, assuming it’s his/her own money?

If so, wouldn’t you end up pocketing $499k tax free (assuming you’re filing joint return), under the current primary home sales rule (assuming you lived there already for 4 years)?

Just curious.

[Arty]

If your relatives’ money is clean i.e. all taxes are paid and are from unquestionable source. You should be fine. If not, you will probably face RICO when shit hits the fan. This is not a legal advise and I am not a lawyer.

[Arty]

If your relatives’ money is clean i.e. all taxes are paid and are from unquestionable source. You should be fine. If not, you will probably face RICO when shit hits the fan. This is not a legal advise and I am not a lawyer.

[Arty]

If your relatives’ money is clean i.e. all taxes are paid and are from unquestionable source. You should be fine. If not, you will probably face RICO when shit hits the fan. This is not a legal advise and I am not a lawyer.

[Arty]

If your relatives’ money is clean i.e. all taxes are paid and are from unquestionable source. You should be fine. If not, you will probably face RICO when shit hits the fan. This is not a legal advise and I am not a lawyer.

[Arty]

If your relatives’ money is clean i.e. all taxes are paid and are from unquestionable source. You should be fine. If not, you will probably face RICO when shit hits the fan. This is not a legal advise and I am not a lawyer.

[(former)FormerSanDiegan]

This looks a lot like a person trying to avoid estate tax. Hiding transfers of large sums in transactions is an old trick that rich folks try to use to transfer wealth while avoiding estate tax.

Transfers among relatives tend to draw scrutiny.

You also might want to look into the details of the Duke Cunningham case and see if his sale of overpriced house violated laws other than the obvious influence peddling charges.

P.S. – The relative would overpay by 5-6 K per year in property taxes.

[(former)FormerSanDiegan]

This looks a lot like a person trying to avoid estate tax. Hiding transfers of large sums in transactions is an old trick that rich folks try to use to transfer wealth while avoiding estate tax.

Transfers among relatives tend to draw scrutiny.

You also might want to look into the details of the Duke Cunningham case and see if his sale of overpriced house violated laws other than the obvious influence peddling charges.

P.S. – The relative would overpay by 5-6 K per year in property taxes.

[(former)FormerSanDiegan]

This looks a lot like a person trying to avoid estate tax. Hiding transfers of large sums in transactions is an old trick that rich folks try to use to transfer wealth while avoiding estate tax.

Transfers among relatives tend to draw scrutiny.

You also might want to look into the details of the Duke Cunningham case and see if his sale of overpriced house violated laws other than the obvious influence peddling charges.

P.S. – The relative would overpay by 5-6 K per year in property taxes.

[(former)FormerSanDiegan]

This looks a lot like a person trying to avoid estate tax. Hiding transfers of large sums in transactions is an old trick that rich folks try to use to transfer wealth while avoiding estate tax.

Transfers among relatives tend to draw scrutiny.

You also might want to look into the details of the Duke Cunningham case and see if his sale of overpriced house violated laws other than the obvious influence peddling charges.

P.S. – The relative would overpay by 5-6 K per year in property taxes.

[(former)FormerSanDiegan]

This looks a lot like a person trying to avoid estate tax. Hiding transfers of large sums in transactions is an old trick that rich folks try to use to transfer wealth while avoiding estate tax.

Transfers among relatives tend to draw scrutiny.

You also might want to look into the details of the Duke Cunningham case and see if his sale of overpriced house violated laws other than the obvious influence peddling charges.

P.S. – The relative would overpay by 5-6 K per year in property taxes.

[(former)FormerSanDiegan]

I would worry that this transaction is being set up primarily as a tax dodge. The Government has been aggressively targeting tax dodges over the past several years.
The purpose of the transaction appears to be primarily to either a) avoid estate taxes, or b) establish a high cost basis that eventually benefits the buyer when they sell.

I would not stick my neck out on a transaction like this. You can probably get away with transactions within 15-20% of comps, since it might be harder to prove that it was overpaid. But a 100% difference would likely stick out if there is any screening going on by any law enforcement agencies. OR even worse, it will likely get noticed on one of these housing blogs as such an outlier that would raise suspicion.

[(former)FormerSanDiegan]

I would worry that this transaction is being set up primarily as a tax dodge. The Government has been aggressively targeting tax dodges over the past several years.
The purpose of the transaction appears to be primarily to either a) avoid estate taxes, or b) establish a high cost basis that eventually benefits the buyer when they sell.

I would not stick my neck out on a transaction like this. You can probably get away with transactions within 15-20% of comps, since it might be harder to prove that it was overpaid. But a 100% difference would likely stick out if there is any screening going on by any law enforcement agencies. OR even worse, it will likely get noticed on one of these housing blogs as such an outlier that would raise suspicion.

[(former)FormerSanDiegan]

I would worry that this transaction is being set up primarily as a tax dodge. The Government has been aggressively targeting tax dodges over the past several years.
The purpose of the transaction appears to be primarily to either a) avoid estate taxes, or b) establish a high cost basis that eventually benefits the buyer when they sell.

I would not stick my neck out on a transaction like this. You can probably get away with transactions within 15-20% of comps, since it might be harder to prove that it was overpaid. But a 100% difference would likely stick out if there is any screening going on by any law enforcement agencies. OR even worse, it will likely get noticed on one of these housing blogs as such an outlier that would raise suspicion.

[(former)FormerSanDiegan]

I would worry that this transaction is being set up primarily as a tax dodge. The Government has been aggressively targeting tax dodges over the past several years.
The purpose of the transaction appears to be primarily to either a) avoid estate taxes, or b) establish a high cost basis that eventually benefits the buyer when they sell.

I would not stick my neck out on a transaction like this. You can probably get away with transactions within 15-20% of comps, since it might be harder to prove that it was overpaid. But a 100% difference would likely stick out if there is any screening going on by any law enforcement agencies. OR even worse, it will likely get noticed on one of these housing blogs as such an outlier that would raise suspicion.

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