[WSBARP] purchase of encumbered real property - income tax basis
Stephen A. Brandli
steve at brandlilaw.com
Thu Oct 10 12:44:40 PDT 2019
Add closing costs (real estate excise tax if any for the buyer, escrow fee,
inspection costs, etc.), right?
Steve
From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>
On Behalf Of Inger Brockman
Sent: Thursday, October 10, 2019 12:40 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] purchase of encumbered real property - income tax
basis
Basis = Cash plus Assumed (underlying) Mortgage
https://www.irs.gov/publications/p551#en_US_201812_publink1000256913
Real estate excise tax is also calculated on the sum of cash and underlying
debt.
Inger Brockman | Attorney | Montgomery Purdue Blankinship & Austin PLLC
701 Fifth Avenue, Suite 5500, Seattle, WA 98104 (206) 682-7090 Fax (206)
625-9534
<mailto:brockman at mpba.com> brockman at mpba.com <http://www.mpba.com/>
www.mpba.com
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<mailto:wsbarp-bounces at lists.wsbarppt.com> > On Behalf Of Rod Harmon
Sent: Thursday, October 10, 2019 12:12 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com
<mailto:wsbarp at lists.wsbarppt.com> >
Subject: [WSBARP] purchase of encumbered real property - income tax basis
This is one of those tax questions I ought to know the answer to, but I
don't.
House-flipping client buys real property, paying the seller cash and taking
the property encumbered by a mortgage. What is his basis for income tax
purposes?
Cash paid to seller plus balance due on mortgage at time of purchase?
Cash paid to seller?
If the latter, how does client account for the mortgage when he pays it off
upon sale?
Rod Harmon
RODNEY T. HARMON
Attorney at Law
P.O. Box 1066
Bothell, WA 98041
Tel: (425) 402-7800
Fax: (425) 458-9096
www.rodharmon.com <http://www.rodharmon.com>
rodharmon at msn.com <mailto:rodharmon at msn.com>
From: wsbarp-bounces at lists.wsbarppt.com
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[mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Rick Hoss
Sent: Thursday, October 10, 2019 9:32 AM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com
<mailto:wsbarp at lists.wsbarppt.com> >
Subject: Re: [WSBARP] Affirmative Defenses to Fraud and/or Negligent
Misrepresentation
Hi Cat.
In neg misrep, the plaintiff must prove justifiable reliance. If a party to
a contract is negligent to ascertain the truth of the other party's
representations, that party's own negligence is a complete defense to the
claim. See Condor Enterprises v. Boise Cascade, 71 Wash.App. 48, 53 (1993).
Restatement (Second) of Torts, Sec. 552A; ESCA Corp v. KPGM Peat Marwick,
135 Wash.2d 820, 826 (1998).
Rick
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<wsbarp-bounces at lists.wsbarppt.com
<mailto:wsbarp-bounces at lists.wsbarppt.com> > On Behalf Of Catherine Clark
Sent: Wednesday, October 09, 2019 1:09 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com
<mailto:wsbarp at lists.wsbarppt.com> >
Subject: [WSBARP] Affirmative Defenses to Fraud and/or Negligent
Misrepresentation
Has anyone faced an "assumption of the risk" and "contributory negligence
and/or comparative fault" affirmative defense when claiming fraud/negligent
misrepresentation around a real estate transaction?
While I've been at this game "a while," I haven't seen that before. Perhaps
one of you has. Your thoughts appreciated.
Thanks.
Catherine "Cat" Clark
Law Office of Catherine C. Clark PLLC
2200 Sixth Avenue, Suite 1250
Seattle, WA 98121
Phone: (206) 838-2528
Cell: (206) 409-8938
Fax: (206) 374-3003
Email: cat at loccc.com <mailto:cat at loccc.com>
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