[WSBARP] tax question

[Marvin Benson]

For the purpose of the exclusion of gain from the sale of taxpayers
principal residence, there is nothing wrong with installment sales.   If
the taxpayer later repossesses the residence, there are rules for
recalculating the gain.  If the transaction were fraudulent there could be
other rules involved.

Marvin Benson

On Mon, May 18, 2020 at 12:34 PM David Daniel <ddaniel at demcolaw.com> wrote:

> Listmates,
>
> I certainly am not a tax advisor so I may have my terminology wrong here,
> but here goes:
>
> Client advises that he and his spouse need to sell their property within a
> month from now to capture the $500k exclusion from capital gains on sale of
> personal residence. Client wants to proceed with a seller-financing
> transaction to a buyer who will pay little-to-nothing down. Can Client
> capture the full benefit of the $500k exclusion on such a transaction even
> if no (or very little) cash gain is recognized at the closing? Does it make
> a difference if it is Note/DOT vs. REK?
>
> Seems to me the exclusion would only apply to gain actually recognized
> prior to the deadline (i.e. at closing), because to allow otherwise would
> seem to create a loophole for Client to capture the benefit by simply
> transferring the property to an insider (who could then subsequently sell
> the property to a third party, without concern over the deadline, and then
> agree (on the side) to a profit sharing arrangement with the original
> owner/Client).
>
> Hope that makes sense. Any insights? Thanks in advance.
>
>
> *David C. Daniel*, Attorney
>
> *____________________________________*
> * DEMCO LAW FIRM, P.S.*
>
> *____________________________________ **Office |* (206) 203-6000
> *Email |* *ddaniel at demcolaw.com <ddaniel at demcolaw.com>*
>
> 5224 Wilson Ave. S., Suite 200
>
> Seattle, WA 98118
> ***Disclaimer: Please note that RPPT listserv participation is not
> restricted to practicing attorneys and may include non-practicing
> attorneys, law students, professionals working in related fields, and
> others.***
>
> _______________________________________________
> WSBARP mailing list
> WSBARP at lists.wsbarppt.com
> http://mailman.fsr.com/mailman/listinfo/wsbarp
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20200518/a4e60499/attachment.html>