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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link="#0563C1" vlink="#954F72"><div class=WordSection1><p class=MsoNormal>Add closing costs (real estate excise tax if any for the buyer, escrow fee, inspection costs, etc.), right?<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal> Steve<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> wsbarp-bounces@lists.wsbarppt.com <wsbarp-bounces@lists.wsbarppt.com> <b>On Behalf Of </b>Inger Brockman<br><b>Sent:</b> Thursday, October 10, 2019 12:40 PM<br><b>To:</b> WSBA Real Property Listserv <wsbarp@lists.wsbarppt.com><br><b>Subject:</b> Re: [WSBARP] purchase of encumbered real property - income tax basis<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Basis = Cash plus Assumed (underlying) Mortgage<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><a href="https://www.irs.gov/publications/p551#en_US_201812_publink1000256913">https://www.irs.gov/publications/p551#en_US_201812_publink1000256913</a><o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Real estate excise tax is also calculated on the sum of cash and underlying debt.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><b><span style='font-size:9.0pt;font-family:"Arial",sans-serif;color:#D41244'>Inger Brockman </span></b><b><span style='font-size:9.0pt;font-family:"Arial",sans-serif;color:black'>|</span></b><b><span style='font-size:9.0pt;font-family:"Arial",sans-serif;color:#D41244'> Attorney </span></b><b><span style='font-size:9.0pt;font-family:"Arial",sans-serif;color:black'>| Montgomery Purdue Blankinship & Austin </span></b><b><span style='font-size:6.0pt;font-family:"Arial",sans-serif;color:black'>PLLC</span></b><span style='color:#44546A'> </span><span style='font-size:2.0pt;font-family:"Arial",sans-serif;color:black'><br></span><span style='font-size:8.5pt;font-family:"Arial",sans-serif;color:#0D0D0D'>701 Fifth Avenue, Suite 5500, Seattle, WA 98104 (206) 682-7090 Fax (206) 625-9534<br></span><span style='font-size:8.0pt;font-family:"Arial",sans-serif;color:#44546A'><a href="mailto:brockman@mpba.com"><span style='color:#D41244'>brockman@mpba.com</span></a> <a href="http://www.mpba.com/" title="http://www.mpba.com/"><span style='color:#D41244'>www.mpba.com</span></a></span><span style='color:#44546A'> <br></span><span style='font-size:4.0pt;color:#44546A'><br></span><span style='font-size:7.5pt;font-family:"Arial",sans-serif;color:gray'>Privileged or confidential information may be contained in this message. If you are not the intended recipient, you may not <br>copy or communicate this message to anyone. If you received this message in error, please destroy this message and notify <br>the sender by reply email. </span><i><span lang=EN-GB style='font-size:7.5pt;color:gray'>MPBA is committed to our environment. Please join us and consider not printing this e-mail unless necessary.</span></i><i><span style='font-size:7.5pt;color:gray'><o:p></o:p></span></i></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> <a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a>> <b>On Behalf Of </b>Rod Harmon<br><b>Sent:</b> Thursday, October 10, 2019 12:12 PM<br><b>To:</b> WSBA Real Property Listserv <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br><b>Subject:</b> [WSBARP] purchase of encumbered real property - income tax basis<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>This is one of those tax questions I ought to know the answer to, but I don’t. <o:p></o:p></p><p class=MsoNormal>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? <o:p></o:p></p><p class=MsoNormal>Cash paid to seller plus balance due on mortgage at time of purchase?<o:p></o:p></p><p class=MsoNormal>Cash paid to seller? <o:p></o:p></p><p class=MsoNormal>If the latter, how does client account for the mortgage when he pays it off upon sale?<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span style='font-size:13.0pt;font-family:"Arial",sans-serif;color:#1F497D'>Rod Harmon</span><o:p></o:p></p><p class=MsoNormal><b><span style='font-size:13.0pt;font-family:"Arial",sans-serif;color:#1F497D'> </span></b><o:p></o:p></p><p class=MsoNormal><b><span style='font-size:13.0pt;font-family:"Arial",sans-serif;color:#1F497D'>RODNEY T. HARMON</span></b><o:p></o:p></p><p class=MsoNormal><b><span style='font-family:"Arial",sans-serif;color:#1F497D'> Attorney at Law</span></b><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'> P.O. Box 1066</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'> Bothell, WA 98041</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'> Tel: (425) 402-7800</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'> Fax: (425) 458-9096</span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'> <a href="http://www.rodharmon.com">www.rodharmon.com</a></span><o:p></o:p></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'> <a href="mailto:rodharmon@msn.com">rodharmon@msn.com</a></span><o:p></o:p></p><p class=MsoNormal style='margin-top:6.0pt'><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> <a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> [<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">mailto:wsbarp-bounces@lists.wsbarppt.com</a>] <b>On Behalf Of </b>Rick Hoss<br><b>Sent:</b> Thursday, October 10, 2019 9:32 AM<br><b>To:</b> 'WSBA Real Property Listserv' <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br><b>Subject:</b> Re: [WSBARP] Affirmative Defenses to Fraud and/or Negligent Misrepresentation<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span style='font-family:"Times New Roman",serif;color:#1F497D'>Hi Cat.<o:p></o:p></span></p><p class=MsoNormal><span style='font-family:"Times New Roman",serif;color:#1F497D'>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).<o:p></o:p></span></p><p class=MsoNormal><span style='font-family:"Times New Roman",serif;color:#1F497D'>Restatement (Second) of Torts, Sec. 552A; ESCA Corp v. KPGM Peat Marwick, 135 Wash.2d 820, 826 (1998).<o:p></o:p></span></p><p class=MsoNormal><span style='font-family:"Times New Roman",serif;color:#1F497D'>Rick<o:p></o:p></span></p><p class=MsoNormal><span style='font-family:"Times New Roman",serif;color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-family:"Times New Roman",serif;color:#1F497D'><o:p> </o:p></span></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> <a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a>> <b>On Behalf Of </b>Catherine Clark<br><b>Sent:</b> Wednesday, October 09, 2019 1:09 PM<br><b>To:</b> WSBA Real Property Listserv <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br><b>Subject:</b> [WSBARP] Affirmative Defenses to Fraud and/or Negligent Misrepresentation<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>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?<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>While I’ve been at this game “a while,” I haven’t seen that before. Perhaps one of you has. Your thoughts appreciated.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Thanks.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span style='font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D'>Catherine “Cat” Clark<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D'>Law Office of Catherine C. Clark PLLC<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D'>2200 Sixth Avenue, Suite 1250<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D'>Seattle, WA 98121<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D'>Phone: (206) 838-2528<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D'>Cell: (206) 409-8938<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D'>Fax: (206) 374-3003<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D'>Email: <a href="mailto:cat@loccc.com">cat@loccc.com</a><o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D'>NOTICE: The information contained in this electronic information transmission is confidential. If you are not the intended recipient, or the employee or agent responsible for delivering it to the intended recipient, you are hereby notified that any use, dissemination, distribution or copying of this communication is prohibited. If you received this communication in error, please immediately notify the sender by telephone at (206) 838-2528. Thank you.<o:p></o:p></span></p><p class=MsoNormal><o:p> </o:p></p></div></body></html>