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<p>Would it be correct to assume that any interest accrued and/or
paid on the underlying "subject to" debt would be deductible as an
interest expense (for an business/investor taxpayer)?<br>
</p>
<pre class="moz-signature" cols="72">Kary L. Krismer
John L. Scott, Inc.
206 723-2148</pre>
<div class="moz-cite-prefix">On 10/10/2019 1:30 PM, Craig Gourley
wrote:<br>
</div>
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<p class="MsoNormal">Basis is cash plus assumed debt plus
improvements. Gain or loss is based on Selling price minus
closing costs and minus basis. The debt is not relevant when
it is paid off because it was accounted for at the time the
property was acquired. For example paying off the loan before
you sell has no tax implication at all. Same if it is paid
off at closing. Give me a call if you have ancillary
questions. Thanks, Craig
<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<div>
<p class="MsoNormal"><b><span style="font-size:14.0pt">Gourley
Law Group<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:12.0pt">Snohomish
Escrow<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:12.0pt">The
Exchange Connection<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:14.0pt"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><span
style="font-size:10.0pt;font-family:"Arial Rounded MT
Bold",sans-serif">1002 10<sup>th</sup> Street / PO
Box 1091<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:10.0pt;font-family:"Arial Rounded MT
Bold",sans-serif">Snohomish, WA 98291<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:10.0pt;font-family:"Arial Rounded MT
Bold",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span
style="font-size:10.0pt;font-family:"Arial Rounded MT
Bold",sans-serif">360.568.5065<o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:10.0pt;font-family:"Arial Rounded MT
Bold",sans-serif">360.568.8092 fax<o:p></o:p></span></p>
<p class="MsoNormal"><u><span
style="font-size:10.0pt;font-family:"Arial Rounded
MT Bold",sans-serif;color:#0563C1"><a
href="mailto:Craig@glgmail.com" moz-do-not-send="true">Craig@glgmail.com</a></span></u><span
style="font-size:10.0pt;font-family:"Arial Rounded MT
Bold",sans-serif"><o:p></o:p></span></p>
<p class="MsoNormal"><span
style="font-size:12.0pt;font-family:"Times New
Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="font-family:"Times
New Roman",serif"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><span
style="font-size:9.0pt;font-family:"Arial",sans-serif;color:red">Be
Aware! Online banking fraud is on the rise. If you receive
an email containing
<b>Wire transfer instructions </b>call us immediately to
verify the information prior to sending any funds!<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span
style="font-size:8.0pt;font-family:"Arial",sans-serif;color:blue">CONFIDENTIALITY
NOTICE: This electronic mail transmission may contain
legally privileged, confidential information belonging to
the sender. The information is intended only for the use
of the individual or entity named above. If you are not
the intended recipient, you are hereby notified that any
disclosure, copying, distribution or taking any action
based on the contents of this electronic mail is strictly
prohibited. If you have received this electronic mail in
error, please contact sender and delete all copies</span><span
style="font-size:8.0pt"><o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
<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 class="moz-txt-link-abbreviated" href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a>
<a class="moz-txt-link-rfc2396E" 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 class="moz-txt-link-rfc2396E" 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><span style="color:#1F497D"><o:p></o:p></span></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" moz-do-not-send="true">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" moz-do-not-send="true">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"
moz-do-not-send="true">
wsbarp-bounces@lists.wsbarppt.com</a> [<a
href="mailto:wsbarp-bounces@lists.wsbarppt.com"
moz-do-not-send="true">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"
moz-do-not-send="true">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"
moz-do-not-send="true">
wsbarp-bounces@lists.wsbarppt.com</a> <<a
href="mailto:wsbarp-bounces@lists.wsbarppt.com"
moz-do-not-send="true">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"
moz-do-not-send="true">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" moz-do-not-send="true">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>
<br>
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