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<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt">This is one of those tax questions I ought to know the answer to, but I don’t.
<o:p></o:p></span></font></p>
<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt">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></span></font></p>
<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt">Cash paid to seller plus balance due on mortgage at time of purchase?<o:p></o:p></span></font></p>
<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt">Cash paid to seller?
<o:p></o:p></span></font></p>
<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt">If the latter, how does client account for the mortgage when he pays it off upon sale?<o:p></o:p></span></font></p>
<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt"><o:p> </o:p></span></font></p>
<p class="MsoNormal"><font size="4" color="#1f497d" face="Arial"><span style="font-size:13.0pt;font-family:"Arial",sans-serif;color:#1F497D">Rod Harmon</span></font><o:p></o:p></p>
<p class="MsoNormal"><b><font size="4" color="#1f497d" face="Arial"><span style="font-size:13.0pt;font-family:"Arial",sans-serif;color:#1F497D;font-weight:bold"> </span></font></b><o:p></o:p></p>
<p class="MsoNormal"><b><font size="4" color="#1f497d" face="Arial"><span style="font-size:13.0pt;font-family:"Arial",sans-serif;color:#1F497D;font-weight:bold">RODNEY T. HARMON</span></font></b><o:p></o:p></p>
<p class="MsoNormal"><b><font size="2" color="#1f497d" face="Arial"><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#1F497D;font-weight:bold"> Attorney at Law</span></font></b><o:p></o:p></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Arial"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D"> P.O. Box 1066</span></font><o:p></o:p></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Arial"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D"> Bothell, WA 98041</span></font><o:p></o:p></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Arial"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D"> Tel: (425) 402-7800</span></font><o:p></o:p></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Arial"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D"> Fax: (425) 458-9096</span></font><o:p></o:p></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Arial"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D"> <a href="http://www.rodharmon.com"><font color="#0563c1"><span style="color:#0563C1">www.rodharmon.com</span></font></a></span></font><o:p></o:p></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Arial"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D"> <a href="mailto:rodharmon@msn.com"><font color="#0563c1"><span style="color:#0563C1">rodharmon@msn.com</span></font></a></span></font><o:p></o:p></p>
<p class="MsoNormal" style="margin-top:6.0pt"><font size="2" face="Calibri"><span style="font-size:11.0pt"><o:p> </o:p></span></font></p>
<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt"><o:p> </o:p></span></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Calibri"><span style="font-size:11.0pt;color:#1F497D"><o:p> </o:p></span></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Calibri"><span style="font-size:11.0pt;color:#1F497D"><o:p> </o:p></span></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Calibri"><span style="font-size:11.0pt;color:#1F497D"><o:p> </o:p></span></font></p>
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<p class="MsoNormal"><b><font size="2" face="Calibri"><span style="font-size:11.0pt;font-weight:bold">From:</span></font></b> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com]
<b><span style="font-weight:bold">On Behalf Of </span></b>Rick Hoss<br>
<b><span style="font-weight:bold">Sent:</span></b> Thursday, October 10, 2019 9:32 AM<br>
<b><span style="font-weight:bold">To:</span></b> 'WSBA Real Property Listserv' <wsbarp@lists.wsbarppt.com><br>
<b><span style="font-weight:bold">Subject:</span></b> Re: [WSBARP] Affirmative Defenses to Fraud and/or Negligent Misrepresentation<o:p></o:p></p>
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<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt"><o:p> </o:p></span></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Times New Roman"><span style="font-size:11.0pt;font-family:"Times New Roman",serif;color:#1F497D">Hi Cat.<o:p></o:p></span></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Times New Roman"><span style="font-size:11.0pt;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></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Times New Roman"><span style="font-size:11.0pt;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></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Times New Roman"><span style="font-size:11.0pt;font-family:"Times New Roman",serif;color:#1F497D">Rick<o:p></o:p></span></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Times New Roman"><span style="font-size:11.0pt;font-family:"Times New Roman",serif;color:#1F497D"><o:p> </o:p></span></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Times New Roman"><span style="font-size:11.0pt;font-family:"Times New Roman",serif;color:#1F497D"><o:p> </o:p></span></font></p>
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<p class="MsoNormal"><b><font size="2" face="Calibri"><span style="font-size:11.0pt;font-weight:bold">From:</span></font></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><span style="font-weight:bold">On Behalf Of </span></b>Catherine Clark<br>
<b><span style="font-weight:bold">Sent:</span></b> Wednesday, October 09, 2019 1:09 PM<br>
<b><span style="font-weight:bold">To:</span></b> WSBA Real Property Listserv <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br>
<b><span style="font-weight:bold">Subject:</span></b> [WSBARP] Affirmative Defenses to Fraud and/or Negligent Misrepresentation<o:p></o:p></p>
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<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt"><o:p> </o:p></span></font></p>
<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt">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></span></font></p>
<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt"><o:p> </o:p></span></font></p>
<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt">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></span></font></p>
<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt"><o:p> </o:p></span></font></p>
<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt">Thanks.<o:p></o:p></span></font></p>
<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt"><o:p> </o:p></span></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Copperplate Gothic Light"><span style="font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D">Catherine “Cat” Clark<o:p></o:p></span></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Copperplate Gothic Light"><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></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Copperplate Gothic Light"><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></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Copperplate Gothic Light"><span style="font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D">Seattle, WA 98121<o:p></o:p></span></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Copperplate Gothic Light"><span style="font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D">Phone: (206) 838-2528<o:p></o:p></span></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Copperplate Gothic Light"><span style="font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D">Cell: (206) 409-8938<o:p></o:p></span></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Copperplate Gothic Light"><span style="font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D">Fax: (206) 374-3003<o:p></o:p></span></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Copperplate Gothic Light"><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></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Copperplate Gothic Light"><span style="font-size:10.5pt;font-family:"Copperplate Gothic Light",sans-serif;color:#1F497D"><o:p> </o:p></span></font></p>
<p class="MsoNormal"><font size="2" color="#1f497d" face="Copperplate Gothic Light"><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></font></p>
<p class="MsoNormal"><font size="2" face="Calibri"><span style="font-size:11.0pt"><o:p> </o:p></span></font></p>
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