Assume I helped someone prior to forclosure and gave 30K to them and added my name to title so they coud get out of forclosure status. In the contract agreement I state if they do not make payments I have right to take over currrent mtg. and sell the property. What are my taxes based on in this situation? They owe 900,000 in mtg combined plus my 30K and assuming I sell this house for 1.2mil after a few changes and upgrades to the property. Will I be taxed on the difference of 300K? or am I wrong in this tax consequence. I never intended on owning this property, but I do now. please advise. property is in ca.
2007-01-29 10:59:01 · 1 answers · asked by ptrip6 1 in Business & Finance ➔ Taxes ➔ United States
Your cost basis would be $930,000 -- the assumed $900,000 mortgage + the $30,000 paid on behalf of the owner. If you sold it for $1.2 million (net), your gain would be $270,000.00. If you held the property for less than 1 year it would be taxed as ordinary income.
2007-01-29 11:36:58 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 0⤋