I would like to pay my relative off over time, without accruing large amounts of interest. We already have a set amount that I will pay, but neither of us wants the interest to get too high. Can we do this without involving the IRS? What's the best way?
2007-07-10 04:07:19 · 2 answers · asked by Sean J 1 in Business & Finance ➔ Renting & Real Estate
Nope, the IRS will get their due.
You have no direct tax liability as purchaser, but the seller MUST claim all interest paid. Additionally a portion of the payments will be considered as capital gains for them and they will have to pay the CG tax on that, assuming that they're selling the property at a gain.
2007-07-10 04:11:53 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 0⤋
The IRS will have to be involved.
To cover both you and your relative please get a real-estate lawyer involved to make sure all contracts are legal. Money matters and relatives do not mix well. Things could turn ugly fast and you want to cover both of you.
2007-07-10 11:17:28 · answer #2 · answered by Robin C 5 · 0⤊ 0⤋