Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 11-16-2015, 11:36 AM
Junior Member
 
Join Date: Nov 2015
Posts: 1
Tax implication for removing a lien on a property

My wife and I purchased a home from my parents 2 years ago. We financed the transaction privately through them, and have a promissory note to pay the balance of the purchase price of the home. We now are looking to re-finance the home with a broker but have a lien on the house for the value of the promissory note. To complete the re-financing process, we would need to remove the lien from the home. We have been told by our broker we could simply re-convey the lien, receive the re-financing funds, and then place the lien back on the home. Would doing so:

A) Constitute as a gift from my parents?, and;

B) Would property taxes be potentially re-assessed following the filing?

Any advice/help would be greatly appreciated!



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 11-16-2015, 11:03 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,236
Quote:
Originally Posted by cdsk1121 View Post
My wife and I purchased a home from my parents 2 years ago. We financed the transaction privately through them, and have a promissory note to pay the balance of the purchase price of the home. We now are looking to re-finance the home with a broker but have a lien on the house for the value of the promissory note. To complete the re-financing process, we would need to remove the lien from the home. We have been told by our broker we could simply re-convey the lien, receive the re-financing funds, and then place the lien back on the home. Would doing so:

A) Constitute as a gift from my parents?, and;

B) Would property taxes be potentially re-assessed following the filing?

Any advice/help would be greatly appreciated!
A) Constitute as a gift from my parents?, and;====>>>>Yes I think so UNLESS you pay it off ; You can give up to $14K($28K for joint filers, gift splitting allows a couple to increase their total gift tax exemption amount by combining individual allowances.) for 2015 worth of assets each year to as many people as you like gift-tax free; aslongas the amt exceeds $28K; If ONE of them gives a check for between $14,001 and $28K they need to file ONE form of 709with both signatures. If ONE of them gives a check for $28001 or more, then they BOTH would need to file forms of 709 because BOTH of their would be nibbling into the $5.45Million lifetime gift exclusion.
You, as a done, are not subject to nay tax and do not need to file form 709.

B) Would property taxes be potentially re-assessed following the filing?====>>I guess you need to contact your County Tax Assessor’s Office or Tax Collector’s Office for more accurate info in detail; the County Assessor will reassess you property at the time of sale for all of your future taxes that will need to be a reassessment does not necessarily mean that your assessment or your taxes will increase. Furthermore if your assessment does increase, it does not necessarily mean your taxes will increase.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #3 (permalink)  
Old 11-16-2015, 11:30 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,236
Quote:
Originally Posted by cdsk1121 View Post
My wife and I purchased a home from my parents 2 years ago. We fin

A) Constitute as a gift from my parents?, and;
!
Yes also UNLESS they require you to pay it off



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Removing child from joint account richlorn Retirement Planning 1 01-15-2015 09:52 PM
When will the IRS issue a Tax Lien and under what circumstances will they release the Tax Lien? TaxGuru For 2013 0 08-26-2013 01:09 PM
Federal Income Tax Lien on Property/Partnership quinzoto Income 1 07-06-2010 12:16 PM
Tax Implication for sale of adjacent lot on Principal Residence? TaxGuru Capital Gains 0 07-24-2008 12:47 PM
What is the implication if I sell property that has been gifted to me? Kathy Trusts and Gift Tax Returns 1 07-20-2008 02:28 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning