Changing ownership on recent purchase (2d try) - Posted by David Hanson
Posted by David Hanson on August 01, 2003 at 13:06:38:
The below message was originally posted a week ago at http://www.creonline.com/legal/wwwboard7/messages/17541.html , and I’ve still received no replies on or off board…does anyone have any insights? They would be most appreciated…the state is WA, but I doubt it would vary much elsewhere…
I purchased a foreclosure in late Feb 2003. At that time, my friend was interested in buying the home and living in it after it was fixed up, but his family situation kept him from committing. So, home was purchased in my name only.
Now, friend is able to committ. I would like to transfer title to him, let him fix it up, and have him and have him reimburse me for my cost with the proceeds of an OO-loan.
(No need for the well-intentioned warnings about extending this temporary bridge loan–suffice to say a variety of reasons make me comfortable with this arrangement.)
I could handle this as a straight sale at cost, I suppose.
Here in WA, I think that RCW 82.45 and 82.46 cover me on the excise taxes that would otherwise be due. From page 3 of http://www.dor.wa.gov/Docs/Reports/2002/Tax_Reference_2002/REET.pdf :
“credit for the amount of tax paid upon single family residential property, if the property is transferred to a real estate broker or other party who within nine months resells the property.”
However, I would rather simply do some kind of quit-claim or title correction, perhaps by adding him, then removing myself. I just don’t want to rise eyebrows with the IRS or anyone else…
Please let me know if this scenario is unclear, and TIA for your advise on this!