l/o 30 years, how does irs find out, and call it a disgiused sale. - Posted by Robert

Posted by Laure on June 13, 2000 at 22:11:04:

If either of you were audited, the IRS could require you to produce all documents involved in the trasnaction.

Laure :wink:

l/o 30 years, how does irs find out, and call it a disgiused sale. - Posted by Robert

Posted by Robert on June 13, 2000 at 18:41:38:

HOW DOES THE IRS FIND OUT THAT A PERSON IS LEASE OPTIONING A HOUSE FOR A LONG TERM OF SAY: 30 YEARS WITH AN OPTION TO BUY AT THE END OF THE TERM FOR 1 DOLLAR, AND CALL IT A DISGIUSED SALE.

TO ME THERE HAS GOT TO BE A WAY TO KEEP THEM FROM FINDING OUT, SOMEBODY PLEASE LET ME KNOW IF THERE IS SOME WAY FOR THEM NOT TO DETECT IT!!!
THANKS,
ROBERT

Won’t help you commit tax fraud - Posted by Dave T

Posted by Dave T on June 15, 2000 at 11:14:30:

Are you are asking us to help you commit tax fraud? Sorry but I won’t help you.

How about an IRS AUDIT!! - Posted by Soraya(SanDiego)

Posted by Soraya(SanDiego) on June 14, 2000 at 01:14:30:

If you were in an IRS audit and they investigated the transaction they may deem that it was a Conspiracy to defraud the IRS. That is a felony which is five years in jail and a $5,000 fine.

Soraya

You can’t have your cake OR enjoying eating it. That just the IRS. - Posted by Bill Gatten

Posted by Bill Gatten on June 13, 2000 at 22:10:05:

Robert,

A VERY humble suggestion for your situation?

'No way NOT to ever detect the seller’s gain, but “A” way to accomplish the objectives and make the "detection worth it. A third party co bene. land trust brings the “optionor” a lot more per month pre-tax, while costing the tenant a lot less per month…after-tax.

At the inception, the property would not be optioned or sold; but would instead be placed into a title-holding land trust whereupon the lease tenant is given a beneficiary interest in the trust. The tenant would then lease without an Option from the trustee on a triple net basis (i.e., paying a monthly rent equivalent to the costs of tax, insurance, principal and interest and a much better positive cash-flow to the Settlor).

By doing it this way, there has been no sale of the property, and no Option is needed to accomplish the desired result. The contract merely provides that at the end (2 or 20 years later), the resident beneficiary will have the first right to purchase the property (if he wishes) at its then Fair Market Value…(albeit) LESS any monies owed thereto by the trust.

In this process, the structure of the agreement shields the title from almost everything you can think of. Neither party has to rely on the other?s not to screwing up the title along the way./ Neither can borrow upon or encumber the property. Neither can get it embroiled in their personal defugalties or legal matters; and the tenant receives 100% of ALL the incidents and benefits of ownership, without waiting for 20 years (including full tax deductions, equity build-up, appreciation, and the like). And…no sale takes place until the trust terminates and the property is sold or purchased by the resident beneficiary.

Now, I suppose when the seller has to pay the piper upon sale at the end, he can exchange his interest in the trust via a 1031 like-kind tax deferred exchange (assuming he’s saved enough of his windfall for the Boot) re. his profit and equity he may have carried (Rev. Rul 92-105).

For whatever its worth.

Bill Gatten

Re: l/o 30 years, how does irs find out, and call it a disgiused sale. - Posted by JohnBoy

Posted by JohnBoy on June 13, 2000 at 19:50:57:

Eventually when the sale goes through this will be reported and showing a house sold for $1 when it is worth say, $100k, it’s not going to look to good and all those late fees and tax penalties for all the previous years you were collecting money as a covered up sale is going to kill you.

How does IRS find out, and call it a disguised sale? - Posted by Dave T

Posted by Dave T on June 15, 2000 at 10:54:38:

  1. Audit – either seller or buyer.
  2. Informant – Rival investor, ex-spouse, scorned lover, anyone you may have bragged to that wants a reward.