Posted by Sue(NC) on May 13, 1999 at 20:04:29:
We did have the ‘race-to-sell’ situation in a house we had lived in for 2 years, then rented for 2.5 years- we needed to sell within 6 months or displace our tenants to move back in (if we wanted to preserve our untaxed gain).
But this wouldn’t be the case with an owner-occupant.
Legal question - When is a sale a sale? - Posted by Michael Murray
Posted by Michael Murray on May 13, 1999 at 11:40:18:
I have a seller who needs to sell her house by the end of May to beat the 2yrs out of 5yrs occupancy deadline for capital gains. If I am working on different purchase schemes e.g. L/O, Owner Finance, Contract for Dead, etc., and there is little chance of closing before May 31, how can she register a “sale” in the eyes of the IRS before we actually close? I’m sure someone here has run into this before.
Thanks,
Michael Murray
Re: Legal question - When is a sale a sale? - Posted by Dave T
Posted by Dave T on May 13, 1999 at 20:43:03:
The date of the sale is generally the earlier of the date “a deed passes (the date of delivery of the deed) OR at the time possession and the burdens and benefits of ownership are transferred to the buyer” [Rev. Rul. 69-93, 1969-1 CB 139].
Re: Legal question - When is a sale a sale? - Posted by Irwin
Posted by Irwin on May 13, 1999 at 19:37:42:
Maybe I’m missing something, but I don’t understand why the seller has to sell in order to “beat” any capital gains deadline. I think the rule calls for living in the house AT LEAST two out of five years, not AT MOST, so why does it matter if it takes longer than two years to sell it? Are you sure there’s really a tax problem, or is this a sales tactic to get you to move quickly?
Re: Legal question - When is a sale a sale? - Posted by Bassman
Posted by Bassman on May 13, 1999 at 17:48:33:
Micheal , Sounds “motivated” to me just ask for the deed , then go from there , offer as little as you can possibly give . Its their problem , not yours . You are the problem solving technician . Remember this
" I will NEVER beg to buy someones house " They either want/have to sell or they dont . SW SW SW SW --some will, some wont , so what , someones waiting (not mine).
Good luck
Just my thoughts
Re: Legal question - When is a sale a sale? - Posted by JHyre in Ohio
Posted by JHyre in Ohio on May 13, 1999 at 16:00:48:
Generally, when title passes. There are exceptions if the “seller” still has the benefit of the risks and rewards associated with the property- then considered “sold” when burdens (paying for insurance, assuming risk of loss, etc.) and benefits (profit potential, right to rents) pass. Typically, but subject to exact terms:
L/O- sold when exercise occurs
Owner Finance- when title passes
Contract for Dead- Upon burial;
Land Contract- REALLY depends on the terms.
Basic rule- transfer title and benefits/burdens of ownership. If you retain “too much” profit potential or risk, no sale.
John Hyre
Re: Legal question - When is a sale a sale? - Posted by JohnBoy
Posted by JohnBoy on May 13, 1999 at 12:28:30:
Selling on “contract for deed” will qualify for the exemption on any gains.