Expert: taxman at centa.com
Date: Monday April 04, 2005
Time: 10:54 AM -0700
QUESTION:
If a seller sells non-owner occuppied real estate and agrees to add $20,000
to the selling price (but actually sells the property for the amount less
the $20,000) so that the lender will be able to provide a loan at a lower
down payment to the buyer, is the seller liable for any kind of gift tax or
any other tax liability in addition to the capital gains tax from the sale?
==============================
david ingram replies:
Forget about gift tax, what you are suggesting is very illegal even if you
do know several people who did the same thing.
In most states and provinces it would be prosecuted under "obtaining money
under false pretences" or some similar legislation.
If the purchaser does not pay his mortgage payments and the lender finds out
what you did to make them loan money to an unqualified buyer, you can be
prosecuted for fraud. (i.e. - the lender would NOT have loaned the purchaser
the money but for your fraud and deceit.
==========
Answers to this and other similar questions can be obtained free on Air
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for more information.
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