Legal Question in Real Estate Law in California

Remember you might want to take a mortgage on the home someday and gain the benefit of the mortgage tax deduction which you would only be able to do as an individual. You might also be liable for gift tax if you take title in the name of some other person or entity. Also, if you take title in the name of the nonprofit, you would have to use the home for educational/charitable purposes and if you were to reside there while claiming a nonprofit's exemption from property tax you would be defrauding the county tax assessor. Also if you are planning to take title other than in your own name for some other fraudulent purpose, for example if someone is presently suing you, this would be discovered and corrected.

Ann;

There is a distinction between what you can do, and what is wise. Using a nonprofit organization that you control to take title to a home you buy for cash with personal funds, or for your personal use, or where you would expect someday to sell and pocket the sale proceeds, would at best be a documentation nightmare and at worst could lead to litigation, disqualification of the nonprofit for tax exemption, or an investigation by the attorney general. I'd advise keeping your affairs separate from those of the nonprofit.

As to buying a home for cash in a company name, this sounds a little more prudent, assuming you own and control the company and the company's purpose and other affairs are not incompatible. Many buyers of income property, for example, take title in the name of an LLC created for the purpose of owning and managing that property, or several similar properties. There are some costs, but the investors seem to think it's worth it for the risk reduction obtained, and perhaps a degree of anonymity.

When planning such a purchase, be sure that the offers you make disclose that you may take title in the name of an entity as your nominee. The true name of the buying entity should not come as a surprise to the seller and the agents on closing day.

Also, I understand you plan to pay cash, but you should at least consider that if the home is owned by an entity, any borrowing against the property in the future would be in the name of the entity, perhaps with you as a guarantor. Also, the entity would be doing any leasing, collecting the rents, etc.

Finally, be forewarned that if you are hiding assets or laundering money, or otherwise trying to conceal your identity, there likely will be ways that your identity can be determined.