Legal Question in Real Estate Law in California
Purchasing Home Below Market Value
Would there be any tax implications, or is it legal, if I were to purchase my grandmothers house for $50,000, when its market value is around $600,000. Thank you.
2 Answers from Attorneys
Re: Purchasing Home Below Market Value
Yes, it may be considered a gift, with possible gift tax implications (depending on the remainder of the estate). You may also loose the step up in basis upon her death which could increase subsequent income taxes.
Re: Purchasing Home Below Market Value
In addition to what Mr. Selik said, the property will probably be reassed for real property tax purposes. Further, to insulate yourself from claims of financial elder abuse (assuming your grandmother is over 65 years old), it would be advisable for both of you to retain separate counsel to advise you concerning this matter.
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