Buying House $1

**Murdocc** · 09-23-2008, 10:07 PM

Hey everyone,

I am purchasing a home from my in-laws for $1. What a blessing from family. There are many different ways to buy a home like this.. can anyone chime in on advice.

Docc

**Lady_V** · 09-23-2008, 10:13 PM

I'm not sure what you are asking for advice on...

**fuzzybunny** · 09-24-2008, 12:44 AM

I have heard Dave Ramsey talk about this on his radio show and he always says its a bad idea and to check with a lawyer and/or acountant first.

Somehow I suspect that it will make your taxes a horror next year. Uncle Sam is not going to allow your in-laws to essentially give you a gift of that magnitude without getting their piece of the pie.

You don't want to find out later that you or your in-laws will be taxed on the value of the gift and not it's actual price. I don't know what currently gift tax rules are (don't know anyone to give me such a gift) but if Uncle Sam expects 20% or more then you could be in a world of hurt later. Especially if it doesn't come to light until years later via audit, divorce etc. Then you will owe the intrest on top of it.

Seriously, pay for the professional help.

**suki** · 09-24-2008, 11:08 AM

If your in-laws are elderly, then this could be a very big mistake on their part.

Should they require serious medical care (nursing home placement or the like), there is no insurance and Medicare does not cover long term health care. Many deplete their personal funds and rely on Medicaid. In the qualification process for Medicaid there is a five year look-back period and they would be penalized for giving away that asset. This could cause long-term financial hardship for the family.

Please, consult an attorney.

And, fuzzy bunny is correct about tax implications. I believe the current limit on tax-free gifting is $11,000 per individual. But that could be researched easily enough.

**Greebo** · 09-24-2008, 11:31 AM

Yep, agree with the above. Consult a real estate and tax attorney.

**Laurie in Bradenton** · 09-24-2008, 05:47 PM

My middle sister recieved a house in an estate that she worked for and tried to gift it to my little sister for a $1.00 and the IRS really screwed it up. Middle sister ended up selling her the house for below market value as a destress sale. Then middle sister held the papers, little sister made down payment of 1,000.00 and middle sister never got another dime.
Its up to the home owner to after non-payment since middle sister doesn't choose to the IRS has no leg to stand on.
See an attoney and they'll verify that. The IRS can't force you to collect money from someone. You just write it off as a bad debt or let it fall by the wayside.

Laurie in Bradenton