Tax Implications For A Family Owned Property
I am buying a 4-flat with a vacant lot next to it, same owners for both. The family has owned the properties for over 50 years.
I want to pay cash for the land and finance the building...as its very difficult to provide financing for land...especially when its $300K.
The sellers attorney is telling me the deal must be rolled into one. He said if he sells the vacant lot separate from the house..the family will have to pay "short term gains taxes" on the property, because they filed for a separate property identification number a year a half ago.
I think this lawyer is on drugs to think this way..He is thinking they have acquired this property simply because they separated it from the their home site.
Somebody please correct me or the lawyer.
Thanks
Why can't the sale be as the attorney wants (one deal) and you do what you want (seek financing only for the building and pay cash for the lot)?
Thanks for replying to my post.
I am going to be building a 4 flat on the vacant lot. But, if I finance the building..a lien will be attached to the vacant lot. In Cook County in Chicago...it is a HUGE pain in the rear to remove the lien from the vacant lot.
So, if I can keep it two (2) separate transactions...that would help get the deal done.
Get the two deeds as you would like. Finance the builing it and then at the same time have the sellers deed you the other lot for $1. Now you have 2 seperate deeds and the seller has no extra tax liability.