Taxes From Sale / Buyer With No Money Down
Hello, I have this question. I am selling a property. And we have to pay the taxes on difference between purchase price + fixing price + closing price and selling price. Lets say (as an example): We paid 50,000, fixed for 10,000, sold for 100,000 and paid about 10,000 in closing/real estate expenses. So we have to pay taxes on 30,000 - this is clear to me. The buyer offers to buy for 105,000 with us paying 5,000 toward closing cost. The total amount will be the same - 100,000. Does taxes will be the same? Also, what is the reason for him to offer this? Thank you for your time.
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Yes, your net profit in the scenario you describe is still $30K and your tax liability will be based upon that number.
A higher purchase price means a little larger mortgage loan, and with you paying the closing costs, the buyer brings less of his own money to the settlement table.