"Subject To" Tax Liability
I wanted to know what the tax liability is on a "subject to" property if I immediately sell the property to an individual. Here is the situation. I am getting a property owned by an individual for 5 years. They are doing willing to give me the property "subject to." I will then sell the property to a buyer and then give the original owner several thousand dollars. If I sell the property for $30K more than the existing mortgage, how much will I be taxed on the $30K and at what rate? Thanks.
What tax bracket are you in?
Whatever your ordinary income tax rate is, will be your applicable tax rate for your deal.