Booo
Confused about dryer sheets
I retired 6 months ago when I turned 59. We just bought a manufactured home in a gated adult community in Florida and paid cash. 8 years ago we paid, in round numbers, $150,000 for a home in Ohio. I owe $70,000 on the mortgage. I would like to help my son get in to a house and thought I could sell him this one for what I owe on it with a 'note' that he pays me my current equity of $80,000 when he sells the home in the future. I know there will be adjustments to the equity figure after an appraisal is done and closing costs are figured in. The home is sure to appreciate in value as shale oil and natural gas mining along with a multi-billion dollar ethylene cracker are coming to the next county soon.
I was told I would owe a gift tax if I don't sell at close to the appraised value. I was also told he may owe a capital gains tax on the equity when he sell the house. Are either of these statements true? Would the IOU negate the gift tax and/or the capital gains? Is it even legal for him to hold a 'note' for my equity when he sells? It could be 20 years from now. Is there a better way to get him in the house cheaply? I had plans to talk to a real estate lawyer but know you folks have the knowledge to enlighten me as to what questions I need to ask. Thank you in advance.
I was told I would owe a gift tax if I don't sell at close to the appraised value. I was also told he may owe a capital gains tax on the equity when he sell the house. Are either of these statements true? Would the IOU negate the gift tax and/or the capital gains? Is it even legal for him to hold a 'note' for my equity when he sells? It could be 20 years from now. Is there a better way to get him in the house cheaply? I had plans to talk to a real estate lawyer but know you folks have the knowledge to enlighten me as to what questions I need to ask. Thank you in advance.