Posted by Lynn on November 08, 2000 at 18:27:23:
The amount of your mortgage has nothing to do with his capital gains tax unless you inflate the “purchase price” on the contract in order to get the larger loan. If you are inflating the cash price and he is giving you cash back outside of closing you could be guilty of loan fraud…Be careful!
Just remember that it is the purchase price, not the mortgaged amount that is important for figuring the tax liability.
Happy Investing!
Lynn
Capital Gains??? - Posted by Mike
Posted by Mike on November 08, 2000 at 11:10:21:
A wholesaler finds me a house, I buy it [ i.e. mortgage it] within 30 days for a price say 20k higher than his selling price, coz there is good equity. Is he exposed to capital gains on the difference between his selling price and the mortgage i am obtaining? Am I even asking the question right?..LOL
The arguemnt is that he is offering the property for sale say at 20k, I got it apprasied and is obtaining a mortgage of 40k. Is there a capital gains exposure here at all??
Thanx in advance and good luck to all !!!