Posted by JohnBoy on July 23, 2004 at 10:16:03:
In a contract for deed the buyer DOES get to take the tax deductions. The buyer is paying the taxes.
Now unless CT has some specific law stating otherwise, this attorney is full of BS!
The best way to resolve issues like this is to simply ask the attorney to provide you with the specific statue that says a buyer cannot take tax deductions when buying on a CFD. My guess is that there is none.
contract for deed - Posted by Konrad
Posted by Konrad on July 22, 2004 at 21:42:35:
We are working with a buyer who is considering buying a property from us on a contract for deed. We originally took the property subject to the existing mortgage. The property is currently in a land trust with beneficial interest assigned to our LLC. According to the buyer’s attorney, the buyer is not entitled to tax deductions when purchasing on the contract for deed. This is contrary to everything I’ve learned, so far. Is his attorney correct or is he just using this as a negotiating tactic to lower the price? The property is located in CT.
Thanks for help.
Konrad
Allocation of tax benefits - Posted by John Merchant
Posted by John Merchant on August 03, 2004 at 10:44:37:
You should be aware that tax deductions can be allocated, by agreement between the parties, just like any other aspect of RE ownership, so this should be treated just like any other asset.
If B wants it, then sell it to him, by specific agreement. If he doesn’t want to pay for it, keep it to yourself by specific K language.
Lots of P’ship agreements allocate tax benefits between the P’s, where one is getting the deductions, etc.
e.g.: in deals where a SDIRA is a partner, since it cannot possibly use the tax deductions, it specifically agrees to allocate those to one of the other Ps. Very common to do so.