Posted by JohnBoy on December 04, 2000 at 14:00:01:
I don’t know about you, but when I lease option a property my “intent” isn’t to SELL the property. My “intent” is to LEASE the property which exactly what I did. I may have given an option to the tenant to buy the property, but in my “opinion” that doesn’t mean my “intent” is to SELL. My “intent” is to get it LEASED in a hurry for MAXIMUM rental income by offering an “incentive” of giving an “option”, that’s it! An “option” isn’t a SALE and doesn’t “obligate” anyone to BUY. It merely gives them the “option” to buy and whether the tenant’s “intent” is to buy or not has nothing to do with my “intent”, which is to LEASE the property. The ONLY thing that I SOLD in this case would be the “option” which I was PAID for by the tenant paying me consideration which would be claimed when the tenant exercises the option or the option expires.
In my “opinion” the option doesn’t prove “intent” to SELL, it proves “intent” to LEASE by offering the tenant the RIGHT to buy, not the OBLIGATION to buy at some future date.
Whether the IRS has any rulings pertaining to this I wouldn’t know, but proving what one’s “intent” was in my opinion leaves a lot of argument to dispute it.