Yes, your second option is the way to go. You’ve arguably structured an estate planning transaction and not a taxable, arms-length sale. Show him your form that you gave the auditor saying that you wanted to be exempt from a conveyance fee b/c the transfer was only to a trustee.
Also, explain to him that the transfer of the beneficial interest was only a personal property transfer and also not a real property sale.
So, it should be obvious to him that title to the property has not really changed hands.
land trust and seasoning - need solid advice - Posted by Konrad
Posted by Konrad on September 27, 2004 at 13:22:03:
I’ve read all the posts on the land trust / seasoning issues and I am still not completely clear on how to proceed. Here is the situation. Bought Subject-To, put into a land trust with me as Trustee, transferred beneficial interest to an LLC. It’s been about 2-3 months, since I purchased the property. I found a buyer and their mortgage broker is calling to find out how come the transfer was made for a $1. Naturally, the sale price is higher than what I acquired the property for, therefore creating a seasoning issue.
Now, do I:
1.) Reveal the whole situation to the mortgage broker and try to steer him in the direction of getting a loan from a bank that does not have seasoning issues?
OR
2.) Tell him that the property was moved into the trust for estate planning purposes and that there was no actual sale transaction and try to push through the idea that I am acting as Trustee for the original beneficiaries/sellers?
Also, the broker is asking for a document stating the purchase price for the property. What should and/or shouln’t I provide?
Any suggestions as to the best way to handle this situation will be greatly appreciated.