Subject 2 tax question - Posted by Chris

Posted by Dave T on December 11, 2003 at 22:07:12:

I would say no. In your subject to deal, you are taking over a mortgage loan for more than the property’s market value and receiving cash to make up the difference. Sort of like taking out a 125% loan on a $100K property – excess cash from the loan is not taxable income to you.

Since the seller has negative equity, they are giving you cash for their equity. You would reduce your cost basis accordingly.

Just my opinion.

Subject 2 tax question - Posted by Chris

Posted by Chris on December 11, 2003 at 21:42:20:

If I take a house over sub2…the seller is upside down…if they give me $20k vs paying $20k toward thier mortgge…is it taxed any different???..Either way I net the same…I just get the use of the $20 k now