Home Buying in Alamo>Question Details

Anonymous, Home Buyer in Lyndhurst, NJ

Is it property tax fraud if a buyer pays the agent commissions directly and drops the reported sales price of the property?

Asked by Anonymous, Lyndhurst, NJ Wed Jun 5, 2013

The reported sales price of the property was reduced by over $100k by removing the agent commissions from the purchase agreement and putting it into a side contact.

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This doesn't sound right at all. Agents are not allowed to accept a commission directly...it must be done through their brokers....
0 votes Thank Flag Link Wed Jun 5, 2013
I'm not sure how the IRS would look at it: For both parties.
You have to decide it you want to ask permission first, or pardon afterward.
0 votes Thank Flag Link Wed Jun 5, 2013

This is a legal question best answered by a CPA and/or tax lawyer based on the actual documentation and facts.

0 votes Thank Flag Link Wed Jun 5, 2013
Property taxes are based on assessed values. Often with the recent sale of a property, the sales price becomes the assessed value. But, that is not always the case. If the assessor determines that the price paid does not reflect current value, they can assess the property higher (or lower). This happens often when distressed properties are sold.
Good luck,
0 votes Thank Flag Link Wed Jun 5, 2013
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