Property Q&A in Minneapolis>Question Details

Mntraveller, Home Buyer in Minneapolis, MN

What is the logic in not allowing a child to buy a parents house and not getting the $8000 tax credit?

Asked by Mntraveller, Minneapolis, MN Wed Aug 12, 2009

The house would be sold a market value. Why is it different than any other sale?

Help the community by answering this question:

Answers

4
Mntraveller,

I must agree with Aaron - "Arm's Length" is key to the transaction and the author's of the bill certainly felt this was an important aspect to this law. Here is a wiki article about the Arm's Length legal concept.

http://en.wikipedia.org/wiki/Arms_length

Cameron Piper
#1 Trulia Agent in MN
Web Reference: http://www.campiper.com
0 votes Thank Flag Link Wed Aug 12, 2009
While people like to call our government stupid, I believe that the biggest reason is the concern that everyone would simply "buy" their parents' or relatives' house but not necessarily change possession. Family to family transactions are not considered "arms length" transactions.
0 votes Thank Flag Link Wed Aug 12, 2009
The government and logic don't always go together. I would guess this is similar to the rule that states family members can't buy a foreclosed home or short sale as there would be a conflict of interest. That way one doesn't intentionally stop making payments so another family member could benefit.

Hope this helps, feel free to contact me directly with any further questions or if you need help with your search.

Have a great day!
Web Reference: http://JoelFridayHomes.com
0 votes Thank Flag Link Wed Aug 12, 2009
Logic? You expect logic from the Federal Government? The only thing I can think of is that the designers of this bill thought it would be most unfair if your parents sold you their house. Why not have them sell it to a friend, and after that, you buy it from the friend? I think that would work. I am not sure, talk to a Real Estate attorney.
0 votes Thank Flag Link Wed Aug 12, 2009
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer