Home Buying in Canby>Question Details

Bridget, Other/Just Looking in Oregon

I'd like to purchase my mother's home (lump sum now and monthy income for years to come). How?

Asked by Bridget, Oregon Sat Feb 14, 2009

Are there any tax implications as I would let her continue to live in the home? What should I be worried about?

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Get a good RE attorney. This is a no brainer however. This will be a contract sale and as long as the terms and conditions are defensible you should be fine. She can not sell it to you super cheap. So you need a fair evaluation. Go to the low end of a fair scale. The IRS can tag you later for taxes. You will be able to write the payments off and she will have to claim the income as taxable but big deal! Have her will you her interest in the trust deed or note if you can.

Sounds like a really nice deal out there in Canby and I wish you the best!


Dirk Knudsen
re/max hall of fame
Re/Max Metro Gold
Web Reference: http://www.theknudsens.com
0 votes Thank Flag Link Sat Feb 14, 2009
Tax questions need to go to an attorney or your tax consultant. I don't know what you would have to worry about. Just make sure you use a title company so that they can prepare the correct documents showing you put so much down and are making payments to her for the balance. You can also do that by making it a "life estate" type purchase if you want. It should be very easy in general though. The title and escrow company should be able to put it together for you. The only tax implication I would see is that your mom would have to show a "SALE" of her home. Again, it would only affect her if she is not able to take it under the tax requirements of $250,000 tax gain and has not sold another personal residence and has lived in this at least 2 out of the last 5 years! I hope that helps!
0 votes Thank Flag Link Sat Feb 14, 2009
Hi - It's a real simple process that pretty much any Title Company can help you with. They can write a Note and Trust Deed based on the terms you set for the purchase and record the deed transfer for you. Fees should be pretty minimal. I would recommend that you also have the Title Company set up a payment servicing company that you make your payments through, and they are then responsible to get the payment to your mom. It's fairly inexpensive and gives you a definite record of payments you make so that you can provide that info to your tax preparer. You should be able to claim it as a 2nd home and deduct the interest and maybe maintenance/repairs you make to the property....good questions for your tax person though to verify.

Hope that helps!

Kelly Gebler
Real Estate Broker & Residential/Commercial Loan Officer
Commonwealth Group & Sunset Mortgage Co.
Ph: 503-516-1637
Email: LetUsGuideYouHome@comcast.net
0 votes Thank Flag Link Sat Feb 14, 2009
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