Re: Tenant/Partner Pays Renovation Costs

Re: Tenant/Partner Pays Renovation Costs by Jake on March 22, 2012 @16:53

Call the IRS, tell them what you and your boyfriend are doing and ask them what to do. More than the complications you mentioned, both of you are going to pay capital gains taxes too or at least a gift tax as money is passed from one who is property owner to the other who is not. Good luck on selling the place for more than you paid for it. A lot of home owners are not that lucky anymore.

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Re: Tenant/Partner Pays Renovation Costs by Anna Mouse on March 22, 2012 @19:17	[ Reply ]

Actually there is a rule not sure of the exacts but if you live in the property for a certain amount of time you are exempt from paying capital gain taxes. It might be 3 years. Something like: if you own rental property and move back in for 3 years your exempt.

Re: Tenant/Partner Pays Renovation Costs by Jake on March 22, 2012 @19:43	[ Reply ]

"At end of a year we sell it, each getting back on intial investment and split the profit 50/50." Their plan is way short of three years. And, the one living in the place is not the property owner. It is the handyman boyfriend. Their plan is to pay market value, put money into it and sell it for a profit. You can tell they have never done this before. Even it they lose money, the whole scheme is fraught with tax liabilities that they plan to skirt.

Re: Tenant/Partner Pays Renovation Costs by Cindy (TX) on March 22, 2012 @20:25	[ Reply ]

Thanks - was simply asking for input, not snide accusations. It was bought at way below market value, tenant is more than a handyman, a contractor with renovations done at cost. No plan to skirt anything. Everyone should fall into a deal like this.

Re: Tenant/Partner Pays Renovation Costs