Buyout from a home
My friend bought me out of our home we owned. With that money I bought my own home. Will I get taxed for that money? I’m also still on the loan
Terry Says
You should have used an attorney, and documented the transaction. Was it just a return of the money you invested? How long did you own it? Did you make a profit? If so, how much? Was it your personal residence? The answers to those questions determine if there was any tax implication. Basically, if it was your personal residence for two years, and if your profit was not over $250,000, there is likely no tax involved. But ask your accounting professional.
Keep careful track of the cost basis of your new home and any improvements you make to it, which will add to your “cost basis” — so you don’t have any issues when you eventually sell it. But it doesn’t matter where the money came from to buy it, or for the down payment.
