Is that this authorized - Mortgage query

plansimmer wrote: ↑Wed Sep 04, 2024 9:59 am

crre wrote: ↑Wed Sep 04, 2024 9:31 am

plansimmer wrote: ↑Wed Sep 04, 2024 9:08 am
The house I dwell in is co-owned by my dad and myself (50/50) however the mortgage deed is in my dad’s title however I’ve been paying the mortgage all these years. I wish to re-finance and take away him from the Mortgage deed. Present Mortgage quantity is $200,000
After just a few months, I wish to buy the property from my dad for $500,000 (truthful market worth). This might allow him to get a piece of cash ($250,000 or 50%). I might get $250,000 – $200,000.
Is that this legally allowed. So far as I am involved (with my restricted data on this!), I am serving to dad get some fairness of the home minus the capital positive factors after all.

it appears like you might be asking whether it is authorized so that you can buy your father’s dwelling. why do you assume this may be unlawful?

Simply paranoid
My pondering is would IRS have a look at this transaction in another way.

Assuming you may get the financing, and so on., to really pay for the home, it should not be any completely different than, say, if two enterprise companions co-owned a property, though there’d most likely be some particular enterprise/inter-personal preparations if just one was formally “on the mortgage”.

So long as you might be paying “truthful market worth”, the connection does not matter.
(Questions come up when somebody needs to promote a home to a relative for lower than truthful market worth, for instance, which is not your scenario. In that case, there could be some form of gifting/and so on., even when it seems hidden.)

As junior requested above, why the two-step course of?

And what do you imply that *you* “I might get $250,000 – $200,000″ ?
Should you “pay” $500k for the property, then your father would get his $250k (topic to tax, as you acknowledge). You’d have paid off the mortgage of $200k, which is lower than $250k. So why would you be needing the complete $500k to buy it?

Would not you simply want $450k, with $250k going to your father and $200k paying off the mortgage? (There could also be some charges, and so on. however that is rounded, and so on.)
You’d then have roughly $300k in fairness in the home, at that cut-off date: $500k worth much less the $200k mortgage you’ve simply taken out in your individual title.

plansimmer wrote: ↑Wed Sep 04, 2024 10:06 am
Sure, we’ve been fine-tuning it to see what’s the greatest path for each me and pop to maximise cash for each of us, legally after all.

I do not perceive the problem of “maximizing” the cash.
There may be the market worth and the mortgage quantity. IF you each agree that you simply owned the home 50/50, then the above association is what is acceptable.
I am not clear about what “different” method this may/could possibly be finished to get more cash.

RM