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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
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Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I am selling a cabin on government land, which is sold as personal

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I am selling a cabin on government land, which is sold as personal property but taxed as real property. The buyers want all the furniture, appliances and accessories +. I do not want to seperate this out in the contract, Is it legal in the contract if I make a statement that the buyers will gift me $13,000 each for a total ot $26,000 for misc items.

Thanks
Rochelle Fleming XXX@XXXXXX.XXX
Submitted: 2 years ago.
Category: Tax
Expert:  Megan C replied 2 years ago.
Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Thanks for your question -

You don't have to separate all of this out in the contract, but you can't stipulate in a contract that someone is giving you a gift. Then, the payment is no longer a gift.

Not only do you not need to put this in the contract, you will have a separate bill of sale for the furniture. You won't owe sales tax because it's resale of personal property. You probably won't even owe income tax on this either because chances are the agreed upon sales price for your furniture is far less than what you actually paid for it. Losses on personal property are not deductible as capital losses.

The best thing you could do is simply sell the furniture outside the sale of the home. If they don't pay you for the furniture as promised before closing, then remove the furnishings before closing. If the buyers of the property don't pay up, then it will be very easy for you to sell the furniture on Craigslist to other buyers.

The bill of sale doesn't need to list out each and every accessory. I'd list out the main things like the appliances and big furniture, but then have a catch all line for the knick knacky stuff. Something like:

Fridge
Oven/Stove
King Size Bed
Queen Size Bed
Living room Furniture
Household Accessories

I hope this helps. Please let me know if you need additional clarifications by following up.

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Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 13531
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 3 other Tax Specialists are ready to help you
Expert:  Megan C replied 2 years ago.
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