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ScottyMacEsq
ScottyMacEsq, Attorney
Category: Legal
Satisfied Customers: 16344
Experience:  Licensed Texas General Practice Attorney
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I want to sell my house to my son and then my son leases the

Customer Question

I want to sell my house to my son and then my son leases the house to me. How can I set it up without raising a red flag for the IRS? Do I need an accountant, a lawyer or both?
Submitted: 1 year ago.
Category: Legal
Expert:  ScottyMacEsq replied 1 year ago.

Thank you for using JustAnswer.

An accountant would be a good thing, as you'd need to document what you sold, to whom, when, etc... and be able to account for the proceeds that you receive. Assuming that this is not a short sale situation (in which you would need bank approval and can't do a "lease back") you can certainly do so. It would need to be an "arms length transaction" on both sides (sale and lease) for it not to raise any red flags. That is, you need to sell it for fair market value, and you need to lease it for fair rental value. If you sell it for anything less, the difference between fair market value and the sales price will be a gift. And if you rent it for anything less, the difference will be a gift from your son to you, and would need to be accounted for.

It would be good to go through a realtor to do this, as he/she could run the numbers, set up the sale and lease, transfer, etc... An attorney wouldn't be required.

Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable. Please note that I don't get any credit for the time and effort that I spent on this answer unless and until you rate it positively (3 or more stars). Thank you, ***** ***** luck to you!

Expert:  ScottyMacEsq replied 1 year ago.

Did you have any other questions before you rate this answer?

Expert:  ScottyMacEsq replied 1 year ago.

I see that you have not responded in some time. Please note that this question is still open until you rate it. I believe that I have answered your question, but if you have any other questions, please let me know.If not, and you have not yet, please rate my answer. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, ***** ***** good luck to you!

Expert:  ScottyMacEsq replied 1 year ago.

Was there anything else? Again, please note that this question remains open until you rate it 3 or more stars on your screen.