Selling a Home to a Family Member — What Should You Know?

Photo by Kelly Sikkema on Unsplash

Did you know that it’s possible to sell your property to your child for a dollar? As interesting as that sounds, this article on tax goes into the nitty-gritty of such a transaction. Typically, many people believe in the advice that there are more disadvantages than pros in going into business with a family member. Selling a home to a family member is a business transaction that is likely to turn south quickly no matter how close you are, even when you’re selling it to your twin. That is why you need to know a few things before going ahead with the deal.

The Legality of Selling a Home to a Family Member

According to the IRS, people only sell houses to a family member as a way to avoid paying tax, and that’s when such an activity becomes illegal. It is possible to sell the house to your relative legally by following the proper channels. Sometimes shaking on a deal or expecting the other party to keep their word can end up being expensive tax-wise, and so it’s vital to do the transaction legally.

Please expect that the tax authorities will shine a bigger torch your way for such business deals because they smell tax evasion.

What You Need to Sell a House to Your Relative