seller offering REPAIR CREDITS
Hi,
two deals i'm working on. Each will offer between 10 - 14k repair credit. They sell as-is and will give me a check at closing to repair the buildings flaws.
Is this taxable or normal?
It would probably depend on the way the contract was written. If it is loaned money, then you probably won't have to pay any taxes, ie your borrowing more than you need to pay the seller.
This is a question best left to your tax advisor, though, as they will be able to give you specific info regarding this deal.
good luck
Roger
Your cost basis is your net purchase price. Buying for $75K with a $15K repair credit, makes your cost basis $60K. The repair credit is not "taxable" income.
When you sell this property, your taxes will be based on any profits that exceed your $60K purchase price.