When Have I Bought The Property ?
My question “just when does the IRS consider that I have bought the property”. Easy enough answer when you purchase property from individuals, businesses etc and have a closing. I purchase property at “land tax sales”. Missouri is a lien state, not a deed state. Therefore, at the “tax sale” we pay our money (amount we bid) get a certificate of purchase from the county collector and have to wait a year before we get a “collectors deed” to the property. We get the collectors deed providing we have jumped through the hoops, dotted our I’s and crossed our t’s and the previous owner hasn’t redeemed the property and a host of other things. So, for IRS tax purposes, have I bought the property on the day of the “tax sale” or have I bought it at the end of the year that we have to wait before the county collector issues us our “deed”. I am sure there are other items that need to be considered or mentioned but being new at this forum posting just give me a break and realize you are dealing with a “newbie”.
This forum has given me much insight and I see that I need to hang onto property for a year and a day before selling it. Thank you to all you people who give generously of your time and expertise or just your experiences.
You bought it after the year because it can be reversed before the year expires.
I believe you are purchasing a tax lien certificate, not the property. After the tax sale you own the lien, not the property. You "foreclose" your lien with a quiet title action after the redemption period has expired. Only then will you own the property.
So, your holding period starts on the date you actually receive title following your quiet title action.
Just how I see it.