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LegalGround >> Homebuyer tax scam


8/7/09 11:36 AM
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Member Since: 3/28/05
Posts: 9852
 
 Tell me why this won't work.  A guy called me yesterday wondering if he could do the following:

Chick owns a home in her sole name and her and her fiancee live there.  She sells the home to him.  He otherwise qualifies for the $8,000 tax credit and claims the credit on his 2009 return while still single.  They then get married in 2010.  They then live in the house just as they were before, but they pocket $8,000 of Obama's money.

It's obviously a scam, but I couldn't find anything in the letter of the law that would prohibit the guy from claiming the credit.

I told the dude that if it was discovered, the IRS would attack the transaction as not being a bona fide sale and that I couldn't give him an opinion that it would work.

The shit people come up with just to scam the system.
8/11/09 4:52 PM
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Dojosensei
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Member Since: 5/19/02
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Fuck the IRS and their stupid asses. If they break up, he still owns the house, she doesn't. It's a legit sale. Is it a bit shady looking, sure. But that's just MY OPINION
8/11/09 9:57 PM
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GladiatorGannon
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Member Since: 9/1/04
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seg -  Tell me why this won't work.  A guy called me yesterday wondering if he could do the following:

Chick owns a home in her sole name and her and her fiancee live there.  She sells the home to him.  He otherwise qualifies for the $8,000 tax credit and claims the credit on his 2009 return while still single.  They then get married in 2010.  They then live in the house just as they were before, but they pocket $8,000 of Obama's money.

It's obviously a scam, but I couldn't find anything in the letter of the law that would prohibit the guy from claiming the credit.

I told the dude that if it was discovered, the IRS would attack the transaction as not being a bona fide sale and that I couldn't give him an opinion that it would work.

The shit people come up with just to scam the system.


I thought it was normally legal to organize your affairs in a manner that minimizes your tax burden. (not my field tho).
8/13/09 11:18 AM
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Member Since: 3/28/05
Posts: 9894
 I think it does comply with the letter of the law, but not the spirit.  They could close on the sale in 2009 and he could dump her ass the next day and never get married.  That gives it some validity.  But, this is all part of a prearranged plan to game the system, so it's not something I want to be a part of.

If it somehow comes up on audit, I think the IRS will raise the bona fide sale argument and make his life suck even though he might win at the tax court level.

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