Temporarily Disqualified (sales, real estate, foreclosures)

[Langerhans]

I look at real estate on the Mecklenburg County's Preperty Record Search from time to time.

( https://property.spatialest.com/nc/mecklenburg/ ). I see that some properties' sales status is listed as "Temporarily Disqualified". I looked up the term but the gobbledygook explanation is impenetrable. I did discern that possible illegal transactions may be involved. Can anyone tell me what this term means?


Also, is this a new website to replace the old one that gave more information such as previous owners? I can't find the other website.

[swampfoxer]

Try Polaris 3G.

[Langerhans]

Originally Posted by swampfoxer

Try Polaris 3G.

Thanks for the link. It's useful.


But does anyone know what Sales Status Temporarily Disqualified means?

[Charlotteborn]

It means it wasn't an arms length sale.

[getatag]

Something about sales amount is not indicative of appraisal for tax purposes, therefore it's temporarily disqualified for inclusion in the appraisal base for the municipality.

[Langerhans]

Originally Posted by getatag

Something about sales amount is not indicative of appraisal for tax purposes, therefore it's temporarily disqualified for inclusion in the appraisal base for the municipality.

So then it's fair to assume that the previous owner dumped it on the market below market value?

[getatag]

Originally Posted by Langerhans

So then it's fair to assume that the previous owner dumped it on the market below market value?

Likely the case. Maybe it was in pre-foreclosure and owner decided to dump it for remaining loan amount so it didn't show on their credit report. The only pre-foreclosures I've seen are on houses that are upside down in a depressed market, but who knows what people do or think????

[thebalogas]

Was it commercial or residential? I can look on MLS and see if it's listed there and what it says. I did find this on the web:
What is disqualified property?


I am doing a tax research project, and I came across section 336(d)(1)(B) in the IRC which has the definition of disqualified property. I don't really understand the tax definition. I looked it up on google to see if they had an explanation that wasn't in tax language. I am not having much luck finding a sufficient definition. This is the IRC definition "the term “disqualified property” means any property which is acquired by the liquidating corporation in a transaction to which section 351 applied, or as a contribution to capital, during the 5-year period ending on the date of the distribution."

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level 1
oranye
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4 years ago
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edited 4 years ago
Normal Rule - The corporation, when 100% liquidating, will recognize gain and loss as if it is selling the property for FMV at the time of distribution to shareholders.

An exception - The corporation cannot recognize loss on property that has been contributed, tax free (section 351), to the corporation within the last 5 years. It can still recognize gain on 351 property.

So, if you get a 351 warehouse two years ago and are liquidating today and the warehouse would be counted as a loss when considering your 351 carryover basis. You don't get to take that loss into consideration for your liquidation. If you got that warehouse six years ago, you can take the loss because it is no longer unqualified.

This rule prevents shareholders from shifting losses to a place where they might be more effectively used due to caploss limit.

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[getatag]

Originally Posted by thebalogas

Was it commercial or residential? I can look on MLS and see if it's listed there and what it says. I did find this on the web:
What is disqualified property?


I am doing a tax research project, and I came across section 336(d)(1)(B) in the IRC which has the definition of disqualified property. I don't really understand the tax definition. I looked it up on google to see if they had an explanation that wasn't in tax language. I am not having much luck finding a sufficient definition. This is the IRC definition "the term “disqualified property” means any property which is acquired by the liquidating corporation in a transaction to which section 351 applied, or as a contribution to capital, during the 5-year period ending on the date of the distribution."




Normal Rule - The corporation, when 100% liquidating, will recognize gain and loss as if it is selling the property for FMV at the time of distribution to shareholders.

An exception - The corporation cannot recognize loss on property that has been contributed, tax free (section 351), to the corporation within the last 5 years. It can still recognize gain on 351 property.

So, if you get a 351 warehouse two years ago and are liquidating today and the warehouse would be counted as a loss when considering your 351 carryover basis. You don't get to take that loss into consideration for your liquidation. If you got that warehouse six years ago, you can take the loss because it is no longer unqualified.

This rule prevents shareholders from shifting losses to a place where they might be more effectively used due to caploss limit.

This is a much better explanation than mine. Thanks for the find and post TB!!!

[thebalogas]

You are welcome!