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Honestly I would just tell the landlord you want $75K after tax and that they are responsible for covering the tax bill. I would have it in the legal agreement you sign. Tell them you didn't realize the tax complication and thought you didn't need to pay tax. So it changed the deal because it is less than you need to move out. If he want you out that bad, he will pay the additional cost.
Honestly I would just tell the landlord you want $75K after tax and that they are responsible for covering the tax bill. I would have it in the legal agreement you sign. Tell them you didn't realize the tax complication and thought you didn't need to pay tax. So it changed the deal because it is less than you need to move out. If he want you out that bad, he will pay the additional cost.
Or, he can tell you to go pound salt and withdraw the offer.
It all depends upon what the LL is wanting to do with the property.
Not every RS tenant gets the number they wish. Even in this over heated real estate market property owners have and can told a tenant to take a walk when they came back with unreasonable demands. There was a story in this past Sunday New York Times real estate section about this very matter. Well it was about tenants choosing to remain in their apartments while buildings underwent major construction/renovation, but pretty much boiled down to the same thing. RS tenants who wouldn't or didn't accept a buy out offer as given and LL moved on.
Last edited by BugsyPal; 03-18-2015 at 04:26 PM..
Reason: Correction
good luck , let us know how that works out . i can tell you this ,they either take our offer or they don't ,it is non negotiable. in the end we win if you die or have to move because of health or a change in events and then you may get nothing.
one of our tenants turned down the offer and then had a stroke and died . her heirs got nothing and we got the apartment ..
to be honest if we were not selling and it was a pure rental building we wouldn't pay a dime.
good luck , let us know how that works out . i can tell you this ,they either take our offer or they don't ,it is non negotiable. in the end we win if you die or have to move because of health or a change in events and then you may get nothing.
one of our tenants turned down the offer and then had a stroke and died . her heirs got nothing and we got the apartment ..
to be honest if we were not selling and it was a pure rental building we wouldn't pay a dime.
Or, he can tell you to go pound salt and withdraw the offer.
It all depends upon what the LL is wanting to do with the property.
Not every RS tenant gets the number they wish. Even in this over heated real estate market property owners have and can told a tenant to take a walk when they came back with unreasonable demands. There was a story in this past Sunday New York Times real estate section about this very matter. Well it was about tenants choosing to remain in their apartments while buildings underwent major construction/renovation, but pretty much boiled down to the same thing. RS tenants who wouldn't or didn't accept a buy out offer as given and LL moved on.
From OP story the Landlord has constantly been increasing the offer. I doubt they would let $15k stand in the way of finally being able to close the deal (in addition the landlord will receive some of it back as they get to lower their tax burden as claiming a deductible on their taxes). Negotiations are a ongoing conversation, in which two parties reach an agreement. Maybe they can reason with the landlord to pay half the taxes, no one knows unless they try. Worse case, the landlord tells them it is not possible and they accept the originally offer of $75K. Either way, OP should seek professional advice from lawyer and accountant before making any decision as this is a lot of money at stake.
Sounds like your landlord might be contemplating a condo conversion. You should check to see if an offering plan has been submitted at the AG office for your building or surrounding buildings. 75k might only be the 5%-10% they will offer as the insider discount rate you would get if you purchased. 75k sounds like a lot in the small picture but if your area is about to gentrify well then 5-10 years from now that same unit may well be a million dollar property, look at the Harlem shift or the LIC shift, the Upper West Side shift, most of Brooklyn has shifted as well. So instead of researching the most "cost effective" way to get 75k you should be researching the why are you getting 75k and what are you giving up to get it. That whole Mitchell-lama housing program issue has not been resolved it's just being pushed back. These landlords are throwing these teeny amounts of money around(75k) and letting their buildings get dilapidated so all the repair work can appreciate the assessed value and drastically improve the rent roll via MCI applications. I think you should shift your focus to better understand your actual situation. The only reason someone would do something to benefit you in business, in NY, is because it benefits them more! Cash is always the ultimate smoking mirror just ask the countries Natives.
here are the two rulings as far as how the money is taxed.
one is a private ruling made to a single tax payer and was kept a plr so it does not become an open ended rule.
There are two IRS decisions that specifically address this. One, a Private Letter Ruling (PLR 8704009), determined whether the payment made to a tenant can be excluded from gain under the "sale of a personal residence" rules. The IRS determined, in that case, that a life interest in a rent-controlled apartment is not a "personal residence" and denied the exclusion. However, it did allow the capital gain treatment.
Another, Revenue Ruling 88-29, came to the same conclusion regarding the exclusion of gain for a personal residence, but made no mention at all about whether the transaction itself was subject to capital gain treatment."
it left it open to be judged on a case by case . it has been about 50/50 so far with half the cases allowing it and 1/2 not. it has still not been decided into revenue law,.
if it was me i would take it as a capital gain and let them tell me otherwise but you better have your taxes honest as you will likely be challenged .
What a waste of time for everyone who took the time to respond !
I told you. It's what welfare clients do when they want to keep their benefits uninterrupted. Anybody else would be more than happy to take the check. I seriously doubt this is a college student, as if he/she was, they could just apply the 75k towards tuition or other university expenses.
But basically if the OP takes the buy out, he/she has no choice but to report the taxes or take a check. The cash offer is not happening......
the owner is required to 1099 it . they have no choice or they are held responsible for the taxes. the only way you can pass that tax liability on to the receiving party is via a 1099.
no landlord is going to committ tax fraud for a tenant.
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