Home Auction

[Acownt4it]

Client is going to sell his primary residence via an auction company. Are there any tax implications I should make him aware of?

My thought is not any different than selling via a realtor.

Just need a second (or more) opinion.

[sea-tax]

I don't see a problem. Any cost would be allocated to basis.

[jimmcg]

Method of sale should not make a difference as to basic tax principles to be applied.

[S T]

Home and Auction

Noel, I think also it does not matter, how the home is sold whether real estate agent or Auction. It should just be a sale. Only item might be is that the costs involved in the Auction which might affect the net proceeds, but I think some of those items would all be deductible as costs for tax purposes.

Question, why is the t/p selling through an auction?? One could imagine an instance that the home is close to foreclosure!

Sandy

[Acownt4it]

Hi Sandy,
The client is selling it through the auction because of the real estate market we are facing in our county. He has had the house on the market for over 1 year and is not getting any movement on it. He is anxious to sell because he wants to move into a different school district before September.
We live in Illinois, about 60 miles northwest of Chicago, pretty rural but growing extremely fast.
What is happening in our area is that new housing is popping up so quickly and in high volumes and selling for the same price that older homes with acreage are selling for.

My client has a home that is 38 years old (not real old by my standards),, approx. 3500 sq ft. and 7 acres of land. New larger homes without as much land, are selling for the same he is asking. There are alot of commuters from Chicago moving this way and they don't want the land, they want the house. In addition to that, he lives in a small upper class community and their real estate taxes are out of site.
So, he is thinking this is going to be the only way out. He has changed realtors twice with no luck.


By the way, Thanks again for your help with the 1031 exhange.