@NCperson wrote:
@Opus 17 no issue on the seller side of this transaction, but from the buyer's perspective, an inducement to vacate a property, isn't that taxable income?
if a tenant in a property is induced to leave, which appears to what is occurring here, isn't that is taxable income to the tenant? I wonder if that is why the tenant (also the buyer) wants to mask the true purpose of the inducement - so it's not reported as current year income (1099-MISC) .
See above, the buyer is not the tenant. The buyer wants to move into the unit the tenant is currently living in (the nicest one maybe) to qualify for a owner-occupier mortgage.
I'm unclear on how the buyer gains advantage specifically from not issuing a 1099, other than saving a $5 e-filing fee. It seems more like a way to inflate the purchase price for purposes of obtaining that mortgage. To the extent that the payment would reduce his net income (and cash flow) on the property, that could also implicate mortgage shenanigans. But I also imagine that for a commercial mortgage where Amy buys a multi-unit apartment building from Bob, the bank is going to need Bob's PNL for the property to make a mortgage decision, since Amy won't have any history in the property. By the time the incentive is recorded in Amy's books, the mortgage is already approved. There could be shenanigans going on, but I don't quite understand how. And that's not @jlo90275 's problem. They just need to keep their own books clean and make sure the check clears before they hand over the keys.
