Hi,
I've buying a house and the seller wants to execute a rent back agreement. The agreement is going to allow them to stay up to 120 days beyond (I realize this a mortgage no-no) the closing date. If the rent back cash (PITI) is not taxable, but a reduction in purchase price, what's the length of time that the IRS would deem this to be the case? 60 days? If it was open-ended someone could be in a rent back situation for 30 years and never claim profit? That doesn't seem right and contradicts what I've seen on this board.
Thanks for your input.
