05-22-2007, 03:13 PM
I don't know anything about tax law or taxes and don't understand what you are trying to do or why.
Without doing any research on the subject, my guess would be that generally under the common law you would not be able to do a sham transaction to yourself solely. Most property transfers though are now governed by specific state laws, so this question really depends on the law of your state. Most/all states probably have laws allowing sham transactions, say to add a spouse to the deed of the house.
But I would guess that a real estate lawyer could figure out how to do what you want to do. For example, setting up a trust, transferring/selling it to the trust and then buying it back may work, and is something that people do in certain situations. there may be other ways too. There is going to be costs to doing anything like that, so that may offset any tax advantages.
Would borrowing money in a home equity loan allow you to leverage equity out of the house and reduce your tax liability?
Without doing any research on the subject, my guess would be that generally under the common law you would not be able to do a sham transaction to yourself solely. Most property transfers though are now governed by specific state laws, so this question really depends on the law of your state. Most/all states probably have laws allowing sham transactions, say to add a spouse to the deed of the house.
But I would guess that a real estate lawyer could figure out how to do what you want to do. For example, setting up a trust, transferring/selling it to the trust and then buying it back may work, and is something that people do in certain situations. there may be other ways too. There is going to be costs to doing anything like that, so that may offset any tax advantages.
Would borrowing money in a home equity loan allow you to leverage equity out of the house and reduce your tax liability?