Taxpayer disposed of his principal residence
- Taxpayer and his roommate were 50/50 owners
- Taxpayer sold his ownership share to his roommate
- Purchaser is assuming the seller’s mortgage obligation
Vendor = Seller / taxpayer
Purchaser = roommate
The BUYOUT AGREEMENT states the following:
Vendor wishes to sell his interest in the property to the purchaser
The purchaser shall assume the Vendor’s mortgage obligation
Upon the closing, sole title to the property shall be transferred to the purchaser
The purchase price payable by the purchaser to the vendor for the property shall be $55,000.
As of the date of this agreement, the purchase price has been paid in full by way of payment by the purchaser to the vendor and by way of set-off of the debt owed by the vendor to the purchaser.
upon the execution of this agreement, the purchaser shall assume the vendor’s obligations related to the mortgage.
My Proceeds of disposition calculation is:
$55,000 + 50% of the outstanding mortgage on the property on the date of sale.
Does anyone have different thoughts? Or saw a similar transaction in the past?