Everyone knows that the real estate market in our area and around the nation has been slow. As in any business, when things slow down, creativity steps in. Don't get me wrong, creativity is a good thing and is the backbone of the American way.
Many real estate agents and sellers are starting to get creative in order to sell their properties. This is not a bad thing - however, it might come back and haunt you! Think about this. You buy a property for $700,000 and the seller offers a new car as your incentive and you accept it. You're happy as can be. You bought a new home and have a brand new car in the garage. The value of the car is say $30,000. You don't think the seller is giving it away do you? The seller is probably going to deduct it on his tax return as part of his closing costs. So far so good.
As the buyer, I'm not so sure. Do you, as the buyer, declare the value of the auto as income to your tax return or maybe you say it was a gift. The I.R.S. has this fee called a gift tax. I think it's about 30 percent. Unfortunately, either way, you'll probably end up paying somehow - someway.
These incentives are not new; it's just that the stakes are higher. No one blinked an eye when the incentive was a $200 television. A $30,000 auto is another story.
P.S. If you are an accountant, please call me with your take on the situation.
Ric Cornelius is the Broker/Manager of Sand Key Realty Sales and Rentals, Inc. Sand Key Realty has three offices with 40 agents. One office is at 740 S. Gulfview Blvd., Clearwater Beach, 727-443-0032; the second office is at 2701 Gulf Blvd., Indian Rocks Beach, 727-595-5441; and the third office is at 309 Belleview Blvd., Belleair, 727-461-4200.