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I’m selling and gaining profit from a house that I bought from family, do I owe them money?
Basically, 2 years ago, my grandma moved to a nursing home (she has since passed away), and my husband and I ended up buying her house. My dad and my aunts gave us a great deal on the house, as they were so happy it was staying in the family.
Well, now we are moving out of state in 2 months, and we are planning on listing our house very soon. Our house has jumped up greatly in value as the market is very hot and our neighborhood is VERY desirable.
We are going to be gaining a huge profit, which makes me feel immense guilt profiting off the house that our family sold to us for a bargain.
I told my husband that I wanted to gift some of the profit to my aunts. My husband is very upset at the idea, and strongly disagrees that we should do that.
So I guess I need to hear outside opinions, do you think it seems appropriate to gift my family some of the profit, or is it unnecessary?
- Anonymous1 month ago
No because when you bought it then it became yours.
- Christin KLv 71 month ago
It's not NECESSARY, but you're being extremely generous in your offer. Legally, you don't have to give anyone anything--you own the house and you have the right to sell and profit from that sale. I think it's very kind you are thinking of your aunts, however. BUT--consider this: if you DO give them money, you will pay a gift tax on it--(they don't--you do) and your profit will be less. So if it's important to give your aunts something for the 'bargain' they allowed you, maybe you could think of something else for them--such as having a repair done they can't afford themselves, or maybe a new appliance or large gift like that. There are lots of ways to say 'thank you' and you're only considering one way right now--maybe there's a compromise you could reach with your husband. I think it's great you want to and your husband ought to consider that you're doing this out of love.
- StephenWeinsteinLv 71 month ago
Give them whatever you saved because they sold it to you for less than it was worth. They would have had that money if they sold it to someone else for what it was worth. They gave you a good deal because they wanted it to stay in the family, and it's not doing that if you sell and move out of state.
Keep for yourself whatever it went up in value while you owned it. They wouldn't have had that money if they had sold it to someone else before it went up in value.
- babyboomer1001Lv 71 month ago
It was your grandma's house - your side of the family that gifted you a generous amount on the house, so gifting some of that money back is generous and shows your gratitude for helping you get the house at such a great price. Without their help, would you have had that house, that increased in value so much? I'd say gift them, regardless of what your husband prefers that you not do. The only reason why I wouldn't do it would be if the place was gutted and renovated, with yours and your husband's money, thus the great increase due to the huge renovation. But that was not the case, was it.
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- SlickterpLv 71 month ago
You owe them nothing. That said, obviously they gave you a deal so it would stay in the family, you can give them first crack at buying it back.
- DanLv 61 month ago
You feel bad because you know your family sold it to you cheap to keep it in the family and you end up flipping it. Your dad and your aunts are still grieving your grandma's passing. There are memories attached to the house.
Since you need to move out of state, the right thing to do is to offer to sell the house back to your family at the price they sold it to you, adjusting for any improvements you made. They may still want you to have the house, but at least you offered. Talk to your Dad, he's blood relation.
Don't do what feels wrong to you. And watch out for your husband. One day he may do something similar to you.
- MaxiLv 71 month ago
They were happy to sell it to you, you were happy to purchase it....... so ANYTHING you make is your money, you owe them nothing at all
- Anonymous1 month ago
Remember if you do gift some you still owe all the taxes on the gain
- SteveLv 61 month ago
If you want to be blunt about it, you owe them nothing. You bought it which meant that they are out of the picture in its future. On the other hand, it is family and they gave you a good deal. In marriages compromises are made. So follow your heart and do what you think is best. Personally I agree with you and I think your husband is being selfish. Again, compromise. If he continues to be upset about it, let him have his little tantrum and he will get over it.
- n2mamaLv 71 month ago
You don’t technically owe them money, but I’m guessing when they gave you the great deal on the house because it was staying in the family they expected you to live there longer than 2 years. It might be appropriate to pay them the difference between what fair market value would have been when you bought it two years ago and what you paid. So if fair market value was $200,000 but they sold it to you for $150,000 and now you’re selling it for $300,000, give them $50,000.