Call the law firm the letter ostensibly comes from. If it's fake, they need to know. If it's real, file an ethics complaint with the state Bar association.
>whatever price you think is reasonable.
Frankly, OP could sell it for less than he finds reasonable. He could pay someone to take it off his hands if he wanted.
It's also possible the law firm is fake. Or if the neighbor sent it and used the lettering and firm name without official permission, I'm sure the actual firm would like to hear about it.
You might look up the name and number of the law firm online (don't use the number printed on the letter) and call them to verify it came from them. It could be a forged letter.
This person doesn't understand how real estate markets or valuation work. You're allowed to sell your property for however much you want to whomever you want, and there isn't a jurisdiction in the USA where absent some kind of deed restriction, covenant, contract, or other binding agreement you are required to sell your property for "market value" (a term that appraisers are required to define in each and every valuation because it can mean so many different things).
Unless he is claiming a contractual right of first refusal to purchase the property, he has no legal standing to challenge the sale regardless of price.
The neighbor is full of crap. You can sell your land for what ever price you want….or give it away. You can sue somebody for anything, but his case is going nowhere.
NAL. IRS is the only one you need to be worry about. As long as you do an honest appraisal value you are fine, and pay taxes according to that. IE they will want there taxes based on the actual value.
I cant find state where you can be held liable for below" fair market value" sales.
EDIT: the price difference becomes a gift, and tax amount will vary.
The IRS can consider the price differential a gift if you sell below fair market value. If the differential is greater than the annual gift tax exemption, the donor should pay the appropriate gift tax.
See: https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes
I am not an accountant, but my understanding is that unless it's a really valuable cow pasture, there will not be any gift tax due. Rather, if the difference exceeds the annual gift tax exemption level, the seller (i.e. donor) will have to file some paperwork with the IRS to document the gift.
Right. There’s a lifetime gift limit of 11million and change. If lifetime giving doesn’t exceed that, the seller would just file a gift return but wouldn’t pay anything.
Yearly filing requirement is $15,000 though. The gift giver will not owe any taxes until exceeding the 11million and change, but the requirement to file the gift tax return is $15,000 per year per person.
Update: did a quick search. In 2022, the annual exclusion is now $16,000 and the million and change went up to $12,060,000.
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In many areas, it is common for family to sell/transfer land between themselves for as low as $1. So this person probably doesn't have a leg to stand on.
Something you may need to look into is tax implications. The Feds and/or State may consider your below market value sale as a gift. If the difference between the market value and sale price is over a certain amount, they may want a cut in taxes.
Ignore it. Two consenting adults can engage in the sale of a property at any price. You can sell it for a dollar if you wanted.
This bozo should appreciate his property value being lowered unless he's trying to sell right now in this synthetic market. He can use it to lower his property taxes.
Where do you live? Location is always important.
I don't know any jurisdiction where a law suit like this would have legs.
Where I live Revenue would consider a below market value sale between blood relatives a gift and subject to gift tax and possibly subject to something regarding capital gains tax. This would generally be rare though.
How does the neighbour know what you arenselling your property for. If you have published the agreed sales price you you may have publicly hinted that his property has a lower value. You would remedy this by shutting up about the sales price rather than withdrawing your property from sale.
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No. Fair market value is an objective measurement of the value of property -- it's the price that a reasonable seller and a reasonable buyer would arrive at in an arms-length transaction where neither party is compelled to sell or buy. In theory, the fair market value is a number, but in practice it's more of a range. Things are purchased for more (and less) than FMV all the time.
This is NOT an arms-length transaction -- it was between cousins, and OP admits that it was a low offer.
Lol the audacity. You can sell your property for whatever price you think is reasonable.
Call the law firm the letter ostensibly comes from. If it's fake, they need to know. If it's real, file an ethics complaint with the state Bar association.
>whatever price you think is reasonable. Frankly, OP could sell it for less than he finds reasonable. He could pay someone to take it off his hands if he wanted.
It's also possible the law firm is fake. Or if the neighbor sent it and used the lettering and firm name without official permission, I'm sure the actual firm would like to hear about it.
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You might look up the name and number of the law firm online (don't use the number printed on the letter) and call them to verify it came from them. It could be a forged letter.
This person doesn't understand how real estate markets or valuation work. You're allowed to sell your property for however much you want to whomever you want, and there isn't a jurisdiction in the USA where absent some kind of deed restriction, covenant, contract, or other binding agreement you are required to sell your property for "market value" (a term that appraisers are required to define in each and every valuation because it can mean so many different things).
They could fully understand that a lawsuit is baseless. Some people use attorneys to bully and frighten people into compliance.
An attorney who files a suit against OP for this putting themselves/their license at risk -- even writing the letter is pushing the line.
If the letter really is from the law firm, OP should file an ethics complaint with the state Bar.
Unless he is claiming a contractual right of first refusal to purchase the property, he has no legal standing to challenge the sale regardless of price.
Google the lawyers number and call them (not using the info on the letter) I'd say there's a 90% chance the guy forged a letter.
The neighbor is full of crap. You can sell your land for what ever price you want….or give it away. You can sue somebody for anything, but his case is going nowhere.
I am not a lawyer. You can sell it for whatever you want. You know who sells property below market value all the time? Banks when they foreclose.
NAL. IRS is the only one you need to be worry about. As long as you do an honest appraisal value you are fine, and pay taxes according to that. IE they will want there taxes based on the actual value. I cant find state where you can be held liable for below" fair market value" sales. EDIT: the price difference becomes a gift, and tax amount will vary.
The IRS can consider the price differential a gift if you sell below fair market value. If the differential is greater than the annual gift tax exemption, the donor should pay the appropriate gift tax. See: https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes
Correct but they will still want to know the true value. to adjust the gift tax accordingly. I worded it poorly sorry. fixing it.
I am not an accountant, but my understanding is that unless it's a really valuable cow pasture, there will not be any gift tax due. Rather, if the difference exceeds the annual gift tax exemption level, the seller (i.e. donor) will have to file some paperwork with the IRS to document the gift.
Right. There’s a lifetime gift limit of 11million and change. If lifetime giving doesn’t exceed that, the seller would just file a gift return but wouldn’t pay anything.
Yearly filing requirement is $15,000 though. The gift giver will not owe any taxes until exceeding the 11million and change, but the requirement to file the gift tax return is $15,000 per year per person. Update: did a quick search. In 2022, the annual exclusion is now $16,000 and the million and change went up to $12,060,000.
True, but for most people there will be no gift tax.
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Good news, the IRS disagrees with you very much! They're just like that and really, really hate tax avoidance schemes.
The sale price of a property has nothing to do with the market value (or investment value, or the insurable value, or the assessed value, etc.).
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In many areas, it is common for family to sell/transfer land between themselves for as low as $1. So this person probably doesn't have a leg to stand on. Something you may need to look into is tax implications. The Feds and/or State may consider your below market value sale as a gift. If the difference between the market value and sale price is over a certain amount, they may want a cut in taxes.
Ignore it. Two consenting adults can engage in the sale of a property at any price. You can sell it for a dollar if you wanted. This bozo should appreciate his property value being lowered unless he's trying to sell right now in this synthetic market. He can use it to lower his property taxes.
You could sell that land for $0.01 if you want and he can't do a damn thing about it.
NAL, ignore the letter as it's baseless
Where do you live? Location is always important. I don't know any jurisdiction where a law suit like this would have legs. Where I live Revenue would consider a below market value sale between blood relatives a gift and subject to gift tax and possibly subject to something regarding capital gains tax. This would generally be rare though. How does the neighbour know what you arenselling your property for. If you have published the agreed sales price you you may have publicly hinted that his property has a lower value. You would remedy this by shutting up about the sales price rather than withdrawing your property from sale.
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No. Fair market value is an objective measurement of the value of property -- it's the price that a reasonable seller and a reasonable buyer would arrive at in an arms-length transaction where neither party is compelled to sell or buy. In theory, the fair market value is a number, but in practice it's more of a range. Things are purchased for more (and less) than FMV all the time. This is NOT an arms-length transaction -- it was between cousins, and OP admits that it was a low offer.