Fishy. When did he buy it? Were taxes owed on it then? When did he sell it? What did he do with it during the period he owned it? Who has title to house now? Usually, the county doesn't take possession -- the high bidder at an auction gets it. Any proceeds above the tax amount owed and auction costs, go to the owner.

sjrcpa

Level 15

And the "owner" has XXX days or months to buy it back from the high bidder for the taxes plus interest.

It was rather lucrative in MD for bidders for a while when the statutory interest rate was 13%

The more I know the more I don’t know.

BobKamman

Level 15

Different procedures in different states, but it's likely there is more to the story than what we are being told (and what the preparer who asked was told). The interest rate in my state is 16%, but some purchasers don't notice that there are existing liens that are not extinguished, or that the property can end up in bankruptcy court for many years.

Taxpayer may have paid $75K for the property -- but did he have title insurance? Or did it come with a $100K federal tax lien?

T

taxes96786

Level 8

How much is he out of pocket? Did he pay cash or did he owe? How much did he pay in expenses for repairs, etc? His loss is limited to his financial output on a sale of business property form.

BobKamman

Level 15

We don't know it was business property. Schedule C? Schedule D? Form 4797? Doesn't hurt to guess, not our client.

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