How to sell my house for $1.00?
Question Details: I'm thinking about selling my house to my son. I have a real estate loan so need to find out how that would work.
1) If you have a real estate loan, you have to pay it off before or at the time you transfer title; you don't, the bank can foreclose on the house. The lan is not cut off, or the bank deprived of foreclosure rights, by the transfer. In addition, a $1.00 transfer could be seen as fraudulent--an attempt to defraud your creditors by depriving them of an asset--and could be set aside or reversed under the Fraudulent Transfers Act.
2) Yes, you can sell the house to your son for $1.00, but assuming the house has some value greater than that, the excess value over $1.00 will be treated as a gift to him and will be subject to the gift tax. Speak to a tax preparer about tax consequences to your son and you before doing this.