DEAR BOB: My father died and left his house to my two brothers and me. One brother and I want the house. The other brother does not. He demanded appraisals from us and said he would get one as well. We have our two appraisals, but the other brother did not like the numbers and is refusing to get his appraisal. Is there anything we can do to force the third appraisal and buy him out of the house for his one-third value? – Catherine M.
DEAR CATHERINE: Yes. As a co-owner of the house, you can force a sale by bringing a partition lawsuit against the “difficult brother.” Your situation sounds quite simple, but you and the “good brother” will need to hire a real estate attorney in the county where the house is located to bring the partition lawsuit.
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NO TAX DUE IF YOUR HOME SALE DOESN’T PRODUCE A HUGE PROFIT
DEAR BOB: When a house is sold after living in it for 10 years, are taxes due from the sale of the house? – Sylvia R.
DEAR SYLVIA: If the house was your principal residence for at least 24 of the 60 months before its sale, your profit up to $250,000 is tax-free under Internal Revenue Code 121.
If you owned and lived in the house with your spouse for the required period, and if you file a joint income tax return in the year of the home sale, then up to $500,000 is tax-free. For full details, please consult your personal tax adviser.
SHOP AROUND FOR HOME EQUITY LOAN
DEAR BOB: I took out a home equity loan on my primary residence to help my son invest in his business. But I now need to refinance a rental condo for 50 percent of its value. However, my bank denied me due to my income to debt ratio although my FICO credit score is over 800. Is there a document my son should sign confirming that he makes payments on that home equity loan? – Polly D.
DEAR POLLY: Such a statement signed by your son might be helpful, but I think you are dealing with an out-of-touch old-fashioned bank.
Congratulations on your great FICO score. Anything above 700 is considered excellent by most lenders. I suggest you apply with a different lender. Your current lender obviously doesn’t appreciate your business.
Personally, I have lots of banks eager to make home equity loans on my properties. It sounds like you are dealing with a stuffy, outdated bank. Better yet, try your credit union. Most credit unions are very progressive.
The new Robert Bruss special report, “How to Earn Up to $250,000 (or more) Tax-Free Profits Every 24 Months Buying and Selling Houses,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet PDF delivery at www.bobbruss.com. Questions for this column are welcome at either address.
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