WHY TO I HAVE TO PROVIDE A COPY OF MY CLOSING STATEMENT TO INVEST PROFITS FROM A REAL-ESTATE SALE?

{ 2 comments }

HMMMMMM July 25, 2011 at 5:38 pm

Your original closing statement provides a base line to determine your profits that may be rolled into a 1031 exchange.

If you purchased $100,000 home with $3,000 in closing costs, and that home is sold for $150,000 you have $47,000 in profits that may be taxed or reinvested.

The closing statement is the primary record of that closing cost.

starke222 July 25, 2011 at 6:24 pm

Per the patriot act and government financing, all funds to be used for down payment or assets to be verified must be seasoned and sourced.

This means that you must show where they came from (source sale of property by usually showing the HUD closing statement) and shown that you have had them for 2 months(seasoned).

In the case of a real estate sale, since you will have a large check/deposit(above $1000) from your closing it will have to be sourced. It will pass the seasoning requirement via the closing statement.

These are government guidelines that must be complied with for mortgages. They want verification of where your assets are coming from to verify that you are not a terrorist or a drug dealer.

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