Can I sell my house to my C corporation for a price above value, then have the business sell the house later?

by James F. DiFilippo, CPA | Jun 07, 2018

I own a house and I am the majority shareholder in a C corporation. I want to sell my house, and I am wondering if it is legal to sell my house to the C corporation (at, say, 10 percent above the appraised value) and have the C corporation sell the house now or at a later time? I am thinking that the 10 percent will be tax-free capital gains for me (as I am selling my primary home), and the C corporation can write off the difference between what it purchased the house and what it sells the house for. Of course, there will be some costs (title costs) in selling the house to the C corporation.

No way can you inflate the sale price to the C corporation over fair market. That may be treated as criminal by the IRS. 

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Answered by: James F. DiFilippo, CPA, is the owner of DiFilippo & Company CPAs in Toughkenamon, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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