A potential condominium purchaser wants possession of same prior to the end of a renter's lease. In order to accomplish this, he has offered the lessee a substantial sum to vacate the apartment prior to the end of the lease. Would this be taxable income to the lessee? If not, would it affect the determination of the lessee's (currently established) status as a dependent?
In essence the purchaser wants to buy the lease, which is a type of property. The tenant basically has a zero basis, so anything paid for transferring the lease would be taxable. If the lease is over a year old I'd think it could be long term capital gain. Stu
Is there a way to structure the transaction to avoid taxability? For instance, if the buyer offers to pay the tenant's moving expenses, is that taxable? The move is made for the benefit of the buyer. What if the buyer subsidizes rental of another apartment for the tenant (perhaps without even telling the tenant)? Seth
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