A Vermont seller fails to pay the Land Gains Tax owed at closing on the sale of a rural parcel held for three years. Under Vermont law, which party may be held liable for the unpaid Land Gains Tax?
Correct Answer
D) The buyer, because Vermont law provides that the buyer may be held liable if the seller fails to pay
Under 32 V.S.A. Chapter 236, Vermont's Land Gains Tax statute includes a buyer liability provision: if the seller fails to pay the Land Gains Tax, the buyer may be held liable for the unpaid amount. This provision is designed to ensure the state can collect the tax and makes it essential for buyers to verify that the seller's Land Gains Tax return has been filed and any tax owed has been paid at closing.
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Related Topics & Key Terms
Key Terms:
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The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
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