Is it legal to write a bill of sale for less than the purchase price and supplement the rest with cash?

UPDATED: Nov 24, 2015

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Is it legal to write a bill of sale for less than the purchase price and supplement the rest with cash?

Specifically, can the buyer be held responsible?

Asked on November 24, 2015 under Real Estate Law, Alabama


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

It is legal but not necessarily enforceable: that is, if the buyer honors his/her obligation to pay the balance with cash, the seller can accept it; but if the buyer fails to pay and, if sued for the rest of the money (since suing would be the only way to try and get it), in court claims that the bill of sale reflected the full price, the buyer will almost certainly win--the court will take the written bill of sale as setting out the full price and will not order the buyer to pay more than is set forth in writing.
Furthermore, the seller needs to bear in mind that cash is not tax exempt: the seller needs to pay taxes on the full price he/she receives.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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