Non-Arms Length is a type of transaction where the buyer and seller have a personal relationship. This is an important piece of information when thinking about real estate valuations because there may be other motivations unrelated to maximizing the home sale value.
Depending on the situation, you may be double taxed if you perform a non-arms length transaction. This usually occurs if you're selling and buying the property at something other than the fair market value.
Some common examples of a Non-Arms Length Transaction include: