Recording the TUD higher than what was actually paid?

I have noticed lots of people recording the Trust deeds upon sale at a higher price than what they are paid for it on the steps.
I think this is to get around the “being re-sold for over 20% profit in less than 90 days rule” So it looks like your making much less.
Any other reason why someone would do this? And is it legal?Any feedback is appreciated.

That is an interesting observation but not one that we have seen or can verify. We examined a few properties and the transfer value on the trustees deed matched the winning bid. It would certainly cost more in transfer tax to report a higher amount paid and could mean a higher tax basis on the property taxes. I am not personally aware of any 20% profit in 90 days issue??

The Trustees Deed invariably recites the actual sales price. In my experience, the Recorder’s clerk reads that value to determine the Transfer Tax. I’m not sure the clerk could be persuaded to charge a greater tax than this. Even if she did, anyone looking at the recorded document would know the actual sales price. Or would the Recorder tolerate ‘whiting out’ the sales price before the actual recording of the document?

Yes, the 'over 20% profit in less than 90 days ’ rule has bitten me more than once.

BlueSky - can you provide an example property? Would love to see if this is actually happening, and if so how they are doing it.