buying through wholesaling

[Vinh Nguyen]

Hi, 

My friend is in the process of buying a house through a wholesaler. The seller wants to sell it for $50k but has requested to put it down on paper for $5k, so he can pay less tax; the remaining $45k would just be given under the table. Are there any legal ramifications to putting it down for $5k on paper? 

He is aware his capital gains tax will be higher when he ends up fixing and selling the property in the future.