Posted: Tue Apr 04, 2006 12:58 am Post subject: Tax implication when selling property after quit claim deed
I bought a property 1 year ago. I quit claimed the property after owning it about 2 months to my sister as a gift so she can have ownership on the house. The loan is under my name and she has been paying mortgage on it.
She is thinking of selling the place now. What is the tax implication of the sale? Since the deed is now under her name, would she be the one responsible for paying tax on the gain from the sale of the property or do i have to report the gain also on my income tax return at the end of the year? My name is no longer in the deed since I quit claimed it to her about 1 year ago.
Thanks,
Wonder _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
Posted: Tue Apr 04, 2006 1:39 am Post subject: RE:Selling property after quit claim deed
Hi,
Welcome to the Forums.
The first thing I would like to tell you is that you should have transferred the mortgage also to your sister when you quit claimed the property to her to avoid any hassles in future.
Since you say that your sister is the current owner of the property. So she should be the one paying the taxes on capital gains. But I would like to know that there are some others papers also that need to signed by you at the time of transfer of ownership rights.
I would also recommend you to take an advice from an attorney because he may be the best person you may want at this point of time.
Now comming back to your question, yeah as she has been paying off the mortgage and as the property already quit claimed to her so all the gains and losses belongs to her only.
For your sister, on gifted property, if the value is over $11,000 which is per year per person gift limit then she has to file a form (706 or 709) with the taxes which states to consider the excess amount of the gift as part of $1 million lifetime gift exemption.
So, neither you have to pay anything nor you will get anything out from it.
Adonis _________________ Procrastination is the enemy of your financial sucess
Question regarding what you said about the gift value. When you say: "if the value is over $11,000 which is per year per person gift limit then she has to file a form (706 or 709) with the taxes which states to consider the excess amount of the gift as part of $1 million lifetime gift exemption. ", do you mean the gain she sells the property or the value of the house when it's transferred over to her?
I bought the house for $250K 1 year ago. I transferred it to her 2 months after i bought it. And the market value for the house is around $300K now. Assuming she sells it for $300K, does she have to file the form 706 or 709 with the taxes?
Sorry for my naivity in this subject and appreciate any input that you guys have.
--Wonder _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
First I would like to make it clear to you that individuals can exclude up to $250,000 in profit from the capital gain by selling the house provided they have lived in the home for minimum of two years.
To calculate the Capital Gain you must consider the value of the house when transferred to your sister. You need to subtract this value from the selling price of the house to get the gain.
Now subtract the maximum allowable exclusion from this gain to get the taxable gain amount.
This is a little confusing for general people. You must take help from your tax advisor to calculate and file the returns.
Posted: Fri May 12, 2006 1:29 pm Post subject: quit claim deed
my ex husband will not sign a quit claim deed and now unpaid federal tax liens are on my home, after 15 years of divorce, I have remarried. I need to have the liens removed, the mortgage company suggested a quit claim deed, the IRS will take it but ex will not sign it WHAT DO I DO _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
Your rights are normally explained clearly in the Judgment and Decree. Some of the decisions can be changed after your divorce.
If one of you is awarded ownership of the home, the Judgment and Decree will state how this transfer is going to happen. Generally it orders for a quit claim deed.
If the quit claim deed is not signed then, you can check with an attorney and can refer County Recorder or Registrar of Titles to find out what can be done under that circumstance.
As 15 yrs. have passed already since your divorce and you are not aware of the legal bindings, it's better to consult an attorney and seek his help.
Posted: Sun May 21, 2006 5:35 am Post subject: nursing home vs quit claim deed
My father quit claimed his house to three daughters 4 years ago. If he has to go to a nursing home and runs out of cash can the nursing home go after the house.
It can be done easily through a quit claim deed and I think that it's better to show the transfer as a gift from your mother to you rather than a transfer in exchange of money.
You must consult an attorney to get an appropriate suggestion on the way to transfer the house. Also you should prepare the deed under his guidance.
Blue _________________ Lets help each other. Try my blog
Posted: Fri Aug 11, 2006 11:38 am Post subject: Money in exchange for Quick Claim
My mother's ex-husband wants to buy her out. He will pay her 1/2 equity if she signs a Quick Claim Deed. What will she need to do in terms of taxes if she accepts?
Let me make things more simple to you. I am dividing this question in 2 section for better understanding.
For the transfer Some states may charge certain fees like recording fees or other fees for related to title transfer. So here you ex husband has to pay those fees.
From federal income tax point of view - i think it will come under gift tax and your mother have to pay for the same. If there is little equity in the home or the equity is less than $22,000, you probably have no federal income tax consequences in the transfer, as he can transfer his half - $11,000 - to your husband without a problem.
I suggest you to take help from a taxt consultant, he will be able to guide you as how you(and mother) should take this money. _________________ Good is the Enemy of Great.
Caron
