Posted: Sun Jan 28, 2007 8:44 pm Post subject: taxes with Quit claim deed
Me and a friend are looking at buying 70 acres together. The 70 acres has been in his wifes side of the family for at least 80 years. The land was given to her brother and now he can't afford it so he wants to sell it for what he owes. I would like to go through a title company but my friend wants to just do a quit claim deed because he thinks we won't have to pay any taxes. I think he feels it's still in the family since he's married to the brothers sister and feels if it's passed family to family we won't owe ant taxes. Only my name and his name will be on the title paperwork as his wife wants nothing to do with the land. Can you tell me any of the advantages of the quit claim or should we go through a title company?
Posted: Sun Jan 28, 2007 9:57 pm Post subject: RE: can quit claim save home
Hi Martha,
Welcome to the forum.
Simply by doing a quit claim deed, you cannot save your home from being taken over by the lender in case you fail to pay off the mortgage.
The quit claim deed will pass on your home to some other person, to whom you transfer the property. Bu it will not free you from the debt against the home. You still have the obligation to repay the loan.
What you can do is keep the property with you but transfer the loan to some other person by novation. By this process the lender may allow you to get rid of the loan payments throughout your lifetime. But you need to show a valid reason as to why you wish to transfer the loan.
Posted: Sun Jan 28, 2007 11:33 pm Post subject: RE: pay taxes on quit claim deed
Hi Frostie,
Welcome to our forums.
You should seek the services of a title company.
In most buying and selling transactions, a warranty deed is used instead of a quit claim deed. This is done because a warranty deed ensures that title free of any defect is transferred to the buyer.
I guess your friend does not want to buy; he simply wants his wife's brother to transfer the property to both of your names. But I don't think the person will agree to it. This is because he intends to sell it.
You and your friend need not pay any tax on the transfer either through quit claim deed or by purchasing the property. Instead your friend's brother-in-law who is selling through property has to pay capital gains tax on the profit he earns through the sale.
There is also a property transfer tax that one has to pay when he signs over a quit claim deed. The tax is calculated on the price at which the property could be sold on the open market during the time of transfer.
Posted: Mon Feb 05, 2007 12:58 pm Post subject: Quitclaim property to a non-profit
I have quitclaimed a property to my church. They have payed the mortgage since June of last year. I paid it from August 2005 up until May of 2006. My name is still on the title. Am I able to use this property at all for income tax purposes?
yes SR, I agree with cooper. If you have quit claimed your property, your name shouldn't be on the title. You need to get the title changed at the public records in the Office of the Register of Deeds or County Recorder.
Since the property no longer belongs to you legally, therefore you cannot use it for income tax purposes. _________________ Procrastination is the enemy of your financial sucess
Posted: Wed Feb 07, 2007 11:31 am Post subject: can we avoid property tax and or gift tax
Six years ago, my grandmother passed leaving behind a house worth (current market rate) approx 700,000 but as grandma had bought it years ago, property tax was only $1,100 a year and that rate my mother now pays. Six years ago, my mother and I drafted a document between us and I own 30% of the house, she took out a 1st which I make the payments on. How do we put me on title so that I can refinance this loan without triggering an assessment or higher taxes.
Six years ago, my mother and I drafted a document between us and I own 30% of the house
You already have 30% of the house. BTW, which kind of deed/document was used that time? But you are saying that you want your name to be on the title. Can you explain a bit more? The previous document did not result in addition of your name to the title of the house?
Posted: Thu Feb 08, 2007 12:07 am Post subject: RE: refinance without assessment of taxes
Hi Laura,
Welcome to the forum.
Since you own 30% of the house legally, therefore your name should be on the title. Please check the deed you had signed earlier. I hope you have kept a copy of the deed.
If the deed you have drafted is legally sound, then your name is already on the title. All you require is search for a suitable lender and refinance your loan.
As far as property taxes are concerned, you need to pay it according to the tax rate charged by your state government. You may consult a tax advisor on this regard.
Posted: Fri Mar 02, 2007 10:54 am Post subject: quit claim deed to sons
I own some hunting land free and clear and want to quit claim it to my sons. How do you value the property for tax puposes ie; do you use the assessed value or what you could actually sell it for. I want this to be a gift, will there be any tax consequence for me or them? They do not intend to ever sell it. Also is a warantee deed better or used in conjuction with a quit claim deed.
While computing the tax payments on the property, one has to consider the assessed value. The price at which one can sell the property is the property sale value which may or may not be higher than the market value. The market value is then determined by an appraisal.
In case you are planning to give away the property as a gift, then you will have to sell the property at a price lower than the market value. Or else, you may transfer the property through a quitclaim deed.
There will be tax consequences on the transfer through quitclaim. You will be required to pay taxes as you are the transferor here.
There will be a gift tax provided your property value is beyond $12,000. Besides, there is also an annual exemption limit of gift tax on transfer of property worth $1,000,000 in total during his lifetime.
sara
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