Posted: Mon Apr 03, 2006 6:32 pm Post subject: Selling our home in Washington State to a family member.
Thanks. I look forward to the steps.
Just to clarify. I own the house free and clear. Bought it new 15 years ago for $70,000. Current market value is around $229,000. To help a family member out I will sell it for $162,000 the current assessed value. I hope I'm not setting my self up for any tax issues from local or state. I will pay excise tax on the sales price of $162,000. Do I have to tell the IRS anything when doing my 2006 taxes?
When doing the sale to a family member do I do a Quit Claim Deed or a Statutory Warranty Deed? I will carry the contract and they will pay a portion down and I will charge 5% interest. I assume I will have to report the interest yearly. Even thought in a sense I'm selling the house cheap and was hoping the interest could be part of the sale and meet the under $250,000 2 for 5 exemption, but I'm not sure if that is okay or not. So maybe I better report the interest earned when carrying the contract.
Please adivse, I'm trying to figure out the best and safest way to handle the matter. Thanks so much.
To me that looks clear. You will have to pay excise tax on the sale price of the property and regarding informing the IRS anything or not, I would advice you to consult an attorney. He may be the best person you may be looking for at this point of time.
The type of deed that you use depends upon the buyer and the seller as the deal is within the family. You may use a quit claim deed, a statutory warranty deed or a general warranty deed. However, a general warranty deed gives the most assurance to title for the buyer or the grantee.
Now as far as tax on capital gain is concerned, you are allowed to exclude $250,000 of the gain from the taxable income provided the house was in your name for two of the past five years when you plan to sell. This satisfies your situation as you already said.
For FSBO, the first step is to advertise your property in a proper manner. You may get it listed in the local newspaper, with real estate agents and in the online websites offering such services.
You must have a clear idea of the prevailing market price of similar houses in your area so that your sale price offer becomes realistic and don't scare the buyers, specially since it's within your family.
The most important part however is the information that you provide on your property. It's the seller's responsibility to disclose all the information on the property to the buyer.
For that you should the legal description and tax information on your property. You must provide the property disclosure form. This form can be obtained from a real estate licensee or from the real estate commission office in your state.
You must have and provide the information on mortgage pay-off which you may get from your lender, public records to find out whether any liens like federal income tax or any legal actions are pending on the property. Also, you need to the information on homeowner's insurance.
The different forms that need to be used in the sale include disclosure forms and state specific forms and contracts. You may consult a real estate lawyer for the requirements.
Posted: Wed Apr 05, 2006 6:47 am Post subject: transfer of ownership
Hello AKC
I own a house for my dad he make all payments and lives in it. My question is the loans isin my name and he wants me to Quick Claim the deed to so he can borrow some money from a friend. will that transfer the loan to his friend.
Posted: Wed Apr 05, 2006 6:58 am Post subject: RE:transfer of ownership
Hi,
It’s good to see that you care about your father.
Through quit claim deed only the interest in the title of ownership gets transferred. If you want to transfer the loan as well then you will have to undergo a process called Novation.
I will also suggest you to get help from an attorney as your father is looking to borrow some money from his friend. So it will wise to have to all the legal papers in place.
Posted: Sat Apr 08, 2006 2:36 pm Post subject: quit claim deed
Hi,
I co-signed a mortgage loan with my sister to help her purchase a home. I am submitting a quit claim deed to transfer all my interest in the home to her. Will this mortgage continue to be a part of my credit upon the completion of the quit claim deed?
Posted: Sat Apr 08, 2006 10:55 pm Post subject: RE
Hi Johnny
Quit claim deed is no doubt a good option but it has some limitations too. It is very important for you to understand the true meaning of this deed.
The person who has signed the promissory note in mortgage, he is solely responsible for the mortgage repayment. The best way to get rid off the mortgage, make it refinanced with new owner taking the responsibility of paying off the loan after the present owner has repaid the existing mortgage.
Thanks _________________ Procrastination is the enemy of your financial sucess
Posted: Fri Apr 14, 2006 10:38 am Post subject: quit claim deed
my mother in law has a home that she owes 113000 on mortgage and 23000on chapter 13 making her monthly home pymt 2000.oo she can not afford this any longer she wants to quit claim deed to her son to become owner so he can refinace her total dept 136000 and get a lower total monthly payment for her under my husband her son same last name then he wants to use the equity in house (valued at 30000) to purchase his 2 family home is this possible
Refinance is possible to transfer her debts to your husband. Quit claim as mentioned by Blue is a separate thing and can be used to transfer the interest in the house and not the loan.
In order to refinance and quit claim you must consult an attorney before doing this as there are some procedures involved in refinancing while in chapter 13.
WE BOUGHT A HOUSE UNDER MY AUNTS NAME A YEAR AGO . I HAVE NO WAY OF SHOWING THAT I'VE BEEN PAYING FOR IT.ONLY THAT I PUT THE HOUSE ON MY TAX RETURN.WILL THAT SHOW THAT I PAID FOR THAT PROPERTY FOR THAT YEAR.OR DO I NEED TO GET A QUIT CLAIM FROM HER.AND IF SO.WILL I HAVE TO PAY MORE TAXES BESIDES THE ONES I HAVE ALREADY PAID FOR LIKE PROPERTY TAXES
AND OTHER TAXES FOR BUYING THE PROPERTY.
Posted: Fri Apr 14, 2006 11:00 pm Post subject: RE:
Hi,
You must be having the payment receipts. And tax return documents are good proofs of your payments. So I dont think you need to do quit claim deed unless you want a share in the property interest.
Posted: Wed Apr 19, 2006 4:08 am Post subject: Quit Claim for investment property
Can you tell me how it would work if I use a Quit Claim to purchase a property that is headed for foreclosure?
The seller cannot pay the mortgage so I was going to have him sign a Quit Claim, then I would pay the mortgage company the amount due to keep it from going into foreclosure, then I would sell the home for Fair Market Value, hopefully profiting about $20-30,000.
Is this the best way to purchase and immediately re-sell the property?
What are the tax implications?
Thank you for your advice !!! _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
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