Posted on: 28th Dec, 2005 09:16 am
What are the tax implications of a Quit Claim? Who pays the property tax?
Thank you.
Thank you.
Jmt,
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.
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.
Hi Jmt,
If the title is free and clear then definitely a warranty deed is better. It cannot be used in conjunction with a quitclaim deed.
Thanks,
Jerry.
If the title is free and clear then definitely a warranty deed is better. It cannot be used in conjunction with a quitclaim deed.
Thanks,
Jerry.
canmy mother quit claim deed a lot to my brothers and I without any tax complications?
Welcome Karin,
There will be tax implications provided the value of property transferred is more than $12,000. Your mother has to pay gift tax if she does not qualify for the exemption.
Just refer to http://www.mortgagefit.com/gift.html for gift tax exemptions.
There will be tax implications provided the value of property transferred is more than $12,000. Your mother has to pay gift tax if she does not qualify for the exemption.
Just refer to http://www.mortgagefit.com/gift.html for gift tax exemptions.
As a result of a fence dispute I am going to quit claim some acreage to a neighbor. He has offered to pay me $5000 for the land plus part of the cost of the survey. Does the exchange of money require more legal steps other than me signing a quit claim deed?
I wanted to include the fact that I live in Wisconsin.
You need to sign the deed, get it signed by a notary public and then file it at the County Recorder's office. This will help you to enter the quit claim deed within the public records.
Welcome Eve,
It doesn't matter if you are in the state of Wisconsin. More or less, all states require that you get the deed signed by a notary and then get it recorded. Until and unless you record the deed, it will not be considered as a valid one.
It doesn't matter if you are in the state of Wisconsin. More or less, all states require that you get the deed signed by a notary and then get it recorded. Until and unless you record the deed, it will not be considered as a valid one.
I am selling a house and have 500,000 in capitol gains can I quick claim half the house to a friend to offset the 20% tax burdon on the 250,000 as only 250,000 is considered capitol gain
Hi Brad,
Welcome to the forums.
You can quit claim your house to your friend so that his name is added on the title. You feel that it will bring down individual gains to $250,000 when you sell. But this is possible only in case of married couples filing jointly.
I guess you are not aware of the fact that one needs to pay gift tax if he quitclaims until and unless he falls under the exemption limit of paying such taxes. Anyway, there is no point in doing a quitclaim here because you cannot divide the gains between you and your friend as such a thing is possible only in case of married couples.
To know about Capital gains tax exemption , refer to a community discussion.
Thanks,
Sara
Welcome to the forums.
You can quit claim your house to your friend so that his name is added on the title. You feel that it will bring down individual gains to $250,000 when you sell. But this is possible only in case of married couples filing jointly.
I guess you are not aware of the fact that one needs to pay gift tax if he quitclaims until and unless he falls under the exemption limit of paying such taxes. Anyway, there is no point in doing a quitclaim here because you cannot divide the gains between you and your friend as such a thing is possible only in case of married couples.
To know about Capital gains tax exemption , refer to a community discussion.
Thanks,
Sara
my mom and i bought a home together in 2004. the home is in her name and so is the loan. although the home was meant for me, i wasn't able to receive the kind of interest rate she could get. i've been making all the payments ever since and we both want to transfer the home to me. i realize a quick claim is one solution, but if i'm going to have to refinance anyway, is a quick claim even necessary? if i do refinance, can i just refinance the remaining balance of the loan? can my mother sell me the original purchase price or does it have to be the current market price? i guess my question is... would it be better to just buy the home from her or for her to do a quit claim? i don't want her to have huge tax implications from the quit claim. what would be best for both our interests?
Hi Emma,
Welcome to our community forums.
If you wish to get the house transferred in your name, you can ask your mom to do a quitclaim deed. Such a transfer may be regarded as a gift provided she transfers you the home at less than the purchase price or without any money transfer. And, she may have to pay gift tax if the property value is worth beyond $12,000 or if she crosses the lifetime gift tax exemption of $1,000,000.
But then if your mom sells the property to you - I mean at the current market price, then she may have to pay tax on the capital gains incurred through the sale. Now, it's between you and your mom to decide whether she would sell at the current price or the original price. Moreover, the value of your property needs to be determined through an appraisal. That will help you to find out if at all your mom needs to pay gift tax and if not, then you can surely go for the quitclaim. On one hand, your mom would have to sign the deed without any tax payments and on the other, you need not pay for the sale price also.
Coming to your query on refinance, well, when you refinance, the lender would expect you to have your name on the title and for that, the quitclaim will be necessary. So, its not that you quitclaim and then refinance. In fact, you can refinance and during the settlement, your mom can sign on the deed and transfer the title to you. And, yes you can refinance the remaining balance itself.
In case you have any more query, please feel free to ask. Also, you may go through the discussions referred by Adonis in the very first post of this page.
Regards,
Jessica.
Welcome to our community forums.
If you wish to get the house transferred in your name, you can ask your mom to do a quitclaim deed. Such a transfer may be regarded as a gift provided she transfers you the home at less than the purchase price or without any money transfer. And, she may have to pay gift tax if the property value is worth beyond $12,000 or if she crosses the lifetime gift tax exemption of $1,000,000.
But then if your mom sells the property to you - I mean at the current market price, then she may have to pay tax on the capital gains incurred through the sale. Now, it's between you and your mom to decide whether she would sell at the current price or the original price. Moreover, the value of your property needs to be determined through an appraisal. That will help you to find out if at all your mom needs to pay gift tax and if not, then you can surely go for the quitclaim. On one hand, your mom would have to sign the deed without any tax payments and on the other, you need not pay for the sale price also.
Coming to your query on refinance, well, when you refinance, the lender would expect you to have your name on the title and for that, the quitclaim will be necessary. So, its not that you quitclaim and then refinance. In fact, you can refinance and during the settlement, your mom can sign on the deed and transfer the title to you. And, yes you can refinance the remaining balance itself.
In case you have any more query, please feel free to ask. Also, you may go through the discussions referred by Adonis in the very first post of this page.
Regards,
Jessica.
I bought a property in 2004 when I was widowed and intended to build a home with my daughter and husband. I would have a "granny" apt in the house for me to live out my life. My contribution was the value of the land. The bank used the equity of the land(no money owing on the land) as a way for my daughter and husband to secure a contruction and now permanent fixed interest mortgage. I am signed on to the mortgage with them for 30 years. My daughter wants me to sign a quit claim deed to the property. I am fearfull to do that since I am still responsible for the mortgage. Also what tax implications are there if I do sign a Quit Claim.
Hi Humbrace,
Welcome to Mortgagefit forum.
If you quit claim your interest to your daughter the lender can ask for the mortgage to be paid off or refinanced in their name. The reason is that after a quit claim deed title ownership will change from the way it was held at the time mortgage was taken.
Before taking the decision on property ownership transfer you should get in touch with the lender to know if he will allow change in title ownership and not require a refinance. But it is likely that he will ask for the mortgage to be refinanced.
Colin
Welcome to Mortgagefit forum.
If you quit claim your interest to your daughter the lender can ask for the mortgage to be paid off or refinanced in their name. The reason is that after a quit claim deed title ownership will change from the way it was held at the time mortgage was taken.
Before taking the decision on property ownership transfer you should get in touch with the lender to know if he will allow change in title ownership and not require a refinance. But it is likely that he will ask for the mortgage to be refinanced.
Colin
"Also what tax implications are there if I do sign a Quit Claim."
As you will not be receiving anything for transferring our interest, it will be considered as a gift and applicable gift taxes may have to be paid.
Tax implication will depend on the value of the property that is transferred. If this value is more than $12,000, which is the annual gift tax exemption limit then you will have to calculate whether you are crossing your lifetime gift tax exemption limit or not. If you do then gift taxes will have to be paid.
Miller
As you will not be receiving anything for transferring our interest, it will be considered as a gift and applicable gift taxes may have to be paid.
Tax implication will depend on the value of the property that is transferred. If this value is more than $12,000, which is the annual gift tax exemption limit then you will have to calculate whether you are crossing your lifetime gift tax exemption limit or not. If you do then gift taxes will have to be paid.
Miller