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My sister, her husband and I own a house together. They filed for bankruptcy and were discharged from the mortgage on the house. I need to short sell the house to avoid foreclosure since they are no longer contributing towards the mortgage payments. They are now resisting the sale. I am thinking about having them relinquish their ownership holdings through a quitclaim, as a last resort, in order to move forward with a short sale. Are there taxes involved with this transfer?

adonis · Posted: Tue Jul 12, 2011 9:53 pm Post subject:

Welcome Guest,

You should ask your sister and her husband to sign a quitclaim deed and transfer the property to you. Once they do that, you will be able to sell off the property. If they transfer the property to you as a gift, then they will be liable for paying the gift taxes.

gmakerley · Posted: Wed Jul 13, 2011 9:59 am Post subject:

Guest, you noted that they're resistant to a sale. In that light, what makes you believe that they'd be amenable to a quit claim deed relinquishing their ownership rights? Have the three of you had this discussion at all?

I'm not quite sure how gift taxes came into this, but I would have to defer on the question of any sort of taxes to your local taxing authority, or your state taxing authority, whichever is appropriate.

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Do I pay transfer taxes on a quitclaim deed that removes the other owners?

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