Quit Claim and Capital Gains??

9899chrislisa · Joined: 28 Feb 2008 Posts: 1 1.77 Dollars($)

My hubby's grandpa recently made his will leaving the house to hubby, his mom, and is uncle. His mom said she doesn't want it, but wants it to say in the family, his uncle currently lives there but has no income and cannot keep up with it financially. We would be honored to live there (after Grandpa passes) and would welcome uncle to live there, which he has agreed to. Now that all said, Grandpa is concerned that uncle ,who's in poor health, may have to pay the state for medical bills. and he doesn't want uncle's part of the house to be attached. Grandpa asked about a quit claim giving us the home now, but if I'm not mistaken, right now there woud be capital gains involved on our end. So... what would happen if he quit claimed it and then in the will left it to us.

larry · Joined: 27 Jun 2007 Posts: 3328 473.51 Dollars($)

Hi chrislisa,

Welcome to the forum.

I think if your uncle quitclaims then he will have to pay gift tax on it.

Regarding Capital Gain tax, you may be subjected to Capital gain tax but you can get capital gain tax exemption up to $250,000.

Feel free to ask if you have any further questions.

Best of luck,
Larry

Jessica

Hi Christina,

First of all, let me clarify this: Capital Gains Tax is a different issue altogether as it is not related to quitclaim; it is tax one may have to pay on the profit from selling a home, which is not happening here.

But yes, there can be gift taxes involved once there is a quitclaim transfer of property. Now the question is, has the uncle already applied for medicaid?

Moreover, the Will would become effective only after the grandpa passes away and in this case, he still has the opportunity to change the Will and remove the uncle from his share. Ask him to consult an estate planning attorney.

Regards,

Jessica

All times are GMT - 7 Hours

Page 1 of 1