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What are the tax implications of quit claim deed?

Posted on: 28th Dec, 2005 09:16 am
What are the tax implications of a Quit Claim? Who pays the property tax?

Thank you.
hi jim.june,

welcome to mortgagefit forums.

some states do charge fees for the transfer in terms of recording fees and some other.

if you are getting the ownership title through a quit claim deed then you are financially responsible for the property. in that case you have to pay the property tax.

you can also refer this discussion to know more about tax implication if you sell property after quit claim deed.

feel free to ask if you have any more doubts.

god bless you.

for mortgagefit,
samantha
Posted on: 28th Dec, 2005 09:27 am
Hi Jim.June,

If somebody quit claims the property to you it may be considered as a gift to you. In that case if the value is over $12,000 which is per year per person gift limit, he/she have to file a form (706 or 709) with his/her taxes which states to consider the excess amount of his/her gift as part of his/her $1 million lifetime gift exemption.

Then you will be responsible for paying capital gains taxes on it when sold based on its cost plus any improvements made.

Regards,
Blue
Posted on: 28th Dec, 2005 10:03 am
My brother and family trust loaned me money based on the equity in my home and took out trust deeds to protect this money. The loans have been satisfied. I want to file a quit claim deed to remove the paid off trust deeds. Is this the best and only way to do so.
Posted on: 02nd Jan, 2006 03:08 pm
Hi FredB.

Since your loan has been paid off, you will be automatically getting back the title of ownership of your property. Only if you don't repay the loan, your trustee will sell off the property and pay the unpaid loan balance.

I don't think that you need a quit claim deed to remove the paid off trust deed, at least when the trust deed allows you to get back the title after the loan has been satisfied.

Regards,
Caron.
Posted on: 02nd Jan, 2006 07:26 pm
Caron,
I hope you see this followup question regarding the quit claim deeds. The arrangements to pay back these family loans were very informal. In fact the money was never paid back and the loans were forgiven by the family. The trust deeds were placed on the property just in case something ever happened to me such as my death. I have been trying to get my brother to file the right documents but he is always too busy and it is not a priority for him right now. The second half of this issue is that my brother has been talking divorce and I don't want these Trust Deeds on the property and they then become an issue in what I know will be a nasty divorce. Is the quit claim still the best way to go?
Posted on: 03rd Jan, 2006 12:23 am
Hi FredB.

I don't think that there is much to worry about this since your loan has already been forgiven by the family. I would advise you to collect all the necessary legal documents and approach your local attorney. Just talk to him about your situation. He will be the best person to tell you how to proceed further on this issue.

Thanks,
Caron.
Posted on: 03rd Jan, 2006 01:16 am
Hi, FredB

To me, you look in too much bother about your issue. See but the fact is your problem is already solved if you look it from my place.

See the family forgave the loan so the mortgage issue is over right. According to you in trust deeds you name is there so automatically you gets the title of the property.

If you still have any doubts, then you can consult with the local attorney and show him all the legal documents.

Thanks
Posted on: 03rd Jan, 2006 01:21 am
A friend and I are purchasing houses, since he had the captial to purchase the first house he bought it and quick claim deeded it to me. I since gave him the money for the house. We are about to do it again, and started to think about the issues.
Do I need to document paying him the money he put up for the house for Taxes?
Would it be better for me to wait and get the capital myself ?

Since the cost of the house is fair we try and get it when we can, but is it better for me to wait?
Posted on: 05th Jan, 2006 08:42 am
Hi AKC,

Welcome to MortgageFit Forums.

Whenever you are getting the ownership rights for a property through a quit claim, it makes you financially responsible for the property. You need to handle the taxes of the part owned by you from then.

If you are prepared to afford the taxes, then you can have it now through quit claim. Otherwise you may wait and until you arrange the capital.

In any case I shall advise you to get every documented as it is very crucial in real estate matter.

Also, consult an attorney with the issue so that you do not face any problem afterwards.

Feel free to ask if you have any more doubts.

God bless you.

For MortgageFit,
Samantha
Posted on: 05th Jan, 2006 08:54 am
Is it Quick Deed or Quit ?
Posted on: 05th Jan, 2006 09:59 am
Hi AKC,

Welcome to MortgageFit Forums. It is a good question that you have asked.

Often we do this mistake of stating it as a quick claim deed instead of quit claim deed which is the correct one.

Feel free to post if you have any more queries.

God bless you.

For MortgageFit,
Samantha
Posted on: 05th Jan, 2006 10:05 am
I made two gift deeds to each of my two daughtrers a few years ago. Now for tax purposes, they desire to give it back to me. Can this be done with a quit claim deed with no exchange of money between us?
Posted on: 10th Jan, 2006 10:07 am
Hi RGG,

Yes it can be done to transfer the ownership rights of the title back to you and there is no need to exchange money for the purpose.

But involve an attorney always to avoid any discrepancies.

James
Posted on: 10th Jan, 2006 10:14 am
If my husband and I are divorcing and I am the only one on the loan, can I quit claim the house to someone else to avoid paying half
Posted on: 10th Jan, 2006 02:46 pm
hi,

quit claim deed is meant for property transfer only and has nothing to do with the mortgage.

so, i don't think it will be wise to leave your rights of ownership on the house as the mortgage will continue to be in your name only. since you are the only one whose name is on the loan, so you are still eligible for total repayment of the loan

if you want to quit claim to some one refinance the mortgage along with it and transfer the mortgage in his/her name.

to avoid trouble, go for the refinance first and then quit claim and it's better to refinance it to your husband as none will accept, in my view half of the property against the total loan.

regards,
blue
Posted on: 10th Jan, 2006 03:05 pm
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