Posted on: 19th Mar, 2007 08:10 am
my brother is in california and i am in virginia. we need to sell his condo, which he is behind in the assoc fees, and a suit will be pending. i originally requested my brother sign a durable power of attorney so i could sell on his behalf, now the potential buyer has asked that we do a quit claim deed? what would my financial obligations be in this case? would any liens, which would be paid at closing, be reported on my credit? what would my tax liabilities be? would i be responsible for capital gains? debb
Hi Dpelata,
Welcome to Mortgagefit discussion board.
A quit claim deed is commonly used for transferring property ownership to someone. As the condo is in your brother's name, he will make a quit claim deed for transfer of ownership. In the deed he will be named the grantor and the buyer as the grantee.
If the value your brother receives for the condo is less than its present market value then it will be considered as a gift and any applicable gift tax will have to be paid by the grantor (your brother). You are not responsible in any way for paying taxes since the condo is not in your name.
Thanks
Blue
Welcome to Mortgagefit discussion board.
A quit claim deed is commonly used for transferring property ownership to someone. As the condo is in your brother's name, he will make a quit claim deed for transfer of ownership. In the deed he will be named the grantor and the buyer as the grantee.
If the value your brother receives for the condo is less than its present market value then it will be considered as a gift and any applicable gift tax will have to be paid by the grantor (your brother). You are not responsible in any way for paying taxes since the condo is not in your name.
Thanks
Blue
"What would my financial obligations be in this case? Would any liens, which would be paid at closing, be reported on my credit?"
You will not have any financial obligation as the condo is in his name all dues are to be cleared by your brother and not you.
You will not have any financial obligation as the condo is in his name all dues are to be cleared by your brother and not you.
"now the potential buyer has asked that we do a quit claim deed?"
The buyer has asked for use of a quit claim deed as there are liens on the condo. And most people use a quit claim deed in such situation when property title is not clear of liens.
The buyer has asked for use of a quit claim deed as there are liens on the condo. And most people use a quit claim deed in such situation when property title is not clear of liens.
You do not have any financial obligation as you are not the owner of the condo. All the liabilities are for your brother to pay.
Hi Debb,
The durable power of attorney may not work here. I think your brother needs to sign over a quit claim deed and hand over the property to you. Now, only after you pay the homeowner association fees, you will be able to sell the property. However, if the association authorities agree, you may sell the property and pay off the dues afterwards using the sale proceeds.
If you pay down the dues, there will not be any unpaid bills reported on your credit report. I haven't heard of any lien being placed just because someone hasn't paid the association fees.
Regarding the tax liabilities, well that's for your brother to pay. Since transfer through quit claim is regarded as gift (as there is no money transfer between the two of you), therefore your brother or the transferor needs to pay gift tax. But if the property value is within $12000, there's no need to pay such tax. However, depending upon the state laws, your brother has to pay transfer tax and you may need to pay documentary stamp tax for recording the deed.
You will be responsible for capital gains tax only if your name is on the title and you sell it at a profit exceeding $250,000.
There are other exemptions to paying capital gains tax for which you may refer to http://www.mortgagefit.com/postdeal/taxexemption-homesale.html
Thanks,
Caron.
The durable power of attorney may not work here. I think your brother needs to sign over a quit claim deed and hand over the property to you. Now, only after you pay the homeowner association fees, you will be able to sell the property. However, if the association authorities agree, you may sell the property and pay off the dues afterwards using the sale proceeds.
If you pay down the dues, there will not be any unpaid bills reported on your credit report. I haven't heard of any lien being placed just because someone hasn't paid the association fees.
Regarding the tax liabilities, well that's for your brother to pay. Since transfer through quit claim is regarded as gift (as there is no money transfer between the two of you), therefore your brother or the transferor needs to pay gift tax. But if the property value is within $12000, there's no need to pay such tax. However, depending upon the state laws, your brother has to pay transfer tax and you may need to pay documentary stamp tax for recording the deed.
You will be responsible for capital gains tax only if your name is on the title and you sell it at a profit exceeding $250,000.
There are other exemptions to paying capital gains tax for which you may refer to http://www.mortgagefit.com/postdeal/taxexemption-homesale.html
Thanks,
Caron.