Posted on: 07th Aug, 2007 07:40 am
My boyfriend and I purchased a condo last year, to get the mortgage we put it in my name only, but he is making half of the payments. Our plan was to quit claim him onto the title after the closing. Can you quit claim someone onto the title if they are not on the mortgage? If so, and we have little equity in the condo (less than $10,000), then would the quit claim make us subject to the gift tax? Thank you.
Hi Erin,
"Can you quit claim someone onto the title if they are not on the mortgage?"
Yes you can include your boyfriend onto the title but lender might ask for the mortgage to be refinanced as the ownership of your condo will change from what it was at the time mortgage was taken.
"we have little equity in the condo (less than $10,000), then would the quit claim make us subject to the gift tax?"
Gift taxes are not based on equity in the house. If the consideration received for quit claim a certain portion of your ownership is less than what its current value is then it is considered as a gift and then only gift taxes become applicable.
For example if you are quit claiming half share of your condo to boyfriend, condo's value being $70,000, so if you receive anything less than $35,000, it will be considered as if you have made a gift. But gift taxes are not to be paid if the value of the gift is less than the annual gift tax exemption limit of $12,000.
Miller
"Can you quit claim someone onto the title if they are not on the mortgage?"
Yes you can include your boyfriend onto the title but lender might ask for the mortgage to be refinanced as the ownership of your condo will change from what it was at the time mortgage was taken.
"we have little equity in the condo (less than $10,000), then would the quit claim make us subject to the gift tax?"
Gift taxes are not based on equity in the house. If the consideration received for quit claim a certain portion of your ownership is less than what its current value is then it is considered as a gift and then only gift taxes become applicable.
For example if you are quit claiming half share of your condo to boyfriend, condo's value being $70,000, so if you receive anything less than $35,000, it will be considered as if you have made a gift. But gift taxes are not to be paid if the value of the gift is less than the annual gift tax exemption limit of $12,000.
Miller
"If so, and we have little equity in the condo (less than $10,000), then would the quit claim make us subject to the gift tax? Thank you."
Erin, you can go through this page to know more about tax implications of quit claim deed As Miller said, the annual exemption on gift taxes is $12,000 but even if this limit is crossed you may not have to pay gift taxes. This page explains how it would be possible: Tax implication of Quit Claim Deed
Erin, you can go through this page to know more about tax implications of quit claim deed As Miller said, the annual exemption on gift taxes is $12,000 but even if this limit is crossed you may not have to pay gift taxes. This page explains how it would be possible: Tax implication of Quit Claim Deed
"we have little equity in the condo (less than $10,000), then would the quit claim make us subject to the gift tax? Thank you."
Apart from annual gift tax exemption of $12,000, you have lifetime gift tax exemption available, which is $1 million. If you do not cross this limit then also you will not be required to pay any gift tax.
Apart from annual gift tax exemption of $12,000, you have lifetime gift tax exemption available, which is $1 million. If you do not cross this limit then also you will not be required to pay any gift tax.