tax liability on a Quit Claim Deed

Hi Riehmteam,

Welcome to the forum.

The person may have to pay gift tax but in the state of California, a person may make of $ 10000 without incurring a federal gift tax.

Thanks,
Larry

Hi,

Welcome to Mortgagefit discussion board.

You need not to pay any tax. In state of California you need not to pay federal gift tax for transfer of property.

Do let me know if you have any other questions.

Thanks
Blue

Blue, I think you are mistaken. You have to file federal gift tax returns even in California if the gift exceeds the annual gift tax exemption limit. You are not required to pay the tax if you do not cross the lifetime gift exemption limit of $ 1 million but you have to file the gift tax returns.

Larry, as far as I know, the annual gift tax exemption limit per person is $ 12,000 and not $ 10,000.

Riehmteam, the grantor might have to pay gift tax if he has already exceeded the lifetime exemption.

Hi Jenkin,

Merry Christmas :)

The regulations of gift tax are very complicated. You are right that the annual gift tax exemption limit per person is $ 12,000. But the law varies from state to state and if I am not wrong, in the state of California, the annual gift tax exemption limit per person is most probably $ 10,000.

Feel free to ask if you have any further questions or doubts or suggestions :).

Best of luck,
Larry

Well Larry, the gift tax exemption limit is currently $12,000 and it will remain so even in 2008. However, the limit was earlier $10,000.

I am taking care of my folks now and they want to add me to their deed on a paid off California property that we are all sharing. Does this change things as they are just adding my name to the deed and not signing over the property? I am worried about being hit by taxes at the end of the year.
RM.

Hi Richard,

Welcome to the forums.

Since the guys have added you to the deed, therefore you have a share in the property and hence they may ask you to pay a part of the property taxes too. But they'll have to inform the County Tax Collector about it so that the records show your name as the taxpayer along with that of others.

Take Care

My boyfriend wants to add me to the deed of his house while keeping himself on it as well. I live is Washington state and found out through my counties recorders office, I am required to pay a tax on 50% of the mortgage amount which is 1.78% adding up to almost $3,000!! Is there a way to avoid this tax without my boyfriend having to pay it for me as a gift?

Hi Teague,

It's true that you need to pay taxes on quitclaiming a piece of property as a gift. But there are certain exemptions which you can avail of. If the part of the property he's quitclaiming is worth less than $12,000 (per year per person gift limit), you needn't pay any gift taxes. And even if it exceeds $12,000 limit you can apply for a consideration of the excess amount of gift as a part of the $1 million lifetime gift exemption limit. For a similar discussion you can refer to the following page:
http://www.mortgagefit.com/discuss/quitclaim-taximplications.html#3127

The 1.78 % tax is the Washington real estate excise tax and I would tend to believe that what the county told you is correct.

Hi Lene!

Welcome to forums!

Your parents will have to sign a quitclaim deed in your name to transfer the property to you. If the property is transferred to you, then your parents may have to pay gift taxes. Once the property is solely transferred in your name, you can then refinance the mortgage. However, in order to refinance it, you should have a good credit score and income.

Feel free to ask if you have further queries.

Sussane

is there a tax you have to paid on a quitclaim? if so who paids it.

Hi SUZANNE!

Welcome to the forums!

While transferring the property through a quitclaim deed, one has to pay stamp doc fees and registration fees. The grantor and the grantee can negotiate and decide who would pay it.

Sussane

If my boyfriends ex wife wont quick claim the house can he still refinance