Posted on: 06th Feb, 2007 09:39 pm
I refinanced my house and added my partner to the title. We are now splitting up and I would like to use a quit claim to remove her from the title. Her name is not on the mortgage just the title. If I am paying her to get her to sign the claim does either of us pay taxes on that money? I am not talking about recording fees just federal taxes.
spendsitwell,
neither of you need to pay taxes on the money you are paying to get her sign the quit claim deed. but when she signs the deed, the transfer will be considered to be a gift provided you have paid an amount less than the property value.
your partner needs to pay gift tax on the property value exceeding $12,000. this is an exemption limit on the gift tax.
as a recipient of the gift, you need to pay property transfer tax to the county recorder.
neither of you need to pay taxes on the money you are paying to get her sign the quit claim deed. but when she signs the deed, the transfer will be considered to be a gift provided you have paid an amount less than the property value.
your partner needs to pay gift tax on the property value exceeding $12,000. this is an exemption limit on the gift tax.
as a recipient of the gift, you need to pay property transfer tax to the county recorder.
I have some more information for you Spendsitwell.
There is lifetime gift tax exemption also present, which is $1 million. What it means is that you can make up to $1 million of gifts over your lifetime. Only after crossing this limit you will owe federal gift taxes.
There is lifetime gift tax exemption also present, which is $1 million. What it means is that you can make up to $1 million of gifts over your lifetime. Only after crossing this limit you will owe federal gift taxes.