Posted on: 01st Aug, 2009 05:09 pm
so the title of the house my husband and i are living in is under my name and my sister's. we want to "buy out" my sister, remove her name from the title, and put my husband's name on the title. how to go about doing this?
the house is free and clear. tell me if this is correct:
estimated appraisal value of home is $1.4 million and we are proposing to take out a mortgage to pay half the value of the home and give the cash to my sister to buy her out. so this is equivalent to a "refinance with cash buy out" for $700k for a home valued at $1.4 million. we use a quit claim deed to transfer the titles.
giving my sister the $700k cash is considered a "gift" and she would have to pay income tax on it? is there a gift tax we have to pay? are there any other considerations you'll would recommend we watch out for?
thanks for your help!
the house is free and clear. tell me if this is correct:
estimated appraisal value of home is $1.4 million and we are proposing to take out a mortgage to pay half the value of the home and give the cash to my sister to buy her out. so this is equivalent to a "refinance with cash buy out" for $700k for a home valued at $1.4 million. we use a quit claim deed to transfer the titles.
giving my sister the $700k cash is considered a "gift" and she would have to pay income tax on it? is there a gift tax we have to pay? are there any other considerations you'll would recommend we watch out for?
thanks for your help!
jessejackson
welcome to mortgagefit
you have already quitclaim the property so I think you have to pay the gift tax.
I think instead of refinancing the mortgage new owner should directly pay the money to old owner.This will save lot of interest money.
keep in touch......
:arrow: :arrow: :arrow:
welcome to mortgagefit
you have already quitclaim the property so I think you have to pay the gift tax.
I think instead of refinancing the mortgage new owner should directly pay the money to old owner.This will save lot of interest money.
keep in touch......
:arrow: :arrow: :arrow:
jessejackson
welcome to mortgagefit
you can purchase your sister's share. in that case she will be answerable to pay capital gain tax which is 700K minus total investment made by her in the property.
If you want to pay 700K as a gift, you need to pay gift tax. you can avoid it as The rules let you give a substantial amount during your lifetime without ever paying a gift tax. As of 2008 the amount is $1,000,000.
welcome to mortgagefit
you can purchase your sister's share. in that case she will be answerable to pay capital gain tax which is 700K minus total investment made by her in the property.
If you want to pay 700K as a gift, you need to pay gift tax. you can avoid it as The rules let you give a substantial amount during your lifetime without ever paying a gift tax. As of 2008 the amount is $1,000,000.
Hi jessejackson,
A quitclaim deed will help you in transferring the property from your sister's name to your husband's name. Your sister will have to sign the deed in your husband's favor. As the property is free and clear, you will not have to refinance it. You will get a conventional loan on that property. Your sister will have to pay income tax when she receives the amount. But as you are buying her out, I don't think you'll have to pay gift taxes for that amount. It will be mentioned in the deed that your sister is selling off the property to you for a certain amount.
A quitclaim deed will help you in transferring the property from your sister's name to your husband's name. Your sister will have to sign the deed in your husband's favor. As the property is free and clear, you will not have to refinance it. You will get a conventional loan on that property. Your sister will have to pay income tax when she receives the amount. But as you are buying her out, I don't think you'll have to pay gift taxes for that amount. It will be mentioned in the deed that your sister is selling off the property to you for a certain amount.
i am somebody!
if you are buying out your sister's share of the home, it is absolutely not a gift - it is a buyout. i don't know how that thought came into this conversation. did someone tell you that, jesse?
if so, probably "a friend."
manoj - they did not do a quit claim; this is all speculative at this stage. please read it carefully before you respond.
if you are buying out your sister's share of the home, it is absolutely not a gift - it is a buyout. i don't know how that thought came into this conversation. did someone tell you that, jesse?
if so, probably "a friend."
manoj - they did not do a quit claim; this is all speculative at this stage. please read it carefully before you respond.
