Posted on: 21st Sep, 2007 08:28 pm
hi
in 2002 i helped my brother to buy a home because i have a good credit.
he paid the money , but the loan and the property in my name, he payes the mortgage and everything, now he wants the property in his name.
i want to transfer the property to his name without any captal gain taxes on me . the house was 165000, now is about 400000.
is quit claim can help in this matter. what should i do.
in 2002 i helped my brother to buy a home because i have a good credit.
he paid the money , but the loan and the property in my name, he payes the mortgage and everything, now he wants the property in his name.
i want to transfer the property to his name without any captal gain taxes on me . the house was 165000, now is about 400000.
is quit claim can help in this matter. what should i do.
Hi Bob,
Welcome to forums.
If you transfer property through quitclaim deed, there's no need to pay capital gains tax. Transferring the property title to someone isn't similar to selling it off. But first of all, you need to decide whether you'll sell or just do a transfer.
If you sell, you may have to pay capital gains tax provided you do not qualify for exemptions as given in a previous discussion on Capital gains tax exemption.
Thanks
Welcome to forums.
If you transfer property through quitclaim deed, there's no need to pay capital gains tax. Transferring the property title to someone isn't similar to selling it off. But first of all, you need to decide whether you'll sell or just do a transfer.
If you sell, you may have to pay capital gains tax provided you do not qualify for exemptions as given in a previous discussion on Capital gains tax exemption.
Thanks
hi bob,
i agree with jameshogg that if the property is transferred by using a quitclaim deed, then you will not have to pay any capital gains tax on it. but after transferring the property title, the lender will require your brother to refinance by taking a new loan in his name.
i agree with jameshogg that if the property is transferred by using a quitclaim deed, then you will not have to pay any capital gains tax on it. but after transferring the property title, the lender will require your brother to refinance by taking a new loan in his name.
you have a family transaction which allows you to gift all of the available equity to your brother. you won't have to pay taxes unless you actually make a profit. and then only on that profit.
also you are allowed to take a $250,000 exception to the capital gains tax if you occupied the residence for 2 out of the last 5 years before you sold it.
if you use a quit claim deed he will gain sole ownership rights and you will still be responsible for the mortgage. you will need to actually sell the property to him if you want him to have sole responsibilty for everything.
your choices are he either assumes your mortgage or he takes out a new mortgage. the important thing is this as i mentioned above you can gift equity to him. the benefit here is this...he can take out a loan based on the value of the property. it is like putting money down but no money actually changes hands. in a typical purchase even if a $100,000 purchase on a house worth $400,000 is still a 100% ltv loan. but in your situation it would be a 25% loan to value because of your gift of equity. almost anyone can qualify for a 25% loan whereas a 100% loan is difficult to get.
so in review your brother even with bad credit should be able to finance into his name because of your gift of equity.
let me know if you need any clarification.
also you are allowed to take a $250,000 exception to the capital gains tax if you occupied the residence for 2 out of the last 5 years before you sold it.
if you use a quit claim deed he will gain sole ownership rights and you will still be responsible for the mortgage. you will need to actually sell the property to him if you want him to have sole responsibilty for everything.
your choices are he either assumes your mortgage or he takes out a new mortgage. the important thing is this as i mentioned above you can gift equity to him. the benefit here is this...he can take out a loan based on the value of the property. it is like putting money down but no money actually changes hands. in a typical purchase even if a $100,000 purchase on a house worth $400,000 is still a 100% ltv loan. but in your situation it would be a 25% loan to value because of your gift of equity. almost anyone can qualify for a 25% loan whereas a 100% loan is difficult to get.
so in review your brother even with bad credit should be able to finance into his name because of your gift of equity.
let me know if you need any clarification.
I have a similar situation. I purchased a home for a friend with my credit and his money. He has lived in the property for a year now and has pd all the expenses and mortgage. We thought by this time his credit would be good and he would be able to get his own mortgage but this is not the case. He would like to be secure that if anything happened to him his family would own the home. Is there any way I can transfer the property to him? He is not a relative?
Hello Courtney.
Welcome to the forums.
Your friend should refinance the mortgage on his name and you can quitclaim the property to your friend. If he doesn't refinance the mortgage on his name and defaults on mortgage payments then your credit will face the negative impact. Feel free to ask the community if you have further questions.
Welcome to the forums.
Your friend should refinance the mortgage on his name and you can quitclaim the property to your friend. If he doesn't refinance the mortgage on his name and defaults on mortgage payments then your credit will face the negative impact. Feel free to ask the community if you have further questions.