Posted on: 15th Oct, 2008 07:43 pm
in 2005, my mom, my brother and i bought a house together in ga. the house was in my mom and my brother's names first and then my named was added into the deed a day later because i was out off the town when the house was bought. now the house is in my mom, my brother and my name as tenants in common.
the house was paid in full. i paid 2/3 of the house price with a check when the house was bought. now my mom (she is not us citizen) and my brother want to transfer the house to my and my husband’s name since they are moving out of the town.
if we do the quit claim deed to transfer my mom and my brother’s interest to me and my husband. my questions are:
1) is gift taxed involved? if so, who should pay the gift taxes?
2) does the transaction need to be reported in the form 1040 tax return or other forms? if so, who should be report this transaction in the form 1040 tax return or other forms?
3) can my mom and my brother sell me the original purchase price or does it have to be the current market price? what portion of the price that my husband and i need to pay to my mom and my brother? is it 2/3 of the price since we are tenants in common or 1/3 of price since i paid 2/3 of original purchase price?
4) would it be better to just buy the home from my mom and my brother or for us to do a quit claim? i don't want my mom and my brother to have huge tax implications from the quit claim. what would be best for all our interests? also, my husband and i do not have all the money to pay to my mom and my brother, can we written a loan from them?
thank you for all your help!! i really don’t know whom should i ask. my mom and brother are leaving town within two weeks. we really need to get this solve.
thanks again.
wing
the house was paid in full. i paid 2/3 of the house price with a check when the house was bought. now my mom (she is not us citizen) and my brother want to transfer the house to my and my husband’s name since they are moving out of the town.
if we do the quit claim deed to transfer my mom and my brother’s interest to me and my husband. my questions are:
1) is gift taxed involved? if so, who should pay the gift taxes?
2) does the transaction need to be reported in the form 1040 tax return or other forms? if so, who should be report this transaction in the form 1040 tax return or other forms?
3) can my mom and my brother sell me the original purchase price or does it have to be the current market price? what portion of the price that my husband and i need to pay to my mom and my brother? is it 2/3 of the price since we are tenants in common or 1/3 of price since i paid 2/3 of original purchase price?
4) would it be better to just buy the home from my mom and my brother or for us to do a quit claim? i don't want my mom and my brother to have huge tax implications from the quit claim. what would be best for all our interests? also, my husband and i do not have all the money to pay to my mom and my brother, can we written a loan from them?
thank you for all your help!! i really don’t know whom should i ask. my mom and brother are leaving town within two weeks. we really need to get this solve.
thanks again.
wing
Hi Wing!
Yes, I think there will be a gift tax in your case provided if the gift amount crosses the annual exemption level. The gift tax will be payed by the person who will gift you the property. The person who is gifting you the property will have to file Form 709, United States Gift Tax Return, if the gift is worth more than $12,000 during the year. For the price of the property, I think they can sell you the property at the original price.
Generally quitclaim deeds are done when it is a gift transfer but if there is an exchange of money in the process of transferring, you should go in for a warranty deed. If you are purchasing the property, you can go in for owner financing but you should involve an attorney in the process.
Thanks.
Yes, I think there will be a gift tax in your case provided if the gift amount crosses the annual exemption level. The gift tax will be payed by the person who will gift you the property. The person who is gifting you the property will have to file Form 709, United States Gift Tax Return, if the gift is worth more than $12,000 during the year. For the price of the property, I think they can sell you the property at the original price.
Generally quitclaim deeds are done when it is a gift transfer but if there is an exchange of money in the process of transferring, you should go in for a warranty deed. If you are purchasing the property, you can go in for owner financing but you should involve an attorney in the process.
Thanks.