Posted on: 03rd Feb, 2008 12:08 pm
In 1999 my mother had a Quitclaim deed prepared...she as the grantor and myself and five others siblings as the grantees. The deed states: "...reserving and excepting, however, to grantor the full use, control, income, and possession of the described property for and during the Grantor's natural life..." My mother passed in the fall of 2006 and we sold the property in the summer of 2007. Based on this Quitclaim deed was the house part of our inheritance or was it a gift? What are the tax implications from this type of arrangement? How is the cost basis determined?
Thanks,
Stephen
Thanks,
Stephen
Hi Stephen,
Welcome to the forums.
As far as I understand, the transfer of the property through quitclaim was a gift in your case because you received the share of interest when your mother was alive. And, the way the deed was drafted, it seems that this was a quitclaim with a life estate on it.
The life estate is such that you cannot remove a grantor from the property even if she's quitclaimed it to you as long as she doesn't pass away.
Take Care
Welcome to the forums.
As far as I understand, the transfer of the property through quitclaim was a gift in your case because you received the share of interest when your mother was alive. And, the way the deed was drafted, it seems that this was a quitclaim with a life estate on it.
The life estate is such that you cannot remove a grantor from the property even if she's quitclaimed it to you as long as she doesn't pass away.
Take Care
Hi Stephen,
This will be considered as a gift. But the grantor pays the gift tax. So being a grantee I think you need not to pay gift tax but as you have sold the house, you may have to pay capital gain tax.
Best of luck.
Larry
This will be considered as a gift. But the grantor pays the gift tax. So being a grantee I think you need not to pay gift tax but as you have sold the house, you may have to pay capital gain tax.
Best of luck.
Larry