Posted on: 31st Mar, 2009 08:15 am
in trying to understand the tax consequences of a quick claim i read the following post but have a question about it:
post:
my brother wants to do a quit claim deed on a condo in florida that our mother is living in. he would like to have her assume the title for the condo. the property value is less than $120k. what is the tax implication of this transfer, if any?
response:
with the transfer of the property through a quitclaim deed, your mother will be financially responsible for the property. she will also have to pay the property taxes.
as the property is quit claimed to your mother by your brother, it may be considered as a gift to your mother. in that case if the value is over $12,000 which is per year per person gift limit, your brother will have to file form 706 or 709 with his taxes. this will consider that the excess amount of the gift as part of his $1 million lifetime gift exemption. your mother will also be responsible for paying capital gains taxes on it when sold based on its cost plus any improvements made.
when it comes to the capital gains taxes "based on its cost" which cost are we talking about? is it the cost of the house as sold?
post:
my brother wants to do a quit claim deed on a condo in florida that our mother is living in. he would like to have her assume the title for the condo. the property value is less than $120k. what is the tax implication of this transfer, if any?
response:
with the transfer of the property through a quitclaim deed, your mother will be financially responsible for the property. she will also have to pay the property taxes.
as the property is quit claimed to your mother by your brother, it may be considered as a gift to your mother. in that case if the value is over $12,000 which is per year per person gift limit, your brother will have to file form 706 or 709 with his taxes. this will consider that the excess amount of the gift as part of his $1 million lifetime gift exemption. your mother will also be responsible for paying capital gains taxes on it when sold based on its cost plus any improvements made.
when it comes to the capital gains taxes "based on its cost" which cost are we talking about? is it the cost of the house as sold?
there are too many self-appointed experts running around. on the other hand, you (anyone) can contact the irs directly and ask for answers to questions such as these. why not go straight to the source?