Real Estate Title Change by Quitclaim Deed

[jmc]

Person A owns the title of a real estate. He added his son as a joint owner by filing Quitclaim Deed. The son later transferred his title to other relative by filing Quitclaim Dee. No one receive money out of these transactions.

Should these transactions be treated as a Sale with capital gain OR a Gift? If possible, could I receive answers also with pertinent source of document? Thank you very much. I appreciate your time and effort regarding this matter.

[Lion]

Ownership

What you're asking is first a legal question, what type of joint ownership and percentage. Then, even if the answer to your original question is, "gift," the most tax will be paid at the state level; so you'll need to check your state regs. In CT, the Department of Revenue Services monitors changes in real estate ownership and writes to owners who give some or all of a property away and request a CT gift tax return.

[Bees Knees]

Quit Claim Deed

QF, page 15-7 lists transfers of real estate as completed gifts under joint tenancy. So a gift tax return should be filed whenever you put someone’s name on the title, or take it off, even if no money changed hands. These are not “sales” since the person who originally owns the property is still listed on the deed as an owner. A sale would only take place when money is exchanged for putting someone on or taking someone off the deed.

[jimsee]

Good stuff.

As was explained to me a number of years ago during a phone session with the IRS: The IRS has come to recognize that people add their inheritor's name to the deed of their homes or similar real property to simplify the process of inheritance and avoid probate and lawyers' fees. The addition of names to a property title are not considered to be a sale or gift so long as the new Titilee(?) does not exercise altered control or use of the property.
In otherwords: add the kids' names to the title and when you die they have immediate possession and still qualify to calculate their basis under the Step Rule from the date of your death. Good stuff.
Of course, they could have changed their view. In the last 25+ years the only time I was ever completely wrong about taxes was when I assumed I completely right, and therefore didn't need to check for changes.

[Jesse]

my thoughts only...

You need to look close at the legal issues at hand here as well as the tax implications.

I would think a gift was completed, from Person A to his son when his name was added onto the deed, especially if the son now has the right to and did transfer his interest to another party. The 2nd transfer would be a gift from the son to the relative.

But I've been wrong before!

[Gretel]

Agree

...with Jesse. As long as donor lives you have to follow gift tax rules. When donor dies estate rules apply and property gifted reverts back to estate.

[Unregistered call me Tony]

can a title of a home be as:

J.W. Martin OR Stephanie Akin AND Anthony W. Martin OR Michelle Beal

THANKS A LOT