Denver, CO asked in Real Estate Law for Colorado

Q: Is a property that's been passed via quit claim deed eligible for the $250,000 gain exemption on primary residences?

Basically, I have a condo that is legally titled in my parents name. I have occupied the condo as my primary residence for almost 4 years, and now that we are looking to sell I was hoping to find out the tax consequences. One option we've been discussing is the use of a quit claim deed to pass title from my parents to myself and my wife. The big question is whether the fact that I've occupied the condo as my primary residence for almost 4 years will result in me being eligible for the $250,000 tax exemption on the property's growth. By transferring title, I've technically met the requirements of ownership and primary residence. Will this work?

Edit: In response to John's answer, we meet all of the requirements listed in Publication 523 for our "main home". In addition, I have made all mortgage payments and been the sole decision maker in regards to the property. In summary, the rights and responsibilities of the property are mine. Is this a strong argument for my ownership?

Related Topics:
1 Lawyer Answer
John Roland Lund
John Roland Lund
Answered
  • Carbondale, CO
  • Licensed in Colorado

A: The problem is that you must own the property for two years. The title is going to the primary if not sole determinant of who has owned the home. Unless you have some basis for claiming you hvae been the owner, I don't this this is going to work. See Publication 523 of the IRS for details. .https://www.irs.gov/publications/p523/ar02.html#en_US_2016_publink100025053

Timothy Canty agrees with this answer

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.