Aberdeen, MD asked in Estate Planning, Real Estate Law and Tax Law for Maryland

Q: what is the proper written code for a quit claim deed from father to daughter for tax exemptions

I live in MD. My father is transferring the house to me. I need to site the code to exempt me from the state and fed taxes

1 Lawyer Answer

A: The recording office of the county where you file will know and allow you to fill in the cited section that applies. They are the authority who has to approve whether you have a tax exempt transfer. However, the list of exempt transactions generally appears in the Maryland Tax-Property Article, Section 13-207, and the provision having to do with exempt transfers between a parent and a child is found in Section 12-108(c)--but the latter exemption only applies to the portion of any principal mortgage debt balance assumed by the child as part of the transfer, and not to any equity in the property. There may be a better way to structure the transfer to both avoid the transfer and recordation taxes, as well as avoid the daughter from being transferred the same low tax basis in the property as her father (which will cause the daughter to have to pay capital gains tax upon any resale above the original purchase price when the father acquired it). One such strategy would be for the father to transfer the property to a revocable living trust, naming the daughter as the sole beneficiary upon his death, which would then transfer the property without any taxes and at a stepped up tax basis equal to the fair market value at the time of the father's death (meaning, no capital gains taxes will ever be imposed upon any future sale on that valuation amount). Another simpler way is to simply leave the house to the daughter in the father's will. There are other ways to work this. The father should consult a lawyer about his estate planning goals and what he wishes to achieve, so that he accomplishes everything in the best manner for both his family and for tax avoidance purposes.

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.