Asked in Real Estate Law for North Carolina

Q: Co-ownership: Considerations when selling your stake in a property

My wife and I co-own a vacation property with another family (50% each). We are interested in selling our part to the family currently owning the other 50%.

1. Is a Quit Claim Deed the best way to exchange funds and separate from this agreement?

2. Would a QCD change the tax rate (NC) or is this still considered normal capital gains tax on any profits? I've read about the funds exchanged in a QCD being treated as a charitable donation and not sure what that means for the tax rate if applicable here(?)

3. Do the taxes need to be filed in the year of the sale or can they be taken care of during the normal tax season?

Thank you!

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1 Lawyer Answer
Ben Corcoran
Ben Corcoran
  • Yadkinville, NC
  • Licensed in North Carolina

A: 1. Normally I use a QCD when transferring partial interests between owners.

2. The QCD does not make the proceeds from a sale automatically a charitable donation. Excise tax and other taxes would still be applicable to any purchase/sale.

3. This is a question for your tax preparer, they can provide advice on this.

1 user found this answer helpful

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