Q: Is it better to file a quitclaim deed or to buy my mom’s house?
Her house is almost paid off and it is the only inheritance I have. She wants to make sure I get the house, but I don’t know what’s better - a quitclaim deed or have my mom sell the house to me for a minimal amount.
A:
Neither is a good idea. The first reason is quitclaim deed is just a method of transfer of real property - it alone does not trigger a tax savings technique. Sale of the residence for a minimal amount will trigger a gift subject to gift tax reporting for any value sold for less than the FMV (usually determined by obtaining an actual appraisal - not a broker estimate). Then, and only then will you received her basis in the property - usually what she bought it for. So for example you purchase the house from her for $10 and the FMV of the house is $200,000, you mother will have a gift ax reporting requirement the IRS of $183,890 (200,000-10-16,000 annual exclusion).
To obtain actual tax saving advise and effective methods of "making sure [you] get the house" you should consider seeing an estate planning attorney who has tax knowledge (like who also is CPA).
I wish you well.
Nina Whitehurst 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.
