Legal Question in Real Estate Law in California
RE: cancel grant (gift) deed between mom/daugher or do new grant deed to transfer it back in same calendar year: My mother did a grant deed to me on her home in California a few months ago this calendar year for zero money transfer so I could deal with sale after loss of my father (gift between mom and daughter). It has caused other family issues so I would like to cancel the grant deed and put it back in her name this same year and have her sell it with my help instead. Is this possible? Or should I just grant deed it back to her for zero money transfer (gift transfer between daughter and mother)? I am not sure what to do so it doesn't hurt either one of us income tax wise etc. I would like it done this calendar year before we do income taxes so we know what to do correctly and best. Advice please!
1 Answer from Attorneys
When a grant deed is delivered and accepted by the grantee/done, its work is done and title transfers. The deed cannot be canceled because it has already accomplished its mission and there's nothing left to cancel. Therefore, to reverse the transaction, a new deed must be prepared, delivered and accepted. You did not say whether the (first) deed has been recorded. Recording doesn't affect the transfer that occurred upon delivery and acceptance, but should be taken into consideration when reversing the transaction. Note that there may be property-tax and possibly even capital-gains or gift tax issues here, even with completion of the reversing transaction, so I'd recommend having the direct advice of a lawyer with real estate and tax experience to make sure (a) that the reversal is doe effectively, and (b) that you know whether there'll be any tax consequences.
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