Legal Question in Tax Law in California

Re: Does a quit claim invoke a gift tax?

How much did she loan. Each person can give any other person $10,000 per year without invoking gift tax issues. Thus a married couple can give another married couple $40,000.00. If the money for the down payment was a gift, that would be the time the gift tax would be an issue. If it was a loan and now she is gifting you the forgiveness of the loan, now is the gift time. If you are simply taking her off the deed and there is no gift, then there is no gift tax issue.

Joel Selik www.4thelaw.com

Re: Does a quit claim invoke a gift tax?

If her name went on the deed as consideration at the time of the purchase there was no gift at the time of purchase but would be when she delivered the deed. In order to lessen the impact, she could transfer fractional interests to each of you and your wife over a period of years thereby using the annual exclusion amount effectively over a period of several years. Also, each person has a 675,000 exemption level over and above the annual exclusion and that exemption goes to 1,000,000 next year for the next 2 years.