Legal Question in Real Estate Law in Massachusetts
Adding someone to my property deed & gift taxes
To obtain a more favorable mortgage rate, the mortgage & deed were placed in my name. The other person had her credit rating damaged by an ex-spouse. She has paid half the down payment and half of every monthly mortage payment. Also, she has paid half the $100,000 to prepay the mortgage. Everything is half and half and will continue to be so until the mortage is paid off in 2007.
The mortage company (Countrywide) has already told us the other person's name cannot be added to the mortgage. I would like her name to be on the deed. My question is are any gift taxes involved? I feel strongly that there should be NO taxes involved since she is paying for half the property and all connected expenses and has checks to prove it. Your answer means a lot to me. Thanks.
2 Answers from Attorneys
Adding someone to my property deed & gift taxes
If you change the names on the deed without bank approval this could be interpreted
by the bank as a transfer of title. If so, this could be interpreted as a breach of the
mortgage allowing a foreclosure. If you transfer the property there will be no gift taxes
as she already paid value for the property. You could protect her to some extent by a
written contract and a will. However, the only protection she can have against
creditors is to have her name in the registry of deeds. Another option could be a
mortgage to her but his could also have problems with Countrywide.
Re: Adding someone to my property
With all due respect, your "feelings" about tax liability are inconsequential; it is what the IRC says that counts; but other more troubling issues are whether or not conveying from yourself to yourself and your friend will be a violation of the mortgage for which Countrywide may call the loan and in what legal form you should both hold ownership.
voice: (781) 593-7379
fax: (781) 593-7348
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
