In January I will be legally documented as the new owner of my dad's business. My sister has one property that is under her name which she no longer wants to manage or continue owning. I was wondering if we could use a quitclaim deed to transfer the property from her to me then to the business? If we can transfer the property from her to the business directly using a quitclaim deed that would be even better!
However, if we have to use a quitclaim deed to transfer the property to me where I then have to transfer it to the business will she still be eligible to write-off the quitclaim deed as a gift tax with the remaining cost being written off as a tax deduction toward her estate tax? Makes sense?
Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
6y
I'm probably going to get in an argument again, but what do you want to do:
Quitclaim - All it does is record that your sister has surendered her claim on the property. If she signed a loan on the property it does NOT release her as a mortgagee. It does NOT transfer her claim to you. I guess you could say if she surrenders her claim to the property then you solely own it (if no one else is on deed).
Bargain and sale - If your sister wants to transfer her (and her interest only) to you or a LLC for no money, then you want a B&S deed.
Again, in OR/WA, so other places may do it different. Get a LOCAL RE atty and work with title.
Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
6y
I'm probably going to get in an argument again, but what do you want to do:
Quitclaim - All it does is record that your sister has surendered her claim on the property. If she signed a loan on the property it does NOT release her as a mortgagee. It does NOT transfer her claim to you. I guess you could say if she surrenders her claim to the property then you solely own it (if no one else is on deed).
Bargain and sale - If your sister wants to transfer her (and her interest only) to you or a LLC for no money, then you want a B&S deed.
Again, in OR/WA, so other places may do it different. Get a LOCAL RE atty and work with title.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
6y
@Zaneta Horne First of all I am not an attorney and can not give legal advise. I will give you some general information about my understanding of the law, and how I might handle a similar situation. However you should be seeking the advice of a competent real estate attorney and someone who understands the tax ramifications of doing what you want to do.
First of all, why a quit claim deed? A quit claim deed is a weak deed and may transfer no rights at all. There is nothing wrong with a quit claim deed but it may not be the best choice of deed. New investors jump at the term "Quit Claim Deed" without really understanding what it is or why you would use it. Receiving a quit claim deed vs a stronger deed is to your disadvantage.
Even if you use a quit claim deed it is wise to have a title company handle the transaction and give you title insurance.
Next, the type of deed you use should have no affect on the taxation of the transaction.
Lastly I see no reason for the transfer to you then to your company. That may increase your costs, two transfers instead of one. The exceptions my be your state may have some exception to transfer taxes for non arms length transactions. (within family, from you to your company etc)
If my message or @Steve Morris message is not clear ask for follow up and tag us in the post. (hit @? and our names come up) I see you are new welcome to BP
Wholesaler · Dallas, TX · Member since 2017 · 306 posts · 133 votes
6y
Hello Zaneta! Welcome here! This is a good reason to take of an experienced tax consultant on real estate questions on this deal. You do not want to listening to anybody that has no experience that type of deal estate transactions.
That being said, I would do a title search to confirm her ownership and show that their are no liens on that property and I would get title insurance as protection.
How well you know your sister, will give you various solutions. From total trust to conflicting. I suggest keeping your using a recent relationship.
Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes
6y
Deed
A written instrument, which has been signed and delivered, by which one individual, the grantor, conveys title to real property to another individual, the grantee; a conveyance of land, tenements, or hereditaments, from one individual to another.
Quitclaim Deed
An instrument of conveyance of real property that passes any title, claim, or interest that the grantor has in the premises but does not make any representations as to the validity of such title.
Warranty Deed
An instrument that transfers real property from one person to another and in which the grantor promises that title is good and clear of any claims.
Special Warranty Deed
A written instrument that conveys real property in which the grantor (original owner) only covenants to warrant and defend the title against claims and demands by him or her and all persons claiming by, through, and under him or her.
I believe a Quit Clam Deed, Warranty Deed and Special Warranty Deed are all "deeds", the only difference is the nature and extent of warranty the Grantor gives to the Grantee.