My father-in-law is giving my wife and I the house she llived in, in college for a starter home, and apparently he cannot just change the name on the deed there is going to have to be taxes paid on the house even though he is giving it to us for free, also for someone who knows the purchase price was 55,000 and if it was appraised now it would be worth about 94,500. Can anyone help me out here?
Thanks

 

Check The yellow pages and find an Abstract and Title company in your area, because the Laws may vary by State. It is always a good Idea to update the Title. But to transfer ownership, a quitclaim deed is all that is necessary. The Title search is to make sure no one else has a claim on the property.

 

Thanks for the fast reply in the info, I have been googling the last few days trying to find something in black and white and that shard to do

 

Do you know with this transacrtion will my father-in-law have to pay taxes or will we have to pay taxes to transfer? I know we will owe property tax ever year, but was wondering since no money is changing hands if he or we would owe anything, b/c an attorney said she was going to send him a 10-99 tomorrow and he cannot figure out for what and I also have no idea.

 

Your father would owe the gift tax if applicable. I think he can give you each (you and wife) 12,000 a year for a total of 24,000 tax free. Your mother-in-law could also do the same if she is in the mix. Do a google on gift tax. This stuff gets pretty complicated so I would highly recommend talking to a good accountant. I am in no way qualified to give you financial advise just trying to point you in the right direction.

I had some similar questions earlier this year and let my CPA take care of it. It also has some implications on his estate and possible complications involving estate tax. Your father in law may also owe some capital gains tax if the house is not his principal residence.

 

you have to watch out for things like gift taxes. if you just give something away someone will owe taxes to do it.

what most people do in this situation is let the property go for something like a dollar. simplifies things.

 

find a good real estate lawyer to handle it...it will cost you a few hundred probably but you wont have to worry about anything coming back to bite you in the a$$. i hired a lawyer when i closed on my house best $300 i spent.. all those papers can make your head spin. if more people had done that they might have realized they couldnt afford the house the way the bank said they could and all this foreclosure mess wouldnt have been so bad. just my opinion.

 

Have hiim sign a quit claim deed, have it notarized, and filed at the county courthouse. The quit claim deed means he is quitting his claim to the property completely, and you guys will own it. That is all that has to happen to change ownership. As far as taxes I'm not the one to ask.

 

Instead of gifting it he can sell it to you for a dollar on a quitclaim deed. That should avoid tax issues. Just call a local title service and ask them the best method for your state.