selling a vacation home

[kdsmo]

What is the name of your state? California

I own my primary residence and some vacation property. I want to put a house on the vacation property and sell it in order to get enough money to loan to my daughter so she can purchase her home. I hear there is a higher tax rate when you sell property that isn't your primary residence. Is there a way to avoid the higher tax rate. Should I quick claim the vacation property into my daughter's name? Anybody have experience with this?

[efflandt]

If you quit claim the vacation property to your daughter, you would likely need to file a gift tax form for its fair market value (not that you would owe tax if under the unified lifetime credit). But her cost basis would be zero, so she would be liable for tax on the full sale price (minus sales expenses) when she sold it.

So unless she is going to build and live on it, figure out which comes out ahead, you selling it for long term capital gain or her selling it for short term capital gain.

You can search irs.gov for info on gift tax or capital gains.