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Any Taxes Due from Quit Claim??

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n33danswrs

Junior Member
What is the name of your state?State of California

Are there any tax reprocussions as a result of being placed on a quit claim for a property? My wife's father, who along with his wife are owners of a property, now want to put their 3 kids (adults actually) (my wife being one of them) names on the property via quit claim. Will there be a tax liability now on the kids?
Will the property be re-assessed in value, the final value being divided by 4 and the taxes being owed by each offspring on their 25% of the value?
How is this tax calculated?
I know a living trust would be the way to go but it's too long of a story. We're stuck with this situation or none at all.
 
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divgradcurl

Senior Member
Will there be a tax liability now on the kids?
No. If the amount being quit-claimed to eahc person exceeds $10,000, then there will be gift taxes associated with each "gift" -- but since gift taxes are "paid up" when the giver dies, there is no tax liability right now.

The quit-claim recipients will take their shares of the house using the Dad's original basis, so there may be some significant tax implications when and if the house (or the various shares in the house) are sold.

Will the property be re-assessed in value,
Yes. Any transfer of ownership, except for a trasnfer between husband and wife, will trigger a reappraisal for tax purposes.

the final value being divided by 4 and the taxes being owed by each offspring on their 25% of the value?
No, you will get one tax bill for the property -- how you want to divide it up and pay for it is up to the owners.

How is this tax calculated?
The tax will be based on the new appraisal. The county assessor's office will send you the updated value, and you'll have a chance to appeal the ruling if you think it is wrong.
 

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