quit claim deed and capital gains

What is the name of your state (only U.S. law)? Maine.

If several siblings own a piece of property and one buys another's piece, when the seller signs a quit claim deed on his part of the property, does that trigger capital gain issues in the state or with the Federal government. In other words, does the quit claim deed action prompt information to be sent to the state of IRS? If this action does not trigger anything with the state or IRS, what does?What is the name of your state (only U.S. law)?

louise christen said:

What is the name of your state (only U.S. law)? Maine.

If several siblings own a piece of property and one buys another's piece, when the seller signs a quit claim deed on his part of the property, does that trigger capital gain issues in the state or with the Federal government. In other words, does the quit claim deed action prompt information to be sent to the state of IRS? If this action does not trigger anything with the state or IRS, what does?What is the name of your state (only U.S. law)?

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**A: is this a private sale or through escrow or closing attorney?

We aren't going to teach you how to cheat on your taxes.
If a capital gain is due, then it should be paid.

If this is some sort of inheritance, it's quite possible there is no gain. The basis of inherited property steps up to the value on the death of the owner.

Capital gains occur when the primary residence is sold, and is based on the initial purchase price. In this instance the quitclaim should be recorded. Capital gains can be deferred for several months (18?)-allowing the seller time to purchase a property of equal or greater value. The property taxes in this case will not be re-assessed. Current capital gains are 15% Federal, and 4-9% (depending on State). In 2011 these rates will "sunset" / revert back to rates before 2003.

Maybe you want to rephrase a bit, a lot, DAD10?

In short since this is a inter-family transfer, and the primary residence is not being sold-there are no capital gains.

DAD10 said:

Capital gains occur when the primary residence is sold, and is based on the initial purchase price. In this instance the quitclaim should be recorded. Capital gains can be deferred for several months (18?)-allowing the seller time to purchase a property of equal or greater value. The property taxes in this case will not be re-assessed. Current capital gains are 15% Federal, and 4-9% (depending on State). In 2011 these rates will "sunset" / revert back to rates before 2003.

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If you are talking a 1031 exchange, you have 45 days to identify the replacement property and 180 days to close the sale. There are a number of other issues: there can be no money taken out either, the money has to be put outside your constructive use, etc....

State capital gains rate could be as low as ZERO in some states.

Well, and the fact we need to talk about like-kind property and would have to determine what the property is. Is it a residence or is it income property. Also, federal capital gains can be 0% depending on income as well. I'm uncertain about Maine property tax reassessment depending on the property use. (If residence, maybe, but no exchange possible. I didn't look it up. If, income property, I don't think so.)

There is no capital gain exemption (federally) for an "inter-family transfer, and the primary residence is not being sold".