capital gains/quit claim deed

State of Michigan

My mother and I co-purchased a co-op in 1985. Mom put up all of the money and has lived there the entire time. I moved out of the home 6 months after the purchase and haven't lived there since. Mom now wants to sell the co-op.

Is it possible for me to sign over my interest in the property by filing a quit claim deed (I won't be receiving any of the proceeds from the sale)? If I can file a quit claim deed, will this prevent capital gains from being attributed to me? Would a quit claim deed cause me to be subject to gift taxes if my "share" of the proceeds would have been in excess of $10,000?

If you file a quitclaim deed before the sale of the property and have your mother sign all the sale papers as the sole owner, you will not have any gain attributed to you. The quitclaim deed would be a gift in the amount of the value of your share of the property at the time of gift. The sale price of the property soon after the gift would be good evidence of the value at the time of gift.

If you are single and if the value of the gift exceeds $10,000, you would have to file a gift tax return. But there would be no tax because every person is allowed a lifetime exemption of over $1,000,000. You would show the gift and take the $10,000 annual exclusion, then take part of the lifetime exemption for the rest of the value.

loku,

Thank you for the information.