Having been in a similar situation, I'll quickly summarize here with the option for the longer detailed version privately. First this is fully dependent upon your State. Indiana repealed any type of REO Sales/Transfer tax as well as the inheritance tax (and/or the equivalent) in that event and also created exceptions for family (since this is a family to family transfer of real property) so this was not applicable after 2013. Prior to, it all depended on how close you were to the person to determine what tax, if any, you'd be paying. Class "A", for example, were the closest: Parent to Child, eg. Class "B" were siblings, so on and so forth. Class A was "exempt" up to $100K while class "B" only $500.
Let's say your in a 2% state. Let's say all requirements are met for exemptions which essentially leaves a "gain" of $65,000 ($15K + $50K), but could be offset and even exempted depending on property tax laws in that State. If one this is for sure, it's no uniformity across state lines.
Also on the deeds: some people; in order to keep details of the transaction private (knowing it will become public record once recorded), the sales price is omitted. Some States allow this, some do not. On the assumption it is, you could easily and legally file a $0.00 (or gifted) deed. Generally this is on a quit-claim only since covenants (promises) come with warranties, and if one doesn't know what he/she is promising as far as their interests are concerned, they won't be on the hook down the line with a quit claim should their interest be different.
As others have suggested, It's recommended they you consult a Property Law/Probate attorney if you're unsure of the ramifications. Also it may be in your best interests just to find that (hopefully) there isn't a tax to worry about either.
Never know until you ask and this is an area you do not want to try on your own unless you have experience & training. One wrong word and you could be giving your rights away or never have ownership to begin with.
You wouldn't believe the title nightmare I went through at one point just to clear title. We had to go back 3 generations (of title) due to improper transfers and failures of transfers. Whatever the case may be, the last thing you want is to find 20 years from now, you don't have clear title to the place, never did, and your current interests are questionable.
Take it easy & here to help if I can
nma
Let's say your in a 2% state. Let's say all requirements are met for exemptions which essentially leaves a "gain" of $65,000 ($15K + $50K), but could be offset and even exempted depending on property tax laws in that State. If one this is for sure, it's no uniformity across state lines.
Also on the deeds: some people; in order to keep details of the transaction private (knowing it will become public record once recorded), the sales price is omitted. Some States allow this, some do not. On the assumption it is, you could easily and legally file a $0.00 (or gifted) deed. Generally this is on a quit-claim only since covenants (promises) come with warranties, and if one doesn't know what he/she is promising as far as their interests are concerned, they won't be on the hook down the line with a quit claim should their interest be different.
As others have suggested, It's recommended they you consult a Property Law/Probate attorney if you're unsure of the ramifications. Also it may be in your best interests just to find that (hopefully) there isn't a tax to worry about either.
Never know until you ask and this is an area you do not want to try on your own unless you have experience & training. One wrong word and you could be giving your rights away or never have ownership to begin with.
You wouldn't believe the title nightmare I went through at one point just to clear title. We had to go back 3 generations (of title) due to improper transfers and failures of transfers. Whatever the case may be, the last thing you want is to find 20 years from now, you don't have clear title to the place, never did, and your current interests are questionable.
Take it easy & here to help if I can
nma
@masscredit wrote:Thanks for the info! I've briefly gone over some of this with my CPA. Mainly asked questions about capital gains and taxes if the house is sold so I'd have an idea how much we'll each be getting if it goes that way. The home is owned by my aunt who lives out of state.
This whole process seems like it can be easy or complicated. Easy for a normal sale and complicated if I want to do it privately.
It does "seem" like it is more complicated than it really is. Before I learned these processes that the title companies normally perform behind the scenes, I would never have thought I would ever understand it!!! Luckily my situation occurred after the experience was gained. I just wish I could lead you in the right direction better but it would be unethical and potentially damaging in many many ways should one variable be incorrect. Knowing she lives out of State and it is not even her primary residence changes a lot right there. Depending on her overall assets, it could even be construed as investment or income-producing property.
While you know that isn't the case, this is just one way the property could be treated until the chain of title is cleared. It is doable - but I wouldn't advise it in an iffy circumstance like this - does ocelot with Real Property. Like I said too I wish I could veer you better but for all I know, another piece of the puzzle could supersede it all. It WILL work out though!!!!
