Does my son have to pay taxes on a house that we quit deeded him?

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Does my son have to pay taxes on a house that we quit deeded him?

We filled out the quit deed form and had it certified. What else does he need? What is a transfer tax exemption the clerk said we needed this before my son could file the quit deed on the house we gifted him.

Asked on October 18, 2011 under Real Estate Law, Michigan

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You need to check with your state to see if a quit deed or quit claim is allowed to give your son the home and the transfer tax exemption. Otherwise, this would be considered a taxable gift and he would have to pay transfer taxes on the home. Talk to the city clerk and ask him or her to pull up and print for you not only the form but also the statutes that apply if the form was not used and filed prior to filing the quit claim. Transfer taxes otherwise could be extremely high and this is one way to ensure your son gets the benefit of the home without paying tax. However, please make sure this is all cleared regarding any mortgages you may have on the property. If you have a mortgage, and you quit claim the property, the mortgage payments due would be accelerated to be due in full.


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