What are the tax implications of adding someone to a deed?

Get Legal Help Today

 Secured with SHA-256 Encryption

What are the tax implications of adding someone to a deed?

What are the tax implications of changing real estate property ownership from single ownership to joint ownership?

Asked on April 3, 2012 under Real Estate Law, Virginia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

This is a complicated question, and one for an accountant, particularly a CPA, not an attorney; you want to consult with a knowledgable tax professional about this before, since there are undoubtedly better and worse ways to structure the transaction.

As a general rule, WHENEVER a person receives something of value, whether that is money, securities, personal property, payment for him or her of expenses, or real estate, that is a taxable event. (The only major exceptions are receiving return of loan principal you loaned to someone else; reimbursement of expenses from your employer, such as if you had to put business travel on your credit card; a tax refund; and certain specific payments exempt from tax by law, like Roth IRA distributions or life insurance.)

Therefore, there will be tax consequences based on the value of (which takes into account equity in) the property and the share thereof given to the other person. However, whether the person is gifted his/her interest, or pays for it (and if so, does he/she pay fair market value or some nominal or discounted price) will affect who pays how much taxes.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption