I lived with Dad the last 15 months helping him with his chronic and age related health problems. He passed at the end of January. Are there any tax ramifications of quit-claiming it? Is there some other process I need to go through instead?
didntknow, so sorry to read that your Dad had recently passed.
What I would do is go to the Attorney who drew up the Trust, and let him/her explain what are the next steps. That is what I am doing with my Dad's Trust, and I am paying the Attorney out of the Estate.
You asked if there are any tax ramifications of using a quit-claim deed.... if your Dad had already signed the house over to you. Yes, capital gain taxes when it comes time to sell the house, the bases used for doing capital gains will be what your Dad paid for the house when he bought it.
If one instead inherits the house, then the bases used for capital gains is the house value of the day you had inherited the house.
For myself, I was glad my Dad sold his house while he was still around. Otherwise, I would have been in a deep tax mess if he had quit claimed the house to me.
Dad bought his house at $135k but sold it for over $400k.... thus a profit of over $265k. There was no mortgage. Since Dad was alive when he sold, and he sold within a year of my Mom passing, he was able to take a Federal IRS capital gains on houses deduction of $500k [allowed for a couple].... whew, no taxes. Now if he had waited, his deduction would have gone down to $250k [allowed for a single person], thus he would have needed to pay capital gains tax on the remaining $15k. I know, this sounds like a can of worms :P
What I would do is go to the Attorney who drew up the Trust, and let him/her explain what are the next steps. That is what I am doing with my Dad's Trust, and I am paying the Attorney out of the Estate.
You asked if there are any tax ramifications of using a quit-claim deed.... if your Dad had already signed the house over to you. Yes, capital gain taxes when it comes time to sell the house, the bases used for doing capital gains will be what your Dad paid for the house when he bought it.
If one instead inherits the house, then the bases used for capital gains is the house value of the day you had inherited the house.
For myself, I was glad my Dad sold his house while he was still around. Otherwise, I would have been in a deep tax mess if he had quit claimed the house to me.
Dad bought his house at $135k but sold it for over $400k.... thus a profit of over $265k. There was no mortgage. Since Dad was alive when he sold, and he sold within a year of my Mom passing, he was able to take a Federal IRS capital gains on houses deduction of $500k [allowed for a couple].... whew, no taxes. Now if he had waited, his deduction would have gone down to $250k [allowed for a single person], thus he would have needed to pay capital gains tax on the remaining $15k. I know, this sounds like a can of worms :P