Quit Claim And Capital Gain Tax

I quit claimed a property 2yrs ago. The property was sold I had no rights to the profits, I am still responsible for capital gain taxes

Comments(4)

  • InActive_Account2nd July, 2005

    No you are not responsible.

  • longbranch2nd July, 2005

    Would the person whom the property was signed over to be responsible for capital gains taxes? If so, would that person have to pay on 100% of the profit they realize? Or would the original sales price and improvements be taken into consideration? And could they take the $250K exemption?

  • longbranch3rd July, 2005

    Thanks, Darryle. I am still confused on one point. My friend quit-claimed the house to me. He paid $150,000
    for the house and put $15,000 into improvements. After three years, he signed the house over to me. Since then, I have put $30,000 into improvements. I have now lived in the house for 30 months. If I sell the house for $425,000, what is my cost basis? $395,000($425,000-$30,000) or $230,000($425,000-$150,000-$15,000-30,000)? Basically, will I have to pay capital gains taxes after I take my 121 exemption? Thanks.

  • NewKidinTown24th July, 2005

    Reread my response. I said,

    If you have both owned and occupied the property at least two of the five years prior to sale, then your profit is tax free after you take the Section 121 exclusion.

    Your friend is out of the picture.

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