Quit Claim Deed + Divorce + IRS Taxes
My boyfriend signed a quit claim deed to his ex wife for a condo they were purchasing in 2003. and yesterday he got a letter from the IRS saying he owed almost $5,000 in taxes for the property he quit claimed to his ex wife in the divorce..
Does he owe this money? or did the quit claim absolve him of anything to do with the property?
please help. thank you, tanya
You are not giving us much information and it seems as though the best place to resolve this is his divorce attorney or the IRS.
Is the IRS going after capital gains tax on the condo? What did he receive from his ex for the quit claim deed? Did he quit claim it 2003 or did he purchase in 2003? I am not necessarily trying to encourage you to supply this information, since it may require detailed knowledge of the divorce settlement in order to answer.
My first guess is that the IRS is looking for tax on capital gains associated with the quit claim of the condo. Another factor in this is that you did not state whether they used the condo as a residence or a rental.
he received no money for the quit claim deed..he just wanted out... they divorced in 2000 the year the quit claim was done...and she sold the condo in 2003. they were living in the condo themselves not renting it out..and I am having him obtain his copy of the divorce papers and quit claim deed..
Is the IRS claiming it is a capital gain issue? Was there an IRS lien on the property? If so, the lien should have been paid at the time of sale in 2003. At this point if it is not clear exactly what they are claiming, your boyfriend should go to the IRS and ask why they believe that he owes taxes.