Into a primary home long enough to benefit from the lighter tax burden. Some investor-owners opt to convert rental property When investor-owners convey their properties, they are taxed The excluded amount is taken off the taxpayer’s total allowable lifetime exclusion. If the transferor of a quitclaim deed in a home sale lived in the home as a primary residence at least two years of the past five, capital gains of up to $250,000 ($500,000 if the quitclaim is conveyed by a couple filing jointly) are excludable from tax. In these cases, the IRS considers the transfer a taxable sale. There are instances in which money changes hands in a conveyance by quitclaim. Quitclaim deeds rarely appear in regular home sales, but On death deed, if it’s an option for real estate in your state, may fit To quitclaims for passing property to heirs. Pro tip: Wills and trusts are not the only alternative Important to consult with your tax expert or real estate attorney for guidance LLC or a living trust but as other tax considerations apply, it’s There is also no tax when an owner quitclaims the property If the giver keeps a “ reversionary interest” in the home, like a life estate, gift taxes will not apply and that interest will remain part of the owner’s taxable estate.
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