Quitclaim Deed Advantages

QuitClaim Deed Advantage

By now, you must be familiar with quitclaim deeds, or deeds that are without guarantees. They are only utilized in certain instances for instance, removing the title’s cloud during the tax deed sales or a transfer has occurred between the family members, significantly during a divorce. Now, quitclaim deeds actually have tax advantages, mostly occurs when properties are given of as gifts.

Quitclaim deeds do not warranty ownership and the interests and rights of the grantor in the property are not stated definitively. These deeds are different from the common warranty deeds which have many guarantees including protection against title defects.

When you quitclaim a deed to someone, you will no longer be accountable to pay for the property’s annual taxes. The receiver will then have to be the one to pay off the property’s taxes.

If you quitclaim a deed to someone without receiving any money for the deed, you will be known as the donor or the grantor and the transfer will then considered as a gift. If your gift (how much the property is worth) is less than the federal per person per year limit, you will be exempted and you don’t have to worry on paying for the gift’s tax.

However, if your gift is more than the limit, you may still be exempted to pay for the gift’s tax through federal lifetime exception which is up to $1million. So if the property is worth than $13,000 and you have not given gifts more than $1million and the property value is also less than 1 million, then you will not have to pay for the gift’s federal tax. But once you have given 1 gift or many gifts that already totaled $1million, you will then have to pay for the gift.

Also, you have to consider that the quitclaim deed transfers your rights or interests and it does not always mean that you will be free from any liens that are associated with the property.

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