My father did a quit claim deed to put his home in my name. Now it is time to sell the home. No money was exchanged at the time of the quit ...

Question

My father did a quit claim deed to put his home in my name. Now it is time to sell the home. No money was exchanged at the time of the quit claim. What will the capital gains taxes be on this sale?

Answer

While I am not a CPA (and you will need to consult one of those), the capital gains basis on property which is outright gifted is usually that of the donor. Your taxable gain would therefore be whatever your father spent to buy it and improve it over the years. Unfortunately, the way your father apparently structured this transaction is usually not the best way to do it for this reason, since you could end up owing tens of thousands of dollars in taxes, depending upon the value of the home. On the other hand, inherited property gets a "step up" in basis to the value at the time of death. Accordingly, if it is sold relatively soon, there is generally no taxable event at all. There are numerous estate planning techniques which could have given you the "best of both worlds," for elderly parents gifting property to their. Although it may be too late for you, anyone else in this situation should therefore immediately schedule a consultation with an experienced estate planning attorney. My answer here does not make me your lawyer, so you need to consult one of your own before acting upon this. For further discussions, you may contact my office at 333 Main St, Racine, WI 53403, 262-633-3090, during business hours, or see me on the web at www.jayknixonlaw.com. See over 15 years of my previous answers to consumer questions at http://www./answers/atty_profile/view_attorney_profile/jknixon. Attorney answers may contain advertising materials.