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Ray
Ray, Lawyer
Category: Real Estate Law
Satisfied Customers: 36960
Experience:  Texas Attorney for 30 years dealing in real estate
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My cousins and I own a piece of real estate in Los Angeles

Customer Question

My cousins and I own a piece of real estate in Los Angeles County. We have a partnership, but recently, we have formed an LLC. The California attorney sent me a Quit Claim Deed for my signature. This Quit Claim Deed has handwritten on the upper left hand
corner the words "This is a bonafide gift and the grantor received nothing in return, R & T 11911." I don't agree with this phrase since it is not a gift, and I did received something in return, namely a 10% interest in the newly formed LLC. What do you think?
Thanks in advance, ***** *****ppman
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Ray replied 1 year ago.

Hi and welcome to JA. I am Ray and will be the expert helping you tonight.

This is good dead here and this is why.California Revenue and Taxation Code (R&TC) allows imposition of a transfer tax on a transfer of a interest in real estate for value. However, when the transfer is a bona fide gift (i.e., no money or other consideration is given), the transfer tax does not apply.

He is indicating this so you are not charged a transfer tax under California law. I understand your concern but I assure you this does not affect the transfer of the property but rather saves the LLC taxes.

Reference..

http://www.avvo.com/legal-answers/what-does-the-statement---this-is-a-bonafide-gift--211580.html

I appreciate the chance to help you tonight.Please let me know if you have more follow up.Thanks again.

Expert:  Ray replied 1 year ago.

Law for reference.

http://lavote.net/documents/documentary-transfer-tax-statutes.pdf

As you can see here this is standard language to reflect it is a standard transfer there is no sale or gain so not taxed with this language.

Expert:  Ray replied 1 year ago.
If you can leave a positive rating it is always much appreciated.Good luck with the LLC.

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